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Airbnb Criticizes NYC Bill To Tighten Short-Term Rental Rules

By Paul Williams · June 4, 2021, 6:40 PM EDT

A New York City bill proposing stricter short-term rental regulations drew pushback from Airbnb, which argued the measure could hamper the city's recovery from the pandemic and said officials should instead focus on requiring booking platforms to collect taxes.

A bill Council member Ben Kallos introduced in May that attempts to crack down on illegal rentals "threatens New York's recovery" by limiting tourism when the city is trying to encourage visitors, Airbnb said in an online post Thursday. The bill would require hosts and booking services to register with the city.

Rentals lasting fewer than 30 days are generally illegal in New York City unless the host remains on the premises during the rental period, although Kallos said in a May 12 statement that enforcing that requirement is "practically impossible" under existing reporting requirements.

The bill, 2309-2021, has been referred to the Committee on Housing and Buildings, where it is awaiting further action. If enacted, the measure would impose financial penalties on hosts and booking services that fail to comply with the bill's provisions.

But Airbnb, which has clashed with city over prior attempts to tighten regulations on the short-term rental industry, said officials should embrace rentals as a revenue source rather than pushing a law that could potentially deter tourism.

"We believe there is an alternative path forward that recognizes the ability of home sharing to help New York City reach its intended goal of reviving the tourism industry, supporting small businesses and allowing the boroughs to benefit equitably," Airbnb said.

The company said that it would support a nightly booking fee to fund affordable housing initiatives and that city and state officials should require booking platforms to be liable for the city's hotel room occupancy tax and sales tax, which hosts are required to collect and remit on their own. Based on 2019 bookings, Airbnb said that could generate about $75 million in revenue for the city if those taxes were automatically applied.

Airbnb would also be amenable to a 12-month moratorium on short-term rentals in units where tenants were evicted and a prohibition against short-term rentals in affordable housing, the post said. A company representative declined to comment beyond the post Friday.

In a statement to Law360 on Friday, Kallos said that Airbnb's suggestions "are worth looking into" but that a registration requirement "is the right way" to proceed with further regulating the industry.

"We are glad Airbnb sees a need for regulation," Kallos said. "I am all for legal, safe and responsible home-sharing."

Kallos said in May that his bill aims to assist the city's recovery from the coronavirus pandemic by freeing up affordable housing to New York residents rather than having hosts profit off illegal rentals. Kallos said then that more than half of the 37,000 short-term rental listings in the city in February were illegal, which he suggested was hurting the hotel industry that was already reeling from the pandemic.

New York City has floated tax relief for hotel guests as a way to boost tourism and assist the hotel industry as positive cases of COVID-19 drop and vaccinations increase. On May 19, Mayor Bill de Blasio signed an executive order suspending the city's 5.875% hotel room occupancy tax from June 1 to Aug. 31.

Airbnb has a mixed history with New York's attempts to impose stricter oversight on the short-term rental industry. The company has publicly supported some legislation that would apply more regulations on short-term rentals and require booking platforms to collect and remit taxes, and it currently has agreements with dozens of New York counties to collect and remit local taxes. But Airbnb also lodged a legal challenge against an old city ordinance that required disclosure of the short-term rental company's customer data.

The city and Airbnb reached a settlement over that law in 2020 that took effect after city officials passed a change that would require short-term rental platforms to report booking and property information on a frequent basis, but wouldn't require them to disclose customer data.

The Hotel Association of New York City, which claimed in the past that Airbnb's presence in the city negatively affects the lodging industry and the city's economy, supports Kallos' bill. Vijay Dandapani, the association's president, told Law360 on Monday that the legislation "would considerably minimize the ability of rogue operators" to violate the city law.

"For far too long, short-term rental platforms like Airbnb have been using regulatory arbitrage to gain an unfair and often illegal advantage in the NYC accommodations market," Dandapani said in a statement.

A representative of de Blasio did not immediately respond to a request for comment Friday.

--Additional reporting by Daniel Tay, Dylan Moroses and James Nani. Editing by Roy LeBlanc.

Update: This story has been updated with a comment from Dandapani.

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