Airbnb has decided to drop their lawsuit against the City of New York, the largest market for its operations with revenues exceeding 1 billion dollars in the city for its hosts. Airbnb has had a huge impact on business specifically in Manhattan and Brooklyn. The lawsuit was based on a law signed in October that called for fines of as much as $7,500 for illegally listing a property on rental platforms such as Airbnb. The law would have imposed fines that would have hampered Airbnb's operations throughout the country and required additional supervision of listings being put on their website. The lawsuit was dismissed on the agreement that New York City enforce the law only against hosts and Airbnb not be fined. The settlement of the lawsuit goes into effect today December 5, 2016. For more about the settlement you can read here.
NYC property management companies have vehemently objected to Airbnb taken hold in New York City. Specifically some landlords have been fined and violations imposed as a result of tenants illegally renting out their apartments to Airbnb'ers. A recent case brought by Related exemplifies this. In the particular instance, Related attempted to evict a rent-stabilized tenant who they discovered was renting the unit out on Airbnb for $649.00 per night. The tenant was paying $6,670 for the unit on the market rent of $9,000. Related sought and received an eviction. The state appeals court held that tenants have no right to benefit from apartments that have rent restrictions.
Although there are no guarantees that this would stop illegal units cropping up throughout the city, it is certainly a positive step into deterring possible violators. It will be interesting how the City will go about enforcing the law going forward but Assemblywoman Linda Rosenthal is optimistic that there will be a crackdown. She states “I expect the city will now get down to the important business of enforcing the law against the serial lawbreakers on the site” who turn affordable housing intol illegal hotes. This is a win for everyone."
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