Regulating and Prohibiting Short-Term Rentals

September 24, 2020

When the home-sharing platform Airbnb announced last month that it had submitted a draft registration statement to the Securities and Exchange Commission relating to a proposed initial public offering of its common stock, a good deal of the commentary that followed focused on the impact of the COVID-19 pandemic on Airbnb’s operations and profitability. What should not be overlooked, however, is the effect that state and local regulations limiting and even prohibiting short-term rentals have had—and continue to have—on Airbnb and similar home-sharing platforms, the customers who use these platforms to advertise short-term rentals (referred to as “hosts”), and the short-term rental industry in general. These rules include not only those in effect before the pandemic took hold, but many that have been enacted in the months since.

This column first discusses how several New York courts have ruled when facing challenges to the attempted regulation of short-term rentals. It then focuses on developments in New York City, including in the battle between Airbnb and the city itself.

Reprinted with permission from New York Law Journal, Wednesday, September 23, 2020, Vol 264 – No. 59.

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