If New York has its way, the popular accommodations-sharing company Airbnb will be toast.
Last week, New York Governor Andrew Cuomo signed a law that would outlaw the bulk of Airbnb bookings, levying fines between $1,000 and $7,500 on anyone who advertised for rent most apartments for fewer than 30 days.
New York is Airbnb’s largest market, so the resulting loss of business would be a body blow to the company. And if other states followed New York’s lead, Airbnb’s very survival would be imperiled. If ever a company faced an existential crisis, Airbnb is facing one now.
According to State Senator Gustavo Rivera, a supporter of the anti-home sharing legislation, the law is “about maintaining the already dwindling stock of affordable housing units for the hard-working New Yorkers who deserve them.”
Predictably, Airbnb sees it very differently. The move to stifle home-sharing is characterized as a cynical competition-killer funded by the established hotel industry, that would rob hard-working New Yorkers of the opportunity to squeeze some much-needed revenue from their homes. And it’s in violation of the Federal Communications Decency Act and both the First and Fourteenth Amendments of the Constitution.
Consistent with the severity of the threat posed by the bill, Airbnb’s response was outsized. The company filed suit against the state attorney general, the city of New York, and New York’s mayor, seeking to overturn the law.
Business as Usual
In a move that surprised many, on October 24 the state put enforcement of the new law on hold, pending the outcome of Airbnb’s complaint. And that’s where matters stand today.
One of the key concerns of the state and the city is the loss of tax revenues that would be collected from travelers staying at traditional hotels but aren’t collected for Airbnb stays. Airbnb has begun collecting and remitting taxes in New Orleans and Los Angeles, and has offered to do the same in New York. That could be the basis for a compromise, if the parties are so inclined.
The litigation is likely to take months to be resolved, during which time it’s business as usual for Airbnb hosts and their customers. After that, the home-sharing picture in New York could look very different.
Reader Reality Check
What’s your best guess: Does Airbnb have a future in New York?
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After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.