Why is Airbnb suing San Francisco?

Airbnb sued the San Francisco after the city required Airbnb hosts to register with the city, or otherwise be penalized with a fine.

(AP Photo/Jeff Chiu)
Airbnb co-founder and chief executive officer Brian Chesky speaks during an announcement in San Francisco, April 19.

After San Francisco passed an ordinance regulating short term rentals in such a way that targeted Airbnb users, company officials announced that they would take the city to federal court.

Airbnb's Bay Area battle is being closely watched by several cities, including Los Angeles and New York City, which have also taken steps to regulate Airbnb listings. In April, Los Angeles proposed rules that would restrict the amount of time that home and apartment owners could rent out their rooms, the Los Angeles Times reported.

Other states, such as Arizona, have passed Airbnb-friendly ordinances that prevent communities from banning short term rentals, as The Christian Science Monitor previously reported. 

San Francisco’s housing ordinance would require Airbnb hosts (and hosts on other house sharing platforms such as VRBO) to register with the city, or otherwise be penalized with a fine.

Although Airbnb helped draft a short-term housing regulation ordinance just two years ago, only 20 percent of the 7,000 San Francisco residents who rent their homes on Airbnb have registered with the city, according to San Francisco Board of Supervisors member David Campos, The New York Times reported. 

This is not for a lack of effort on Airbnb’s part, the company claims, referencing town hall meetings and the process of registration, and extensive efforts to encourage hosts to register with the city.

On June 7, the Board of Supervisors agreed unanimously that companies that violate the city’s ordinance will be fined $1,000 for each unregistered host. The city would also force Airbnb to remove each unregistered host from the listing website.

Now, Airbnb says that it's suing the city in federal court, saying that the regulation violates the company’s free speech rights, The Wall Street Journal reported. Citing the Communications Decency Act of 1996, the Stored Communications Act, and the First Amendment, Airbnb said in a blog post that the city is attempting to regulate users' attempts to freely share content on the internet.

"It is a content-based restriction on advertising rental listings, which is speech," Airbnb explained. "These provisions squarely violate the CDA, which prohibits 'treat[ing]' websites who host or distribute third-party content, like the Hosting Platforms at issue here, 'as the publisher or speaker of any information provided by another information content provider,' and immunizes them from liability under any ‘inconsistent’ state or local law."

The city refutes Airbnb’s claims that the housing ordinance regulates listing content.

“Nothing in San Francisco’s pending ordinance punishes hosting platforms for their users’ content,” said Matt Dorsey, a spokesman for City Attorney Dennis Herrera, in an emailed statement to The Wall Street Journal. “In fact, it’s not regulating user content at all – it’s regulating the business activity of the hosting platform itself.”

Facing a chronic affordable housing crisis, San Francisco says that Airbnb contributes to restricting the amount of affordable housing available.

Airbnb says that owners and renters benefit from renting out their apartments for a few days each month, even crediting the house-sharing platform with helping some renters get through the Great Recession several years ago.

An Airbnb blog post about the platform’s decision to sue the city also claims that more than 1,000 San Francisco residents have used the house-sharing service to forestall foreclosure or eviction.

“While we have attempted to work with the City on sensible, lawful alternatives to this flawed new ordinance, we regret that we are forced to now ask a federal court to intervene in this matter,” said Airbnb of the lawsuit, adding that, “This is an unprecedented step for Airbnb, and one we do not take lightly, but we believe it’s the best way to protect our community of hosts and guests.”

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