Arguing that its listings are protected by the First Amendment and a couple of Federal Communications Acts, regardless of whether or not said listings are for offerings which are illegal, Airbnb has filed suit in District Court seeking an injunction to block the recently adopted amendment to San Francisco’s Short-Term rentals law which will require hosting platforms, such as Airbnb, Homeaway/VRBO and FlipKey, to verify that units offered for rent in San Francisco have been registered with the City, as required, prior to being listed.

As it stands, the legislation, which was approved by San Francisco’s Board of Supervisors in a 10-0 vote and is slated to go into effect at the end of July, would require Airbnb to remove up to 75 percent of their estimated 9,500 listings in San Francisco or face penalties that could theoretically total over $5 million a day. Or in the words of Airbnb, it could cause irreparable business harm if enforced.

The legislation does not require sites such as Craigslist, which do not act as intermediaries in a transaction, to verify the legality of their listings, a key distinction which was specifically included to provide cover with respect to the expected threat of a legal challenge based on Section 230 of the Communications Decency Act (CDA).

Comments from Plugged-In Readers

  1. Posted by The Milkshake of Despair

    Airbnb joins racists and other undesirables in contorting an interpretation of the First Amendment to find a place to hide behind. This is about the most un-American move possible: dilute one of the fundamental guidelines of our nation to suit your specific needs.

    • Posted by SFRealist

      The first amendment may be our most misinterpreted amendment. It does, in fact, protect racists.

      • Posted by The Milkshake of Despair

        I do not doubt that the first amendment truly protects repulsive speech. Just that those seeking protection for their regrettable actions are not acting in good faith as Americans and are diluting and eroding the actual intent of the amendment.

        Don’t get me started on the 2nd. 🙂

    • Posted by SFrentier

      I dunno, comparing Airbnb to racists wrt first amendment rights strikes me as a bit of a stretch…

      • Posted by The Milkshake of Despair

        OK, how about pedophiles instead? But seriously I’m not equating Airbnb to these repugnant individuals, just saying that they’re stepping into the same taxi cab Uber/Lyft as them by co-opting the 1st for selfish needs.

        • Posted by SFRealist

          They’re not pedophiles either. And I don’t think it helps to compare them, even implicitly, with either. (Yes, yes, you weren’t making a direct comparison, but you chose these loaded terms for a reason.)

          With all that’s going on, I’d support lowering the temperature of our rhetoric generally.

        • Posted by Elitist Pig

          How dare AirBNB do something to avoid being fined $5M a day! Those unreasonable bastards! The city of SF is just trying to get money from people who have it instead of going after 7000+ violators. The city is doing the right thing by blaming one organization for the faults of 7000+ people, AirBNB should just give all its money to the city and pack up their business.

    • Posted by MyOddCommentHandle

      orange is the new black and rich is the new white.

      we’re past the age of racism in SF. if you have the money, the rest of your story is just conversation. one race over another is a construct of older generations.

      in re AirBnB, i think they should be allowed to run wild but landlords need to update leases to re-frame acceptable use of their property by it’s renters.

  2. Posted by Lori

    This is a bummer. A friend of mine rented out her 2nd bedroom every once in a while for spare cash. She NEVER rented her whole place and was always there with her Airbnb guest. I wish this didn’t have to be an all or nothing proposition.

    • Posted by AirBNByuppieScumDevourer

      Entitled scumbags.

      “Money DOESN’T HAVE TO PLAY BY THE RULES!”

    • Posted by Cynthia

      Uh, it’s not. Your friend would simply have to register, and the site would be fined for not including her registration number on the listing.

  3. Posted by JR "Bob" Dobbs

    Airbnb has a truly excellent law firm on its side, and the claims are very clever. I just don’t see them succeeding though. They basically argue Airbnb is just a bulletin board, and the City should go after the scofflaws who list illegal units directly. If these claims work, then I don’t see why one could not open up a new “Silk Road” site allowing people to buy and sell drugs, prostitutes, and hitmen — taking a cut from each transaction — and similarly claiming immunity from legal liability under CDA 230 and the First Amendment. Good luck to them on this one.

    • Posted by Denis

      I don’t know who is representing AirBnB, but it seems more like they’re bilking the company for everything they can while leading them down a totally hopeless and endlessly protracted path that will only line the coffers of the law firm.

      AirBnB’s reputation is already horribly tainted by this quagmire and the bizarrely incompetent advice they’ve been receiving over the years. It’s too bad. Years ago, I rented out my place on AirBnB many times and have often used it traveling with generally fantastic results. Now that’s been totally ruined by AirBnB’s own hubris and laughably bad counsel.

      • Posted by anon

        I agree. Didn’t Napster try something like this and fail? And Silk road as someone pointed out. And companies challenging truth in advertising regulations?

        This seems like it has absolutely no chance of succeeding. And in fact if I had to guess, I’d guess that AirBnB doesn’t even hold out much hope of this working.

        AirBnB is a growth story and they want to show growth when they IPO. This is a stall tactic so that they can have time to go to the market with strong growth and not have all their illegal listings shut down.

