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Airbnb Seeks Peace With New York and San Francisco Officials

(Bloomberg) -- Airbnb Inc. is taking steps to resolve long-standing disputes in two of its largest and most lucrative markets.

In its hometown of San Francisco, the apartment-sharing website has settled a lawsuit requiring it to register its rental properties with the city. In New York, Airbnb is working with a local lawmaker to carve exceptions into a housing law. Airbnb said it will register its New York hosts in a state database and permit them to rent only one unit at a time, the home where they live.

The nine-year-old upstart has been facing pressure from governments saying its home-sharing website squelches the housing supply by providing landlords with incentives to turn apartments into illegal hotels. Regulatory tensions remain a major hurdle for a potential initial public offering for Airbnb, which was valued at $31 billion by investors this year.

Monday’s settlement in San Francisco is a conciliatory move for the travel startup, which until recently, took a more pugnacious approach to city regulators. Last year, Airbnb sued San Francisco in federal court after legislators passed a law holding the company liable for collecting fees on unregistered properties that the company had provided booking services. Airbnb claimed the rule violated the First Amendment and Communications Decency Act.

“This is a game changer,” San Francisco City Attorney Dennis Herrera said in a statement. “This agreement helps protect the city’s precious housing supply by obligating these companies to ensure that all their listings are legal and properly registered.”

In 2015, San Francisco had passed a law requiring Airbnb hosts to register with the city. Of Airbnb’s estimated 8,000 hosts, only about 2,100 took efforts to register, Herrera said.

Airbnb said it will set up a simple way for hosts to register with the city through the company’s website. In its most basic form, San Francisco rentals listed on Airbnb must now include a city registration number.

The city will continue to police Airbnb’s activities, Herrera said. Airbnb will provide officials a record of local listings so the city can verify whether a host has been registered. Airbnb has agreed to cancel future stays and deactivate listings if there is an invalid registration, he said.

Airbnb’s new San Francisco registration system will phase in over eight months, said Chris Lehane, the company’s head of global policy. “We fundamentally do believe that platforms need to take responsibility,” he said.

The New York bill introduced this weekend has enraged some anti-Airbnb legislators. “Once again Albany is about to be subjected to Airbnb’s corporate-funded Astroturf lobbying,” New York State Senator Liz Krueger said in a statement. “Fortunately for New York residents, legislators are not buying it.”