The company says only nine of its nearly 40,000 units in New York have been approved under the new law — which Airbnb claims is meant to drive out short-term rentals.

Readers who prioritize second homes and investment properties turn to Inman’s weekly Property Portfolio email newsletter, whether they’re agents who work with this special class of clients or investors themselves. This month, we’ll go deeper on everything from the latest at Airbnb and Vrbo to the changes investors are making to their portfolios in a shifting real estate market.

A long-simmering feud boiled over this week when Airbnb sued New York City, saying a new law in the metropolis is “oppressive” and functions as a “de facto ban” on short-term rentals.

The lawsuit, filed Thursday in New York State Supreme Court, takes issue with a regulation known as Local Law 18. The city adopted the rule early last year, with enforcement beginning this year. The law requires would-be short-term rental hosts to register with the New York mayor’s office. It also forces hosts to certify that they’re obeying a variety of zoning and maintenance codes, and imposes other restrictions such as not allowing rentals while hosts themselves are on vacation, according to the complaint in the case.

In the complaint, Airbnb describes the amount of personal information hosts have to disclose as outrageous. The company also argues that it’s “a near impossibility for lay New Yorkers to certify” that they’re following the city’s “maze of complex regulations.”

“The registration scheme chills short-term rentals by requiring extensive and intrusive disclosures of personal information and forcing open-ended agreement to labyrinthine regulations scattered across a complex web of laws, codes, and regulations,” the complaint adds.

Airbnb also claims that as of the beginning of May the city had only approved nine of its short-term rental units under the new law. And those nine units represent a tiny fraction — 0.05 percent to be exact — of the $85 million in revenue Airbnb makes in New York.

Meanwhile, and despite the new rules, the complaint also reveals that as of the beginning of January there were about 38,500 non-hotel listings in New York on Airbnb’s platform.

The complaint ultimately accuses the mayor’s office of trying to enforce “its most extreme and oppressive regulatory scheme yet, which operates as a de facto ban against short-term rentals in New York City.”

“These features of the registration scheme appear intended to drive the short-term rental trade out of New York City once and for all,” the complaint adds.

In addition to Airbnb’s lawsuit, a trio of short-term rental hosts also filed a suit against New York City Thursday. The hosts argue in their complaint that renting out parts of their homes provides them with needed income, and gives guests more diverse lodging options than they could find in hotels.

The hosts’ suit calls New York’s latest rules a “blatant effort to ban” short-term rentals.

The lawsuits are just the latest chapter in a long running conflict between Airbnb and New York City. All the way back in 2016, for example, Airbnb sued over a state law that banned the advertisement of short-term rentals. According to the new complaint, that suit was resolved when the city agreed not to enforce the law — an agreement Airbnb says in the complaint New York has now broken.

The New York City Council also moved to more closely regulate short-term rentals in 2018. And in 2020, the city and the company reached an agreement, also mentioned in this week’s complaint, over how often Airbnb would have to submit reports on transactions.

At various points in this conflict, officials have argued that short-term rentals gobble up housing stock, which in New York is infamously expensive and often in short supply. The idea is that by restricting short-term rentals, more housing units remain available for local residents.

In a statement on the suits sent to Inman Friday, Jonah Allon — press secretary for the New York City mayor’s office —  made essentially that same argument: “This administration is committed to protecting safety and community livability for residents, preserving permanent housing stock, and ensuring our hospitality sector can continue to recover and thrive.”

Asked for comment on the cases, Airbnb provided Inman with a letter it sent to hosts this week. The letter states that the lawsuits came “only after exhausting all available paths for a sensible solution with the city.” The letter also states that New York’s rules make it “nearly impossible for hosts to register with and be approved by the city.”

Airbnb’s complaint further argues that short-term rentals benefit guests by providing more options, and that they make housing “more, rather than less, affordable” because they let hosts generate needed supplemental income.

The feud between New York and Airbnb has generated numerous headlines over the years, but it’s also part of a broader trend of cities across the country pushing back against and regulating short-term rentals.

Ultimately, Airbnb’s goal in the new lawsuit is to have a judge rule that Local Law 18 is “invalid and unenforceable.” The company also wants a judge to stop the city from enforcing the law until the case is resolved.

The hosts’ lawsuit makes a similar request, adding that if the new law stands it could “destroy” the hosts’ ability to rent out parts of their homes and force them to move or come out of retirement.

Email Jim Dalrymple II

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