NY governor approves fines for some rental ads—hours later, Airbnb sues

New York Gov. Andrew Cuomo signed a bill yesterday that will fine those who advertise short-term rentals that violate New York City's short-term rental laws. The new rules are aimed squarely at illegal ads on the Airbnb platform.

Later on Friday, Airbnb filed a lawsuit (PDF) challenging the new law in court. The company says that the law violates Section 230 of the Communications Decency Act, which protects online platforms from liability for their users' statements. The complaint also states that the New York law is an "unjustifiable content-based restriction on speech" that violates the First Amendment.

Renting out vacant apartments for 30 days or less is already illegal in New York. The new law imposes liability on anyone who places ads for such illegal rentals, whether the ad is in print, television, radio, or online. Fines range from $1,000 for a first offense to $7,500 for a third offense.

"This is an issue that was given careful, deliberate consideration, but ultimately these activities are already expressly prohibited by law," said Rich Azzopardi, a spokesman for the governor, in Bloomberg News.

Earlier this week, Airbnb made several concessions to New York lawmakers, including requiring hosts to pay local taxes and blocking hosts from listing more than one house in the city. That was hardly enough, though.

"Airbnb’s entire business model is predicated on breaking the law," said bill sponsor Assemblywoman Linda Rosenthal. "At the 11th hour they’re desperate to change the narrative, and we do not negotiate in newspapers, in the press, and especially with the lawbreakers."

Airbnb has been blamed for rising rents in big cities like New York and San Francisco, but the company claims that home-sharing helps thousands of middle class people get by. It has accused lawmakers who support the New York bill of siding with the hotel lobby.

"A majority of New Yorkers have embraced home sharing, and we will continue to fight for a smart policy solution that works for the people, not the powerful," said Josh Meltzer, head of New York Public Policy for Airbnb.

The company's arguments are similar to those it's using to fight the law in its home city of San Francisco, which requires Airbnb hosts to have registration numbers and for the platform to enforce those rules. The company sued San Francisco in June.