N.Y. enacts restrictions on Airbnb, with fines of up to $7,500 US

New York state enacted one of the nation's toughest restrictions on Airbnb on Friday with a new law authorizing fines of up to $7,500 US for many short-term rentals.

The measure signed into law by Democratic Gov. Andrew Cuomo applies to rentals of fewer than 30 days when the owner or tenant is not present.

Supporters of the measure say many property owners use sites like Airbnb to offer residential apartments as short-term rentals to visitors, hurting existing hotels while taking residential units off the already expensive housing market in New York City.

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"Today is a great day for tenants, seniors, and anyone who values the safe and quiet enjoyment of their homes and neighbourhoods," said Manhattan Democratic Sen. Liz Krueger, a co-sponsor of the bill. "For too long companies like Airbnb have encouraged illegal activity that takes housing off the market and makes our affordability crisis worse."

Airbnbalmostimmediately filed a lawsuit challenging the law.

"In typical fashion, Albany backroom dealing rewarded a special interest the price-gouging hotel industry and ignored the voices of tens of thousands of New Yorkers," said Josh Meltzer, Airbnb's head of public policy in New York.

Enforcement of the new laws will be a challenge. Thousands of short-term apartment rentals are listed for New York City despite a 2010 law that prohibits rentals of fewer than 30 days when the owner or tenant is not present.

The new law won't apply to rentals in single-family homes, row houses or apartment spare rooms if the resident is present.

The complicated rules mean many New Yorkers may not know whether they can legally rent out their homes and Airbnb says it does not have the ability to remove listings that violate the 2010 law.

Supporters say the imposition of fines will likely be driven by complaints from neighbours. Assemblywoman Linda Rosenthal said the intention is to go after commercial operators who rent large numbers of vacant units in multi-apartment buildings.

"That's who we're targeting," said the Manhattan Democrat, who sponsored the bill in the Assembly.

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Airbnb mounted a last-minute campaign to kill the measure and this week proposed alternative regulations that the company argued would address concerns about short-term rentals without onerous fines.

Most people who list a rental on Airbnb are looking to make a little money while they're out of town, according to Chris Lehane, head of global policy for San Francisco-based Airbnb. The company says the 46,000 Airbnb hosts in New York City have generated more than $2 billion in economic activity.

"It's baffling to us in this time of economic inequality that folks would be looking to impose fines of as much as $7,500 on a middle-class person looking to use the home that they live in to help make ends meet," Lehane said before the bill was signed.

A spokesman for Cuomo said the administration gave the bill careful consideration.

"Ultimately, these activities are already expressly prohibited by law," said spokesman Rich Azzopardi.

An investigation of Airbnb rentals from 2010 to 2014 by the office of state Attorney General Eric Schneiderman found that 72 per cent of the units in New York City were illegal, with commercial operators constituting 6 per cent of the hosts and supplying 36 per cent of the rentals.

Schneiderman vowed to fight any legal challenge to the new law.

"The law signed today will provide vital protections for New York tenants and help prevent the continued proliferation of illegal, unregulated hotels, and we will defend it," he said in a statement.

As of August, Airbnb had 45,000 city listings and 13,000 others across the state.