Airbnb Settles Lawsuit with New York State, Suit with City Continues

Airbnb Inc. settled its lawsuit against New York State over a new law restricting short-term rentals, with both sides agreeing that New York City, not the state, is responsible for enforcing it. The new law prohibits advertising of short-term rentals—less than 30 days—with violators facing fines of as much as $7,500.

After Governor Andrew Cuomo signed the bill into law on Oct. 21, Airbnb sued the city and the state claiming the restrictions were unconstitutional and infringed its free-speech rights. The site isn’t dropping the case against the city, because it feels that the new legislation is specific to New York City’s jurisdiction and violates its First Amendment rights. Airbnb maintains that banning the ads are an obstruction of free speech. The site also argues that the language within the bill isn’t clear enough to distinguish if only site users would receive a fine for advertisements that are in violation of the law or if the site would receive penalties as well for allowing them.

Both the State and City of New York said last month they would hold off enforcing the new law until Airbnb’s suit is resolved. New York is Airbnb’s largest U.S. market.