Airbnb fights tough new city laws in court

LETTER FROM BOSTON:

As a long-time thorn in Airbnb’s side, I’m trying not to take this personally. But no sooner do I arrive in Boston, Mass. than Airbnb files a lawsuit in an effort to overturn the city’s impending and far-reaching short-term rental law.

According to the Boston Globe, and other sources, the holiday letting monolith is asking a judge to block the city’s stringent and restrictive rules from taking effect on January 1.

Airbnb claims that Boston’s regulations, passed by a massive majority in the city council earlier this year, violate state and federal laws. The new laws will require online holiday rental agencies to police their listings and share user information with the city.

Airbnb investors and apartment tenants would be prohibited from renting their homes by the night, and property owners would not be allowed to list more than one unit on the website. Airbnb has about 6,300 listings in Boston, according to the Globe.

As in Sydney and Melbourne, various studies have shown that, contrary to Airbnb’s misleading messages about who its “hosts” are, a massive part of its business comes from investors and multi-property operators.  These include sub-letting tenants who can make substantial profits over the cost of a residential let.

Also similar to the Australian experience, the Boston city administration and neighbourhood groups say the short-term rental industry is worsening Boston’s existing housing shortage as landlords take apartments out of the general rental market.

Airbnb is challenging the law on the grounds that it violates the federal Communications Decency Act, which protects online platforms from being sued over third-party content, as well as infringing on the company’s First Amendment right to free speech.

It has been wrily noted that it’s entirely appropriate that the company would try to protect its “obscene” profits by using the same laws that shield pornographers and extremist websites.

“This is a case about a city trying to conscript home-sharing platforms into enforcing regulations on the city’s behalf,” claims Howard Cooper, a prominent Boston defense attorney who is representing Airbnb, in a document seen by the Globe.

“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.”

The problems the short-term holiday letting (STHL) industry has with a register is that it allows light into the darker corners of their business. Hosts who are breaching residential-only council ordinances, apartment block by-laws (rules) and evading taxes, have nowhere to hide and could face punitive per-night-per-breach fines if they don’t register.

Airbnb has previously sued several cities that have tried to impose new rules on short-term rentals. Last year, the company settled a lawsuit it had filed against San Francisco, agreeing to collect host data and turn it over to the city for enforcement. The company’s listings there subsequently fell by roughly half.

In August, Airbnb sued New York City over a new law that is similar to Boston’s. That case, along with Airbnb’s request for an injunction, is pending, but experts say it will have an equally devastating effect on listings if the city wins.

State-wide legislation restricting short-term rentals in Massachusetts is in limbo after maverick Governor Charlie Baker insisted on key changes. But if it is passed it would strengthen individual cities’ position against disruptive law suits.

The Boston rules would still allow hosts to rent rooms in their homes while they were in residence – a pattern of use Airbnb quite cynically insists is their core business, Their PR flaks routinely claim that the many surveys which show this is far from the case are based on unreliable data, while resolutely refusing to open their books to scrutiny on the grounds of client privacy.

The Boston regulations will establish a city registry for short-term rental hosts, who will have to pay a $200 fee to cover administration costs. The registry will be publicly available, ostensibly making it easier for residents to know who is renting out space in their neighbourhoods to holidaymakers.

Boston City Councilor Michelle Wu, a leading campaigner of restricting short-term letting, says the city has lots of rules about what sort of businesses can be conducted in homes. For instance, you can’t run a dog grooming business from your home.

“And much of that is in recognition that what you do in a particular location could have impacts to your neighbours and abutters,” Wu told radio station WBUR. “So, when an area is designated as residential, that means certain protections are in place.”

“Airbnb is extremely reluctant to acquiesce to any kinds of regulations that are going to restrict their growth,” urban planning professor David Wachsmuth of McGill University told WBUR.

“Boston, like every other city that is confronting a large growth in short-term rentals, has a very compelling public policy case for restricting them,” said Prof Wachsmuth, “particularly trying to restrict the commercial operators who are running short-term rentals as de facto hotels, taking housing off the market.”

Prof. Wachsmuth, who studies the impact short-term rentals have on cities around the world, says Airbnb has had limited success in court, and predicts the new rules will go into effect in Boston in January as scheduled.

Unless there are changes at the top after the upcoming state elections, there is zero chance of either NSW or Victoria creating a registry of short-term lets.  The Victorian Labor government has given STHL platforms a free rein in Melbourne – with a resulting tsunami of holiday rentals in residential apartment blocks – and the NSW government had to be dragged kicking and screaming to its half-baked laws allowing by-laws banning holiday lets in strata buildings.

And no party will campaign on tighter restrictions for fear of an Airbnb assault via social media, Astroturf (fake grass roots) campaigns and targetted advertising against vulnerable candidates.  If only we had politicians with a little backbone.

Until they show up, it will be up to innovators like Bnbguard.com.au. to track down illegal hosts while strata committees explore the dark arts of tax reporting and council dobbing.

 

 

Leave a Reply

scroll to top