At the end of this month, Governor Andrew Cuomo could effectively end Airbnb in NY as we know it, making illegal the posting online of whole apartments for under thirty days, by signing into law new legislation that would impose steep fines for those that do.
In New York, the company's largest U.S. market, the state legislature has tightened regulations barring people from renting out their apartment on a short-term basis.
The legislation, which the NY state legislature passed in June, effectively strengthens New York's existing laws on short-term property listings, which, as of 2010, prohibit apartments - defined as buildings with "three or more units" - from being rented out for less than 30 days.
New York City outlawed those less-than-30-day short-term rentals in 2011, but didn't have a great way to enforce the rules.
The passage of New York's legislation marks the continuation of a trend that threatens to damage Airbnb's bottom line - and its revenue model.
The new law forbids advertising for this kind of short-term rental and imposes a fine up to $7,500. "As such, the Act unquestionably treats platforms such as Airbnb as the publisher or speaker of third-party content and is completely preempted by the CDA". And back in May, the city of Santa Monica cracked down on the business by making it illegal for residents to rent a home for less than 30 days.
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Supporters say the law will help stop illegal, unlicensed hotels and protect affordable residential housing in New York City.
In a statement released this week, Airbnb said it will prevent hosts in NY and San Francisco from listing multiple units starting on 1 November.
New York Assemblywoman Linda Rosenthal, sponsor of the New York legislation, was unimpressed by Airbnb's announcement. Andrew Cuomo is unconstitutional and benefits "price gouging" hotels at the expense of everyday New Yorkers who rent out space. The company says the 46,000 Airbnb hosts in New York City have generated more than $2 billion in economic activity.
And the legislation was backed by the Real Estate Board of New York, a monied and influential coalition of property owners in New York City.
A spokesman for Cuomo said the administration gave the bill careful consideration.
Cuomo's signature underscores a concern from companies that operate within the "sharing economy" that NY remains unreceptive to newer technologies that threaten some within certain industries, such as the hospitality and taxi industries. Critics say short-term renting like Airbnb exacerbates the city's ongoing struggle with affordable housing. In New York, the state attorney general found that 6 percent of the hosts from 2010 to 2014 supplied 36 percent of the rentals.