The Conflict Between Airbnb and New York Is Only Beginning

Airbnb Inc. is in talks with New York officials about potentially settling a lawsuit the company filed last month against the state and city governments. The company is challenging a new law that punishes people renting their homes. But regardless of the outcome of those talks, many rentals on Airbnb will remain illegal thanks to an older law, and officials must still figure out what to do about it, posing fundamental problems for both the startup and the government.

A federal judge postponed a meeting scheduled for Monday to discuss Airbnb’s suit, saying the two sides are talking about a potential resolution. They are set to update the court by the end of the week. The talks are intended to resolve questions about how the law would be enforced, according to people with knowledge of the proceedings. A settlement isn't likely to be reached by this week's deadline, said the people, who asked not to be identified because the talks are private.