Airbnb drops legal fight with NYC over new rental law

Airbnb has agreed to drop a lawsuit against New York City over a new law that will fine hosts for listing many common short-term rentals in the company's biggest US market.

The short-term home rental service said late Friday it had settled the lawsuit filed against the city two months ago. The lawsuit challenged legislation signed into law in October that imposes fines of as much as $7,500 on hosts in multi-unit buildings for listing rentals of less than 30 days.

The home-rental company, which now has more than 2 million listings in nearly 200 countries, has similar battles with other cities, including San Francisco. Critics accuse Airbnb of contributing to tighter housing markets, with landlords taking rental units off the market to capitalize on short-term rentals.

Airbnb dropped the lawsuit when it was made clear the city wouldn't levy fines against the company. Lawmakers have said the new regulations were not intended to single out Airbnb.

"As Airbnb knows, this state law does not target their company," a spokeswoman for Mayor Bill de Blasio said in a statement Friday to the Wall Street Journal. "Instead, it provides the City with an additional tool to use against those seeking to turn permanent homes into illegal, short-term stay hotels. The City will enforce this and other existing laws against bad actors."

An Airbnb spokesman said the company will work with city officials on ways to cut down on illegal home-rental activity.

"We look forward to using this as a basis to finding an approach that protects responsible New Yorkers while cracking down on illegal hotels that remove permanent housing off the market or create unsafe spaces," Peter Schottenfels, a spokesman for Airbnb, said in a statement.

It's been illegal since 2010 for New Yorkers to rent out a whole apartment on Airbnb for fewer than 30 days. The law signed in October by Gov. Andrew Cuomo doesn't affect short-term listings of private or shared rooms.