Airbnb sues its home town over laws it helped push through

AIRBNB IS TAKING San Francisco officials to court over rules that would force it to pull down listings for hosts who didn’t register their details with the city.

Under laws that have already come into force, people listing their homes for short-term rentals on the site were required to comply with the regulations.

A 90-day cap was also placed on the length of time people could stay in entire homes advertised through the service in response to criticism that it was making housing less affordable for those living in the city.

Airbnb had worked with policymakers to come up with the laws, which were seen as friendly to the company in a city were accommodation costs have been reaching nosebleed proportions.

However it has since been claimed only 20% of the thousands of hosts using Airbnb for short-term lets were complying, so officials introduced fines of $1,000 per day for the San Fransisco company for every unregistered host on the platform.

Airbnb CEO and co-founder Brian Chesky

The penalties were to kick in from the start of next month, but the company now claims the city is violating federal laws that prevent governments from holding internet service providers responsible for what their users do.

In a blog post explaining the move, Airbnb said:

“For over five years, we have worked with city government to create fair rules for home sharing. Unfortunately, the rules do not work. There is broad agreement that the current registration process in the city is broken.”

The company claimed “an estimated 1,200 San Franciscans avoided foreclosure or eviction by hosting on Airbnb”.

It said it had come up with “a wide range of improvements” to fix the system it had played a hand in drafting for San Francisco, including the introduction of a “grace period” for new hosts to get registered and flexibility for those renting their spaces for fewer than 14 nights per year.

However the city returned fire, saying it wasn’t trying to regulate user content – it was simply trying to keep checks on what was already a regulated business activity.

A watershed moment

The case is a watershed moment for the company, which has yet to do battle in court with any of the tens of thousands cities in which it operates worldwide.

However despite its popularity with users, which has helped push the company’s private valuation to $25.5 billion, Airbnb has been facing increasing pushback from regulators who see it as destructive to local rental markets.

A recent study of New York Airbnb listings declared the service had reduced the available housing stock across the city by 10% based solely on whole homes and apartments listed on the site as available for medium-term rental.

In Dublin, where the company employs hundreds of staff, the local council recently ruled an apartment in Temple Bar that was being used full-time as an Airbnb rental needed planning permission to change its use.

Airbnb staff at Dublin's pride parade last year

The property was being advertised for sale as an “exceptional 18% gross yield real estate investment opportunity”.