Should an Airbnb host renting out a spare bedroom or two be subjected to the same rules as a hotel? Should Airbnb give a complete list of its hosts' names and contact information to local government officials so they can enforce those rules? And what exactly should happen to Airbnb hosts who don't follow all the requirements for a hotel, such as installing an automatic sprinkler system? 

These are among the questions at issue in lawsuits between the City of New York, Stanley "Skip" Karol, an Airbnb host in Brooklyn's Sunset Park neighborhood, and Airbnb. Their resolution could have implications for Airbnb hosts across the country.

Airbnb and New York City have been battling each other in court and in the state and municipal legislatures for years now. More recently, Karol, who uses Airbnb to rent out spare bedrooms and a basement space in his childhood home got caught up in their battle. At issue is up to $32,000 worth of fines imposed by the city's Office for Special Enforcement for violations Karol's attorneys say are baseless. 

Instead, Karol has sued the city using funding from Airbnb, alleging that the fines are in fact retaliation for his speaking out at a public City Council meeting--and on an Airbnb video--against proposed legislation to require Airbnb to provide names and contact info of all its hosts in the city to municipal government officials. On Wednesday, the same day that Karol filed his lawsuit, the legislation passed. The city has now filed suit against Airbnb to compel it to provide the host names and contact info. Thus far, the company has refused, claiming that the city's subpoena is too broad and demands information that the city doesn't need. Karol's suit also claims that the City Council is acting in the interests of the New York hotel industry, which has made large contributions to several of its members and has provided investigation help in collecting evidence against Airbnb hosts.

Singling out one host?

About two years ago, New York State passed a law prohibiting the advertising of short-term rentals. And some estimates suggest that more than 70 percent of the Airbnb listings in New York City are illegal and could be subject to fine. Nevertheless, a year ago, only 139 out of more than 23,000 hosts who seemed to be violating that law had been fined. So Karol's claim to have been singled out appears to have some merit. On the other hand, the city may simply be cracking down on Airbnb hosts and other big fines may still be to come.

Although Airbnb is fighting New York City tooth and nail for the moment, in some other places it has begun cooperating with local authorities and lawmakers. In San Francisco, for instance, which passed a law requiring short-term rental hosts to register with the city, Airbnb has been cleaning up its list of hosts and making sure those who remain are registered in accordance with the law. 

If Airbnb does arrive at a settlement with New York the way it did with San Francisco, it may voluntarily hand over the names of hosts. Even without a settlement, the company might still be forced to hand over host names if it loses in court. If that ever does happen, hosts in New York City can be sure of one thing: Karol won't be the last to get hit with hefty fines.

Published on: Jul 22, 2018
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