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A federal judge on Thursday blocked a recent New York City law intended to crack down on Airbnb and other online home-sharing sites that city officials say have essentially turned residential apartments into illegal hotels and have aggravated the city’s housing shortage.
The law, which was enacted last summer and was to go into effect next month, would have required the home-sharing services to disclose monthly to the city detailed information about tens of thousands of listings, and the identities and addresses of their hosts.
Airbnb and another firm, HomeAway, sued in August, contending the law was unconstitutional.
On Thursday, the judge, Paul A. Engelmayer of United States District Court in Manhattan, granted Airbnb and HomeAway’s request for a preliminary injunction, stopping the law from going into effect. He wrote that the ordinance violated the guarantee against illegal searches and seizures in the Fourth Amendment, and that the companies were likely to prevail on their claim.
“The city has not cited any decision suggesting that the governmental appropriation of private business records on such a scale, unsupported by individualized suspicion or any tailored justification, qualifies as a reasonable search and seizure,” the judge wrote.
Airbnb called the decision “a huge win for Airbnb and its users,” including “thousands of New Yorkers at risk of illegal surveillance.”
The decision could aid home-sharing services in their fight with other cities that have sought to regulate them, putting a limit on how much information local governments can demand.
The ruling also dealt a major blow to New York City’s political leaders, Mayor Bill de Blasio and the City Council speaker, Corey Johnson, who had championed the law as a way of combating rising rents. Mr. de Blasio signed the law in August after it passed the Council unanimously. It was seen as a major victory for Mr. Johnson just months into his tenure as speaker.
Speaking at a news conference, Mr. de Blasio defended the law on Thursday and predicted that the city would “ultimately prevail” in court.
“We have a huge city with a lot of Airbnb activity and a lot of concern in our neighborhoods and, unfortunately, a lot of examples of abuse,” he said. “To put a strong data regimen in place made all the sense in the world.”
Jacob Tugendrajch, a spokesman for Mr. Johnson, called the law a “vital protection against illegal hotels” and said the Council would continue “the fight for this common sense, data-driven law.”
Mr. de Blasio has contrasted home-sharing services with the hotel industry, which is subject to inspections and regulations that allow the city to hold owners accountable. He has argued that Airbnb should also be required to turn over information that helps the city protect the public interest.
An influential union for hotel workers, the Hotel Trades Council, strongly backed the law.
In a 52-page ruling, Judge Engelmayer did not rule on the merits of Airbnb and HomeAway’s claims, but said the injunction would block the law from taking effect pending resolution of the litigation, which he said would proceed expeditiously.
The law would require online rental services to disclose the addresses of its listings and the identities of its hosts to the city’s Office of Special Enforcement on a monthly basis. Hosts would also be required to list whether the dwelling is their primary residence and whether the entire unit or a portion is available for short-term rentals. Companies that failed to share the data would be subject to fines of $25,000 for each listing they did not disclose.
New York City is Airbnb’s largest domestic market, with more than 50,000 apartment rental listings. But under state law, it is illegal in most buildings for an apartment to be rented out for less than 30 days unless the permanent tenant is residing in the apartment at the same time.
City officials hoped the new disclosure requirements would make it much easier for the city to enforce the state law and would lead to thousands of units rented through Airbnb in the city coming off the market.
Airbnb and other home-rental services have been battling regulation nationally and abroad, as cities including Seattle, San Francisco and London have required such companies to share some data through a registration system for listings.
San Francisco, for example, enacted a law in 2016 that fined home-sharing companies if a host rented an apartment through their platforms without registering it first with the city. Airbnb sued and reached a settlement with the city in 2017, under which the company agreed to register hosts automatically and to turn over a monthly accounting of its listings. Listings on Airbnb plunged by half after the rules went into effect.
But the measure New York City passed went further. Rather than set up a registration system, the law instead required Airbnb and similar companies to turn over the information its users had shared with them, including personal information about the hosts.
Roberta A. Kaplan, a lawyer for Airbnb, said, “I’m not aware of any city that has tried anything of this scope.” The opinion, she added, “sends a strong message to other cities that the New York approach is not the way to go about doing this.”
Judge Engelmayer, in his opinion, said that in the era before electronic data storage, an attempt by a municipality “to compel an entire industry monthly to copy and produce its records as to all local customers would have been unthinkable under the Fourth Amendment.”
The judge said that upholding the ordinance would invite other cities to make “similar demands on e-commerce companies” to routinely turn over broad-ranging customer records to investigative agencies.
That, he added, could allow regulators “to troll these records for potential violations of law” even when there had been no basis to suspect a violation.
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