Airbnb, the online service that enables people to list or rent short-term lodging in residential properties, filed a lawsuit on Friday afternoon in Federal District Court in the Southern District of New York. The lawsuit is the companies’ response to a new law that allows the state to impose steep fines on Airbnb hosts who break local housing regulations. The Airbnb suit claims this law would cause it “irreparable harm”, and violates the company’s constitutional rights to free speech and due process, as well as the protection it is afforded under the Communications Decency Act, which is a federal law that says websites cannot be held accountable for content published by their users.

WHAT’S THE PROBLEM?

So, what exactly is the issue with Airbnb that prompted this new law? Apparently, the concern is that Airbnb is making it easier to illegally rent out apartments for short periods to travelers, which decreases the amount of housing for full-time residents, and drives housing costs up. It has been illegal in New York to rent out an apartment for fewer than 30 days. However, some people have ignored that law, and have been using Airbnb to rent apartments for shorter periods of time. The new law gives authorities the power to fine hosts up to $7,500 if they are caught listing a property on Airbnb.

For now, it sounds like we will have to wait and see what impact the new law, and Airbnb’s lawsuit have on the housing and online rental market.

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