      • Posted by Pioneer

        I think the end game here is a record setting IPO share value, not a win with this silly lawsuit. They are delivering profitable quarters this year and maximizing valuation with new investments.

        • Posted by JR "Bob" Dobbs

          I think that’s right. This is a “moonshot” action. If (against the odds) Airbnb could get a favorable ruling on these claims, which would essentially give them immunity from any liability for illegal listings, that would be worth billions of IPO dollars (even if later reversed on appeal post-IPO). And if this lawsuit fails, well no net loss as the status quo remains. I know the players here. The City Attorney is heavily outgunned. They would be wise to hire their own heavy-hitting outside lawyers.

          • Posted by anon

            But unlike Craigslist and some others, AirBnB directly accepts payment from users for illegal housing services. They aren’t merely a platform to host the “speech” of people listing their apartments.

          • Posted by JR "Bob" Dobbs

            Not really my area, but my 2 cents is that Airbnb would be on solid ground if the listers and renters dealt with and paid one another directly (like eBay). But since payment is made directly to Airbnb, and it also makes a number of rules and provides insurance, it is too intimately involved in the transaction to garner any protection under CDA 230 as a mere intermediary. But we will see. One would think Airbnb would move fairly soon for a preliminary injunction, which will tee this up fairly soon.

  4. Posted by DanRH

    my god, enough already AirBnB…just work with the city to figure this out already. And don’t hide behind it being ‘too difficult’ to figure out. Give me a break.

    Step 1: person registers at SFGov and gets unique number. SFGov makes available to public a dbase/website of all registered addresses and # of days said address was rented out.
    Step 2: daily feed sent from SFGov to AirBnB of legit addresses.
    Step 3: daily feed from AirBnB to SFGov of # days each unique number has been rented out in calendar year. That info is available in public dbase/website.

    SFGov gets ability to audit how AirBnB reports this data. Public can issue complaints against address/code, but since most of the data is public, at least everyone is aware of who is doing what and how much. All out in the open.

    • Posted by SocketSite

      The claims of difficulty in registering, verifying and tracking usage are subterfuge.

      The underlying concern of Airbnb is that the vast majority of units listed for rent in San Francisco are not only currently illegal, but would likely never qualify for registration per the terms of the City’s Short-Term Rentals Ordinance.

      In addition, being responsible for the legality and usage of its listings is a precedence which Airbnb doesn’t want to cement.

      • Posted by Hunter

        Zing! This is what I wish journalists were reporting on—it’s not really the threat of fines that scares the company, but the actual revenue lost if AirBnb were forced to remove bad-faith listings that would never get past the city’s (fairly lax) regulations.

      • Posted by moto mayhem

        it would be easy for airbnb to enforce this within their userbase. they are seriously a bunch of A-Holes. I hope other comapneis apply and take over as market leaders. AirBNB is a sleazy company

    • Posted by dwf

      Well said.

      • Posted by SFer

        It’s probably 90% of tenants illegally subleasing, and 10% of homeowners who are sick & tired of the City’s ever changing rules.
        The Office of STR is a joke. What a waste of tax payers money. Just give the power back to the rightful owner and you’ll see these event disappear from the neighborhoods. Airbnb is a creepy two faced company.

  5. Posted by sethgreen

    do the right thing airbnb. this is waste of everyone’s time and makesyou look lame.

  6. Posted by SFrentier

    Why y’all hatin on Airbnb? Personally I think it’s a great company! And I’m glad that they are SF based. First, it’s a great and innovative idea- I’ve used it in numerous cities, and I much prefer living in a real home/apartment on a local street, rather than a generic hotel. Second it provides a great income source for those who need it, not to mention meeting travelers, expanding your horizons, etc. I mean, didn’t you people ever backpack across Asia or Latin America? (No gap year for busy body Americans I guess.) Stay in a youth hostel, or crack open a lonely planet guide? And third, I find it rather convenient that many for rent flats are diverted via Airbnb, as opposed to competing directly with my long term rentals; yep Airbnb hits all the right notes for me 🙂

    I’m glad Airbnb has the deep pockets to go after [this Board of Supervisors]. Challenge them! Just like property owners here do on a regular basis. All these anally retentive and overreaching regulations are for kindergartners. I hope they can win this baby.

    • Posted by JR "Bob" Dobbs

      This lawsuit is pretty limited. Airbnb concedes that the illegal conduct is properly deemed illegal. They are just claiming that enforcement must target each individual lister/law-breaker rather than Airbnb itself.

      For the record, I also really like airbnb and use it often (on three continents so far). But I’m also a big fan of the rule of law.

    • Posted by James

      “Airbnb, destroying neighborhoods one stay at a time”

      But seriously, I hate them because I’ve lived in places where people airbnb’ed their place – it sucks! I don’t pay rent to live in a hotel – I don’t want a bunch of people coming and going. They don’t treat the place like they live there – they’re just there for a few nights so they couldn’t care less about being quiet, respectful, etc.

      Of course, that’s not true of everyone, but enough to be an annoyance.

