New York passes law making it illegal to list short-term rentals on Airbnb (update)

Unless you're renting it out for longer than 30 days, renting out your apartment in NY is against the law.

Reuters/Shannon Stapleton

New York governor Andrew Cuomo just signed a bill into law that will make it much harder for Airbnb to operate in the state. New York already prohibits rentals of less than 30 days in a multi-unit building if the tenant is not present -- a situation that many Airbnb listings advertise. This new law makes even listing an advertisement for such a situation illegal itself, a tool that some think the state will use to go after Airbnb directly.

Those who violate this new law, which the state assembly and senate voted on in June, will be subject to some heavy fines: $1,000 for your first violation, $5,000 for the second, and $7,500 for the third. According to Business Insider, Airbnb will immediately file a lawsuit against New York City and the state attorney general; the suit will claim the new law violates the First Amendment and the Communications Decency Act.

"In typical fashion, Albany back-room dealing rewarded a special interest -- the price-gouging hotel industry -- and ignored the voices of tens of thousands of New Yorkers,"Josh Meltzer, head of New York Public Policy for Airbnb, said in a statement published by Business Insider. "A majority of New Yorkers have embraced home sharing, and we will continue to fight for a smart policy solution that works for the the people, not the powerful. We are filing a lawsuit in New York this afternoon."

As for New York, it says that the activities being advertised are already illegal and thus it sees no problem with the new law. "This is an issue that was given careful, deliberate consideration, but ultimately these activities are already expressly prohibited by law," Cuomo spokesman Richard Azzopardi said, according to New York Daily News. "They also compromise efforts to maintain and promote affordable housing by allowing those units to be used as unregulated hotels, and deny communities significant revenue from uncollected taxes, the cost of which is ultimately borne by local taxpayers."

This comes just a few days after Airbnb announced plans to crack down on hosts with multiple listings in New York and San Francisco. It was an effort to reduce illegal hotel situations and keep people from buying up and then renting multiple listings to turn a big profit. It also felt like an effort to help sway NY's politicians onto their side, but that obviously hasn't worked yet.

How this will end up remains to be seen, but it sounds like Airbnb's going to have a tough time -- the existing law that was already on the books seems like it'll make fighting this new legislation much tougher. We've reached out to Airbnb and will update this post with any comment we receive.

Update: It was a matter of "when," not "if." Airbnb has announced it's suing the city of New York, Attorney General Eric Schneiderman and Mayor Bill DeBlasio for violations of the Communications Decency Act, according to TechCrunch.