An Albany state judge is scheduled to hear arguments tomorrow on the company’s bid to quash New York Attorney General Eric Schneiderman’s request for information about people who rent out their homes, a move which Airbnb described as a “government-sponsored fishing expedition.”
The court clash pits the San Francisco-based technology business that supporters say should be welcomed as a boost for local tourism against housing advocates who argue the service is driving up rents and turning affordable accommodation into illegal hotels.
Airbnb, which is said to be valued at $10 billion under a financing deal with TPG Capital, provides a marketplace for short-term rentals of homes throughout the world and said it expects to generate $768 million in economic activity in New York City this year. InterContinental Hotels Group Plc (IHG), whose brands include the Holiday Inn, has a market value of $8.3 billion.
Under New York law prohibiting illegal hotels, residents may not rent out their entire homes for fewer than 30 days. More than 60 percent of New York City Airbnb listings on January 31 appeared to violate that law, according to an affidavit filed with the court today by Sumanta Ray, director of research and analysis for the attorney general’s investor protection bureau.
Some hosts offered multiple properties including one entity listing 80, according to the affidavit.
“Airbnb generates positive economic returns for cities around the world, adds millions of dollars to local economies, and brings more people to New York,” Internet Association President and CEO Michael Beckerman said. “Airbnb should be welcomed by business and government leaders hungry for a boost in local tourism, not pushed out by politicians seeking to protect incumbents and special interests.”
Housing advocates and tenant groups counter that services like Airbnb threaten to drive up rents and turn affordable housing into illegal hotels.
The case is Airbnb Inc. v. Schneiderman, 5593-2013, New York Supreme Court, County of Albany (Albany).
The above article was written by Christie Smythe for Bloomberg.com, and can be read in its entirety by clicking here.
Attend the Property Portal Watch Conference in Singapore on the 7th – 9th May and find out more about how property portals around the world are valued.