Airbnb sues San Francisco over registration rules

Airbnb filed suit against San Francisco in federal court Monday over recently approved legislation requiring short-term rental companies to verify hosts are registered with The City before allowing them to list properties.

The lawsuit, filed today in U.S. District Court in San Francisco, argues that the ordinance violates federal laws protecting internet speech and commerce.

In particular, the company says the Communications Decency Act prohibits the government from holding an internet platform liable for content posted by people who use the service or requiring platforms to verify posted information.

In addition, the Stored Communications Act prohibits the government from requiring communications and internet platforms to hand over user information without a subpoena, the lawsuit argues.

Short-term listings have been a source of controversy in San Francisco in part due to concerns that they are encouraging hosts to illegally remove units from the rental market for use as full-time hotel rooms, exacerbating the housing crisis. The unregistered rooms can also lead to unpaid hotel taxes, landlord issues and impacts on neighbors, according to critics.

San Francisco began requiring hosts to register and pay hotel taxes last year, but has struggled to enforce that requirement. Only around 25 percent of hosts listing rentals on Airbnb are registered, according to city figures released earlier this year.

Airbnb, the most prominent of the companies offering short-term rental listings, has so far resisted requests by the city to share information about hosts and spent more than $8 million to defeat a ballot measure last November that would have increased regulations on short-term rentals. The company has agreed to collect hotel taxes on bookings made through its platform, however.

The legislation passed unanimously by the Board of Supervisors earlier this month, introduced by Supervisors David Campos and Aaron Peskin, targets listing companies directly by requiring them to verify hosts are registered. Companies that fail to do so can be fined up to $1,000 a day for each listing.

In order to comply with the ordinance, Airbnb would have to remove a “substantial number” of listings, including some that otherwise comply with city law, the lawsuit states.

Peskin and Campos acknowledged the legal concerns Airbnb raised when introducing the bill, but said they were confident it was written narrowly enough to avoid violating the federal statutes in question.

The city attorney’s office has said the ordinance is written so that it does not regulate the content of posts on the web site but instead regulates the business activities of the hosting platforms.

In a statement posted Monday, Airbnb argued that registration was too difficult and complicated for hosts and the city should work to make the process easier:

“Despite the Board of Supervisors’ acknowledgement that the current process is broken, the proposal does nothing to address the problem. … Instead, the new law doubles down on a broken system by threatening websites that don’t remove home sharers who can’t navigate a confusing, inefficient, and bureaucratic process that often takes months to complete.”

The company today argued for improvements including a simplified application process, a grace period for new hosts to register, flexibility for hosts renting for less than 14 nights a year and elimination of the business tax requirement.