      I also think the larger issues of removing rental stock, etc is a problem, but I’m not too well versed in that.

      • Posted by SFrentier

        I agree that bad guests and careless hosts can be a serious problem. I think Airbnb needs to set up an effective system where the burden is on the host. i.e. Easy me anise for neighbors to complain; stiff earnings to hosts; auto removal of host unit if there are 3 noise compaints without resolution.

        • Posted by SFrentier

          And also quickly banning any guest that gets more than two noise complaints on their record. Things like this would help a lot.

        • Posted by HousingWonk

          Libertarian fantasies about counting on private companies to self-enforce when its in their financial interest to look the other way is how we got into the ratings scandal mess that played a critical role in allowing Wall Street to commit the market-wide fraud that led to the Great Recession.

    • Posted by anon

      Napster got shut down and yet we still have digital music. Don’t confuse Uber/AirBnB the companies with the general idea of car/home sharing.

    • Posted by seriously

      Thank you. I for one love Air BnB. Companies like that are the future of SF and I couldn’t be prouder. All the Air BnBs I’ve stayed in were way better than hotels and are a great chance for large groups of friends to stay together.

    • Posted by Sabbie

      First, takes away rental housing from a very tight market, driving up prices for everyone else. Second, makes life hell for the neighbors; they’re not paying the highest housing costs in the nation just to live next door to an amateur gypsy hotel. Third, violates zoning in RH1 areas.

  7. Posted by MossyBuddha

    It’s important to note that the idea of hiding behind the first amendment to shield commercial “speech” has a long conservative pedigree.

  8. Posted by jimmy

    Does the City not have an entire dept. simply for short term rentals? Or, are they too incompetent to enforce the law?

  9. Posted by dwf

    AirBnB is the post child for Scofflaws Business Model: “internalize the profit, externalize the costs”. Can you say it with me “internalize the profit, externalize the costs”. “internalize the profit, externalize the costs”…

    • Posted by ess

      The insurance industry has had a name for this for a long time now: “shirking.”

      • Posted by ess

        On further investigation, the term is used in economics as a whole.

  10. Posted by Gus

    The claim is outrageous, and I hope/expect it will be shutdown. You can argue “free speech” (and I believe rightly so) when you are a bulletin board or a facilitator of out-of-band transactions, without commercial interest in the actual content itself. Once you are brokering transactions, making a market and taking your commission, you are no longer at arm’s length—you are a party.

    I like AirBnb as a service—I have used it to list my place, which I live in, from time to time when I’m out of town. But it is saddening the extent to which it undermines law, and hurts real people (I have many friends who suffer because they now live in / near “hotels”) and now apparently claims no responsibility. The city should belong to people, not corporations. Sue us? F you, AirBnb. Get mad.

    • Posted by BobN

      Is it really AirBNB’s fault that they undermine a badly crafted law?

  11. Posted by anon2

    The reason Airbnb has become so popular (and problematic) is because there are not enough hotels in town to meet the demand from tourists. There is such a disparity between supply and demand, that our hotels have apparently become the most expensive in the world.

    During the bigger conferences, hotel rooms become so scarce, that last year’s Dreamforce supplemented the existing stock by renting an entire cruise ship.

    It’s the same thing with Uber, just look at the numbers. A year ago there were 16,000 Uber drivers in San Francisco picking up the excess demand from less than 2,000 taxis.

    Laws and lawsuits might do something, if only just to push the activity further into the shadows, but the issue will never be resolved as long as the imbalance remains so staggeringly huge.

    • Posted by ess

      Until AirBNB starts offering subprime mortgages, the comparison to Uber is circumstantial at best.

  12. Posted by Anon

    I find it odd that they are invoking the 1st amendment, but I can’t blame theme from objecting to the county of SF putting the burden of enforcing regulations on their users. The city obviously has proof of wrongdoing by all these property owners and should get a list from Airbnb (through the court if necessary) and then go after the real wrongdoers. This is similar to a landlord being sent to prison because his renters are engaged in illegal activity from the apartment they are renting.

  13. Posted by folderpete

    If this law gets enforced, ABnB loses 2/3s of its market – in SF anyway, and probably further, in time. ABnB has no choice but to fight back some/any way.

    That’s got to take a bit out of … valuation, and should be of concern to investors contemplating IPO.

    • Posted by moto mayhem

      why would they lose 2/3 of market? many clients using airBNB will actually register if they begin enforcing registration. they are just being poor corporate citizens. hotels have to register. so should airbnb

      • Posted by JR "Bob" Dobbs

        Because most cannot register and legally rent their units under the terms of the ordinance (or can’t rent them as many days as they do). Don’t know if that would knock out 2/3, but probably close. So it’s not just a matter of failing to register.

  14. Posted by wow

    If airbnb has lost y’all, it has lost the argument.

  15. Posted by JR "Bob" Dobbs

    Judge ruled for the City and upheld the new law. Threw a bone to airbnb and suspended the law until the City develops a functional enforcement mechanism, but that is unlikely to be an issue.

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