The company is fighting a decision by the San Francisco Board of Supervisors to fine Airbnb $1,000 a day for every unregistered host who used the service. If the company fails to comply, it may face misdemeanor charges.
SAN FRANCISCO — Executives of Airbnb have often said that officials in San Francisco, the company’s hometown, understood how to work with innovative technology companies.
Two years ago, the city and the startup drafted a law that allowed Airbnb to operate widely there, despite blowback from advocates for affordable housing. The law took effect in February and became known as the “Airbnb law” for its friendliness to the company.
Now Airbnb is suing over whether it should have to help enforce the law it helped create.
The company Monday sued the city over a unanimous decision made June 7 by the San Francisco Board of Supervisors to fine Airbnb $1,000 a day for every unregistered host who used the service. If the company fails to comply, it may face misdemeanor charges.
Most Read Business Stories
- Blake Nordstrom discloses cancer diagnosis, plans to keep working through treatment
- Verizon says 10,400 managers accept buyout offer
- Sting uses fake Amazon boxes, GPS to catch would-be thieves
- Reality sets in for the long bull market, and Wall Street is right to be afraid | Jon Talton
- Feminist group Lean In has a Sheryl Sandberg problem
According to Airbnb, the board of supervisors has violated the company’s right to free speech and the Communications Decency Act, a federal law that prevents the government from holding websites accountable for the content that is published by their users.
“While we are not always perfect, we have constantly sought to learn, get better, and work with the City,” the company said in a blog post. “There is a need for policies that protect San Francisco’s housing stock and ensure the collection of hotel taxes but also enable residents who depend on Airbnb to make ends meet.”
The company acknowledged the rules it helped create “do not work” and are overly complicated.
To calm advocates for affordable housing who feared that Airbnb was exacerbating San Francisco’s housing crunch by turning affordable apartments into short-term rentals, the company agreed in 2014 to put a 90-day cap on short-term rentals for entire homes. It also agreed to require all short-term rental hosts to register with the city. That is the law that took effect in February.
But now only 20 percent of the 7,000 San Francisco residents who rent out their apartments for less than 30 days have registered with the city, said David Campos, a member of the board of supervisors and a long time opponent of Airbnb who was co-author of the enforcement law.
“Airbnb is challenging a very modest law,” Campos said. “In so doing, Airbnb is proving that it wants to play by its own rules, that it believes that it is entitled to something no business has, absolute freedom to operate free of responsibility and oversight. It’s their way or the highway.”
The penalties take effect in July, and they would require Airbnb to pay thousands of dollars in daily fines or to wipe a huge number of listings from its system. Removing that many listings would hurt the San Francisco operations of Airbnb, which is valued at about $25 billion and has raised more than $3 billion in equity and debt.
Airbnb operates in nearly 200 countries and is fighting or has fought regulatory battles in several markets. The Seattle City Council is to vote on proposed regulation of short-term rentals like Airbnb in August.
Airbnb said in its blog post that the company had “attempted to work with the City on sensible, lawful alternatives to this flawed new ordinance,” and it listed several suggestions to improve the process. But it did not mention its own role in creating the registration ordinance.
In an interview the week before Airbnb sued San Francisco, Chris Lehane, who heads the company’s public-policy operations, pointed to San Francisco, Phoenix, Philadelphia and San Jose, Calif., as cities that had worked out effective legislation that allowed Airbnb to operate while creating rules for hosts on the platform.
“Cities should allow people to be able to share their homes on a limited, occasional basis, which is why we worked with cities like San Francisco to put in caps in place for the number of days someone can rent their apartment. This is why we helped pass through registration,” Lehane said, noting the company had helped to work out similar agreements in Chicago.
Campos said, “Home sharing is here to stay, and I have no problem with that. But the registration law Airbnb helped pass in 2014 failed on its own terms and we still need reasonable regulations and corporate responsibility.”