Last Friday, New York Governor Andrew Cuomo, signed a bill which targets short-term apartment rentalsAffordable housing in New York has always been one of the biggest challenges the state faces.

2,54 million people have applied to the city´s Housing Connect website to find an affordable place to live. Governor Cuomo established that affordable housing was on his list of priorities. He had until October 29 to sign the bill. He sided with the coalition of unions, elected officials, housing and tenant advocates and the real estate industry.

Apartment for rental
New York Gov. Andrew Cuomo has signed a bill which targets short-term apartment rentals. Image credit: The Huffington Post.

Airbnb is suing the state

The bill was sponsored by Senator Andrew Lanza, from Rhode Island, and Lisa Rosenthal, an Assemblywoman and Manhattan Democrat, who has spoken out completely supporting these measures. She believes this bill will push apartment owners to open more units to long-term tenants.

Airbnb, a $30 billion company, is directly affected by the new bill. The homestay network allows people to rent in short-term lodging in residential properties. This has been a violation of the New York law since 2010 unless the host is present, which means they are renting a room or a bed.

The new law establishes that people who advertise rentals for fewer days in a multi-unit building will have to pay $7,500. The bill stands behind the idea that companies such as this one might be making illegal rent out apartment units easier.

Airbnb responded to it by filing a lawsuit against the state. Josh Meltzer, head of New York public policy for Airbnb, stated that they cannot take responsibility for the page’s content. This is an argument also used by companies like Amazon.com, to protect themselves from questionable transactions done by users.

Other companies like Uber Technologies Inc., based in San Francisco, have also fought resistance over similar issues. It happens the same with hoteliers and taxi commissions, who see this as a threat to the business.

Ever since its foundation in 2010, Airbnb has been facing the same fight. Similar bills have been approved in other places like Barcelona and Berlin. 

Peter Schotternfels, an Airbnb spokesman, said that this bill is ignoring the voice of 10,000 New Yorkers. Eddie Anderson, an Airbnb host, rents a room in his three bedroom apartment. He is not affected by law but, he is worried that the bill will lead to a clampdown on all Airbnb rentals since he uses that to pay his rent every month.

Eric Schneiderman, the state attorney general, will be defending the state in the lawsuit. He declared that the company can’t have it both ways. Either it leaves people to practice illegal activity on their site or the government acts to protect their citizens, which is what he believes this bill does.

Peter Ward, the president of the State Hotel and Motel Trades Council, said this is a big step toward ending the illegal activity on hotels that are eliminating the affordable housing stock and driving up the rent in New York City and other parts of the country.

Airbnb is not only suing the state. Earlier in the week it offered to kick the violators of its website, set up registration for its hosts and bar multiple listings from a single host. It has a five-point plan, in which they would limit to one the number of listings a person can have, track down the violators and push for permission to collect and remit hotel-like taxes. Also, they said they removed about 3,000 improper listings in the last year.

Source: The Wall Street Journal