Airbnb Seeks to Curry Favor With Cuomo Ahead of N.Y. Legislation

  • Bill would punish violators up to $7,500 for repeat offenses
  • Company will block NYC hosts from listing more than 1 property

New York Governor Andrew Cuomo.

Photographer: Aaron P. Bernstein/Getty Images

In less than two weeks, New York Governor Andrew Cuomo must decide whether to sign a bill that would impose hefty fines on some Airbnb hosts in the state, dealing a potentially crippling blow to the home-sharing company in its largest U.S. market. So in an attempt to persuade Cuomo to block the legislation, Airbnb on Wednesday announced a list of conciliatory measures.

The bill Cuomo is considering would punish people who use Airbnb Inc. to advertise lodging in violation of existing state laws concerning illegal hotels. Those who do would face a $1,000 fine, escalating to $5,000 for a second offense and as much as $7,500 for subsequent violations. In New York City, it’s illegal to rent a space in an apartment building for less than 30 days, a rule Airbnb has acknowledged is ignored by thousands of members.

Among its five commitments, Airbnb said it would impose measures blocking hosts from listing more than one house in the five boroughs and requiring hosts to pay local taxes. Neither proposal is new. Airbnb acknowledged that it has already been working to prevent multiple listings in the city, as it does in San Francisco.

What has changed is Airbnb’s level of earnestness. The company wants to position itself as the defender of middle-income residents, pitted against an entrenched hotel industry, ahead of Cuomo’s impending decision. Airbnb is already in a legal battle in its home town of San Francisco and New York is one of the company’s most lucrative markets.

“You need new regulations for new things -- you shouldn’t be seeking to apply old laws to a new thing,” said Chris Lehane, Airbnb’s global head of policy and communications, on a conference call with reporters Wednesday. “The question here is, are you going to be on the side of the middle class or are you going to be on the side of the powerful interests.”

But in a city where Mayor Bill de Blasio won his election in 2013 on a platform of confronting income inequality, Airbnb also is seen as the culprit behind rising rents and giving unfair advantage to property owners who offer short-term rentals for maximum profit.

Assemblywoman Linda Rosenthal, the sponsor of the proposed law, called Airbnb’s proposals “preposterous,” and said the time for the company to negotiate the terms of the bill had passed.

"Airbnb’s entire business model is predicated on breaking the law," she said. "At the 11th hour they’re desperate to change the narrative, and we do not negotiate in newspapers, in the press, and especially with the lawbreakers."