A New York City law to curb Airbnb and other online home-rental services was temporarily blocked on Thursday by a federal judge, who ruled that the law likely violates the U.S. Constitution’s Fourth Amendment prohibition against unreasonable search and seizure.
In a 52-page decision, U.S. District Judge Paul A. Engelmayer issued a preliminary injunction stopping the city from enforcing the law, set to take effect Feb. 2. The law would force home-rental services like Airbnb to disclose to the mayor’s office hosts' names, addresses and other data, or face fines up to $1,500 per undisclosed listing.
“The scale of the production that the ordinance compels each booking service to make is breathtaking,” wrote Engelmayer, who sits in Manhattan on the U.S. District Court for the Southern District of New York and was an appointee of President Barack Obama. “Each month, the ordinance appropriates from every participant in the burgeoning home-sharing industry what is effectively a wholesale replica of that booking service’s database as to New York City users.”
Had the law been in effect in 2016, when Airbnb handled more than 700,000 bookings, the service would have faced civil penalties of over $1 billion for noncompliance, Engelmayer wrote.
In Thursday's ruling, Engelmayer cited the 2015 U.S. Supreme Court ruling in City of Los Angeles v. Patel. That case overturned a local ordinance mandating that hotel operators keep specific information about guests and furnish those records upon demand to the LAPD.
Jane Meyer, a spokeswoman for New York City Mayor Bill de Blasio, said the city would appeal Engelmayer's ruling. De Blasio, who signed the legislation after the City Council passed it unanimously, said at an unrelated event Thursday that “we have a huge city with a lot of Airbnb activity and a lot of concern in our neighborhoods.”
“This is a law to stop landlords from creating de facto hotels which is unfair and illegal, which creates real security problems for neighbors,” de Blasio said.
Although the litigation, Airbnb Inc. vs. the City of New York and a consolidated case against the city by competitor HomeAway, must still proceed through the court, Engelmayer ruled that the companies’ challenge to the law is likely to succeed, writing: "The city is wrong."
The companies are also challenging on other grounds, including a violation of the First Amendment, a claim on which the judge did not rule Thursday.
Airbnb spokeswoman Liz DeBold in a statement called the decision "a huge win for Airbnb and its users, including the thousands of New Yorkers at risk of illegal surveillance who use Airbnb to help make ends meet."
HomeAway spokesman Philip Minardi said in a statement that the ruling “sends a strong signal to other cities looking to emulate New York City’s misguided law.”
At the time the law passed, backers said that uncovering violations without the data necessitates intensive investigations and that sites like Airbnb reduce the city's dwindling below-market-rate housing stock — which Airbnb disputes — and that an unknown quantity of its listings are illegal makeshift hotels.
Airbnb counters that the the bill passed after a six-figure-dollar campaign by the city's hospitality union and industry, which considers the platform a competitor.