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Airbnb pulled out every trick to stop NYC from curbing rentals

Protests, lawsuits, press calls, opposition reports. Nothing worked.

NYC Airbnb Hosts Rally At City Hall As City Debates Guidelines
Airbnb and New York City have a long history of conflict. Here, Airbnb hosts protest in 2015 in front of City Hall as the city council held a meeting inside to decide how to regulate the company.
Andrew Burton/Getty Images

When it comes to New York City politics, Airbnb doesn't go down without a fight.

The New York City Council last week unanimously voted, 45 to 0, to pass a bill that requires Airbnb to give the city the names and addresses of people who rent their homes on its site. If Airbnb refuses, it could face thousands of dollars in fines.

The council said the goal of the bill is to give it an enforcement mechanism to find "bad actors" that rent out multiple apartments to tourists on a short-term basis, which cut into the city's limited housing supply.

Leading up to the vote, Airbnb did all it could to stop the bill. It held protests in front of New York City Hall. It financially backed a lawsuit against the city. And it authored a report detailing which city council members reportedly received campaign contributions from the hotel industry.

"Members of the city council are nothing more than bell hops for the major hotel corporations," Chris Lehane, Airbnb's head of policy and public affairs and a former adviser to President Bill Clinton, said during a press call a day before the vote on the bill. The city "is deliberately targeting middle class people."

Airbnb insists that New York City's bill will hurt everyday people who're making ends meet by renting out their homes on its website. But the city council says the bill is about defending everyday people.

"This is about protecting our existing affordable housing stock for the millions of New Yorkers who otherwise would not be able to live in our great City," Council Member Carlina Rivera, the primary sponsor of the bill, said in a statement.

New York City is one of the top tourist destinations on earth, and cities worldwide pay attention to how it regulates short-term home-rental companies like Airbnb. Airbnb typically takes a 9-15 percent cut of every rental. So, laws that discourage people from using the service could put a dent in its business.

The privately held company is working its way toward an initial public offering and has received $3.3 billion in funding, giving it an estimated valuation of $31 billion. That makes it the third most valuable private company in the world, after ride-hailing companies Uber and Didi Chuxing, with a global reach of more than 190 countries.

Officials nearly everywhere are grappling with how to regulate Airbnb. Besides New York, the company has clashed with lawmakers in San Francisco, Los Angeles, Portland, New Orleans, Amsterdam, Paris and Berlin, among others. Half of Airbnb's San Francisco listings disappeared overnight in January when that city enacted a law requiring all hosts to register with its office of short-term rentals.

Airbnb now faces a similar situation in New York.

Pulling out all the stops

Airbnb and New York have a long history of conflict.

The city has some of the strictest laws against short-term rentals in the country. It's illegal, for example, to rent out a whole apartment for fewer than 30 days if the host isn't staying there. In 2014, a report by the state Attorney General's office said that as many as 72 percent of the city's Airbnb rentals "appeared to violate" state and local laws. Many of those rentals have since been purged from Airbnb.

This newest battle between Airbnb and New York started in May after the city's comptroller, Scott Stringer, published a report saying the company was responsible for nearly 10 percent of rent hikes from 2009 to 2016.

Airbnb responded by claiming Stringer "manipulated the data" and was in the pocket of the hotel lobby. It also paid for a seven-figure ad campaign that said Stringer put out a "false report misleading New Yorkers about home-sharing." Stringer defended his findings and said Airbnb's allegations were "desperate attempts to distract from its effect on rising housing costs."

Shortly after, in the beginning of June, the city council introduced its bill. And, as it did with Stringer, Airbnb pulled out all the stops to discredit the council.

Airbnb published a list of New York city council members it says received campaign contributions from the hotel industry between 2013 and 2017. The company alleges roughly one-third of all city council members received donations from hotel corporations, hotel associations, individual hotel operators or the Hotel Trades Council.

Then, days before the vote on the bill, Airbnb held a conference call with reporters saying the council was paid off by the hotel industry. It also shared heartwarming videos about New York hosts on social media and organized a protest at City Hall. At the protest, Airbnb had someone dressed up as "Mr. Big Hotel Tycoon," who was wearing the Monopoly man outfit and passing out Monopoly-like cards with the names of council members it claimed received industry donations.

Finally, Airbnb said it's paying the legal fees for a lawsuit brought against New York by one of its hosts, Stanley Karol. He is suing the city on a civil rights claim saying he was targeted after speaking out against the city council bill. Karol said the city fined him up to $32,000 for renting out his home while he was there, according to the complaint.

With the city council's new bill, not only will hosts still be fined if they rent out their homes illegally, but Airbnb also faces fees. If the company refuses to share the names and addresses of its hosts with the city, it will be fined up to $25,000 for each undisclosed listing.

"The reporting required by this bill will ensure that individuals who legally use these services can continue to do so free from worry or harassment," Council Member Rivera said. "Short-term rental services and bad acting landlords continue to rake in millions of dollars in profits while harming working class families, particularly in my District. We cannot allow this to continue." 

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