Airbnb Says City’s Ban On Short-Term Rentals Violates Federal Law, Constitution

Image courtesy of Ken Shelton

In May 2015, the California city of Santa Monica — the one with the famous pier that’s in just about every beach movie ever made — revised its laws to effectively bar most Airbnb rentals. Now the online home-sharing platform is accusing the city of violating the Constitution and multiple federal laws.

Chapter 6.20 of the Santa Monica Municipal Code now prohibits all “vacation rental activity,” which is defined by the ordinance as a rental of 30 or fewer days where the guest and the homeowner are not staying together on the property.

So if a Santa Monica resident was going away for two weeks and wanted to rent out their home via Airbnb while they were away, that would not be allowed.

Even if a homeowner in Santa Monica were going to be present during that short-term rental, the city requires that hosts obtain a business license, assume responsibility and “actively prevent” any “nuisance activities that may take place as a result of home-sharing activities” — while also complying with all local health, safety, building, fire protection, and rent control laws.

In spite of the fact that most short-term rentals are prohibited by this ordinance, it also has additional requirements for listing platforms like Airbnb. The must not only collect and remit taxes to the city, they must regularly provide the city with a list of all their properties in Santa Monica, along with the name of the homeowner, the length of each stay, and the price paid for each rental.

Violation of the ordinance could result in penalties of up to $500 and six months in prison.

Since the city enacted the ordinance, Airbnb says it has received multiple notices from the city demanding the removal of “hundreds” of allegedly unlawful vacation rentals.

All of these prohibitions and requirements violate an array of constitutional protections and federal laws, contends Airbnb in a lawsuit [PDF] filed on Friday in Los Angeles.

First up, the requirement that Airbnb provide reports on its Santa Monica hosts and remove their listings at the city’s request. The company contends this is a violation of the Communications Decency Act (CDA), which provides websites a safe harbor from liability for content posted by third parties.

The company says it can’t be held liable if a Santa Monica homeowner lists an unlawful vacation rental, as this is third-party content that Airbnb merely hosts. It accuses the city of violating the CDA by forcing it to screen and verify all listings, or take down postings that allegedly run afoul of the city ordinance.

“The Ordinance seeks to hold Airbnb liable for content created by third-party users, by punishing Airbnb for listings posted to its platform where those listings do not comply with City law,” reads the complaint. “As such, the Ordinance unquestionably treats online platforms such as Airbnb as the publisher or speaker of third-party content and is completely preempted by the CDA.”

The lawsuit also alleges that the city is violating the Stored Communications Act and the Fourth Amendment by “requiring disclosure to the City of certain customer information without any legal process or pre-compliance review.”

Airbnb claims the ordinance also violates both the First Amendment and the Due Process Clause of the Fourteenth Amendment because it is “unconstitutionally vague and fails to provide an ordinary person with notice of the conduct it punishes.”

The company is asking the court to rule that the city not be allowed to enforce the ordinance.