Boston has agreed to put parts of its new short-term rental rules on hold in response to an Airbnb lawsuit. Airbnb is suing the city over the enforcement provisions, and is asking for an injunction against all of the rules pending the outcome of the court battle. The rules are supposed to take effect on January 1st. (1)
Airbnb vs. Boston
The city approved the rules last June with an 11-to-2 city council vote. The rules will completely ban short-term rentals by investors and tenants. They will allow homeowners and owner-occupants of two and three-family homes to continue short-term rentals, but those hosts will also have to register with the city and pay a $200 a year fee. That registry will also be made public so that other residents will know who is renting space on a short-term basis in their neighborhoods.
The city plans to enforce the rules with steep fines against Airbnb. If illegal listings are not removed, the city plans to impose a $300 a night fine for each violation. The city also wants Airbnb to share user data to help with the enforcement effort.
Airbnb doesn’t like any of it, of course, but will argue in court that it’s not the job of Airbnb to police its hosts or the content they post. It filed the lawsuit claiming it is protected by the Communications Decency Act, which states websites cannot be held responsible for third-party content, such as listings by Airbnb hosts.
Boston agreed to put the enforcement provisions of the rules on hold, as the court decides on an injunction. But, city officials say, they are dealing with a severe housing crisis and are determined to get these new rules in place by the beginning of the year.
City Councilor Michelle Wu, who helped draft the rules, told the Boston Globe, “These regulations close corporate loopholes exacerbating our housing crisis and are urgent. We will figure out enforcement one way or another.”
Airbnb spokeswoman, Crystal Davis, says Boston has gone too far. She told Multi-Housing News, “The City of Boston has enacted an ordinance limiting short-term residential rentals by hosts. But it goes much further than that. The ordinance also enlists home-sharing platforms like Airbnb into enforcing those limits under threat of draconian penalties, including $300-per-violation-per-day fines and complete banishment from doing business in Boston.” (2)
This is not Airbnb’s first lawsuit against a city. It has also sued Miami, New York, and several cities in California including San Francisco, Santa Monica, and Anaheim.
Airbnb vs. San Francisco
The lawsuit against San Francisco was settled in May of last year. Under that agreement, Airbnb and other short-term rental sites, like Homeaway, agreed to provide the city with user data to police illegal listings. The companies also agreed to remove illegal listings if notified by the city.
Short-term rental violations in San Francisco made big headlines just recently. As reported by the San Francisco Chronicle, (3) the city fined a couple of property owners $2.25 million for the illegal renting of 14 apartments.
City attorney Dennis Herrera says, they would have faced even steeper fines, but were operating their illegal rentals before the new rules on penalties went into effect. Airbnb made a public statement in support of the city’s action, in this situation. It said, “These are not the type of hosts we want on our platform and are glad the city has the tools it needs to enforce the rules.”
San Francisco implemented strict new rules about a year ago. Under those rules, hosts must live in the rentals and can only rent space for 90 nights a year. According to the Chronicle, these new rules have reduced the number of vacation rentals in San Francisco by about “half” of what they were previously.
Airbnb vs. New York City
Airbnb’s case against New York City is still pending. It sued the city for rules that allow the city to collect data about hosts from Airbnb. Airbnb stands to lose a lot of business in New York, as it has in San Francisco, because of the new rules.
They haven’t gone into effect yet, but, when they do, they will require the sharing of host names and addresses with city enforcement officials. Airbnb said in the lawsuit, “The ordinance is an unlawful end-run around established restraints on governmental action and violates core constitutional rights.”
The mayor’s office just released further details on data-sharing rules which are sure to cause another dust up. Under those rules, Airbnb must provide a “monthly report” on hosts that include their names, addresses, rental locations and a description of the space rented along with the length of the rental and how much money hosts received.
Battle Is Far from Over
A Crain’s New York Business article reports that academics usually agree that short-term rentals reduce the number of available long-term rentals. But there is no agreement on how much that actually affects the overall housing situation, and whether the benefits of short-term rental rules outweigh the rights of hosts. Some Airbnb supporters claim that the hotel industry is also influencing decisions about short-term rentals, to help cut down on competition.
Meanwhile the battle continues in many other cities. Short-term rental rules went into effect in Chicago more than a year ago, but those rules are being largely ignored. A headline in The Real Deal says they are “designed to fail.” They require that hosts obtain a license to operate, but according to Crain’s “unlicensed versions abound.”
Investors thinking about getting into the short-term rental business should take all this into consideration. That includes a close look at all current and proposed rules for specific properties. The battle over short-term rentals is far from over.
(1) Short-Term Rental Rules on Hold in Boston: Boston Globe