In a letter earlier this month, Airbnb told the city that new data-sharing requirements recently approved by the New Orleans City Council to crack down on illegal short-term rentals violate the U.S Constitution and the federal Stored Communications Act.
The requirements, codified into law earlier this year as part of the most recent overhaul of New Orleans’ short-term rental rules, mandate that platforms like Airbnb and VRBO share data, like property addresses, with the city. The rules were specifically designed to crack down on illegal rentals, which can be difficult to identify because platforms do not list the exact locations of their customers’ properties on their websites. The company says the requirement amounts to an unconstitutional search.
The May 1 letter from “The Airbnb Team” said the company would be “willing to compromise with the City solely to avoid a dispute” and “work with the City on developing reasonable disclosure requirements.” It also included a suggested compromise with much more limited data sharing that would likely have a significant impact on the city’s ability to sniff out illegal rentals.
The letter did not explicitly say whether Airbnb is considering taking legal action against the city, although the company has sued other cities over similar disclosure requirements in the past. Airbnb provided a statement to Verite on Friday (May 19), but did not answer questions about how it will respond to the city’s new rules.
“As noted in the letter, we are concerned with the reporting requirements in the ordinance, which ignore due process and privacy rights, and have offered the city alternative options to help support their efforts to promote compliance,” company spokesman Haven Thorn said in the statement.
As noted by earlier this year by Councilwoman Helena Moreno, who sponsored the ordinance adding the data-sharing requirements, the disclosures mandated under the New Orleans law are already required and provided by Airbnb in other cities.
“We’ve been constantly threatened as to why we couldn’t do this, or why it wouldn’t work, or why it isn’t possible,” Moreno said at a March council meeting. “But we don’t believe that. And now we’ve seen other cities being successful. … We’re just following what other cities already do. Therefore there should be no legal issues.”
New York is one such city. Airbnb’s letter notes that it sued the city of New York to overturn a local data-sharing law, successfully obtaining an injunction against the city in 2019. But it does not mention that New York’s law was significantly broader than New Orleans’ new rules, or that in 2020, Airbnb reached a settlement with New York and agreed to provide most of what the city asked for and most of what is included in the New Orleans law.
“The legislation I authored included common sense data sharing to ensure accountability and enforcement in our STR regulations,” Moreno said in a Friday statement. “It’s actually pretty ridiculous that Airbnb is objecting to such simple reporting requirements like STR location, number of days rented and taxes paid. I’m waiting for further details as to why just this one platform has such objections.”
New Orleans’ new data-sharing rules were passed as part of a broader rewrite of the city’s short-term rental laws, which got final approval from the council in March. Airbnb’s letter is one of at least two recent challenges to those new rules. This week, a group of short-term rental owners filed a lawsuit against the city to strike down the new law, similarly claiming that portions of it are unconstitutional.
Lawsuits over short-term rental restrictions are nothing new. In fact, the recent New Orleans law was only passed because of a 2019 lawsuit brought by a group of short-term rental owners against the city, in which a federal judge ruled that a key portion of the city’s rules was unconstitutional.
The council amended the law to get in line with the federal ruling, but it also took the opportunity to add a host of new regulations with the intention of reining in the industry and curbing the negative impacts of its rapid proliferation: rising rents, higher home prices, lower quality of life and effects on local businesses. Although some housing advocates have questioned how effective the law will be.
The disclosure requirements in particular were added to help rid the city of rentals operating illegally with no permit. Since the industry planted its flag in New Orleans close to a decade ago, the city has continually failed to enforce its laws and allowed unpermitted rentals to run rampant.
A recent report from Jane Place Neighborhood Sustainability Initiative — an affordable housing group that has long opposed short-term rentals — found 6,927 New Orleans listings on Airbnb as of Dec. 2022, compared to only about 2,332 active short-term rental licenses.
Airbnb’s suggested compromise would severely limit the law’s effectiveness in tracking and shutting down illegal Airbnb’s.
One of the most important pieces of the council’s new law is the requirement that platforms like Airbnb disclose the addresses for each of its listings in New Orleans. And that’s one of main things Airbnb took issue with in its letter.
“As courts have consistently found, municipal ordinances requiring the disclosure of nonpublic information — like the physical addresses of short-term rentals and the number of nights a short-term rental is listed — constitute an impermissible administrative search in violation of the Fourth Amendment,” the letter said.
However, taking out addresses from the disclosures wouldn’t have a major privacy impact on legal short-term rental owners. Under previous rules, and under Airbnb’s proposed rules, platforms had to disclose the URL and permit number for each listing. The city could then look at matching permits — which are available to the public — to figure out the address of each listing.
The real impact of Airbnb’s weaker proposed rules would therefore only protect illegal rentals. Because they don’t have any permit, illegally listed rentals on Airbnb don’t have any permit number.
An address confirmation can be vital in enforcing the city’s laws. To issue fines or take any disciplinary action against short-term rentals, the city has to hold a court-style proceeding with an independent hearing officer, where the city needs to present clear evidence of a violation.
One of the hardest things to prove, officials have said in the past, is that a specific property was actually rented out. A picture of tourists with suitcases in front of a property or a screenshot of an Airbnb listing, for example, won’t always suffice as proof that an illegal transaction took place.
Although it isn’t mentioned in the letter, Airbnb has a clear financial incentive to make sure illegal short-term rentals continue to operate. The company makes money by taking a cut of its hosts’ income, which it collects whether or not the rental was booked in accordance with local laws.
It’s unclear how the city will respond or what Airbnb will do next. Asked for comment, Mayor LaToya Cantrell’s office said on Friday that attorneys for the city were still reviewing the letter.
“We’ve received the letter and are working with the law department to fully understand the concerns presented and the best path forward,” a statement from Cantrell Press Secretary John Lawson said.
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