March 18, 2019 Ninth Circuit denies Airbnb/s appeal and upheld Santa Monica’s restrictions.
In case you missed it, this week, in a devastating loss for Airbnb, a three-judge panel of the United States Court of Appeals for the Ninth Circuit denied Airbnb’s appeal and upheld the Santa Monica ruling prohibiting vacation-rental stays unless a resident is present.
The city of Santa Monica was reportedly pleased with the court’s decision. “This critical local law prevents residences in our community from being converted into de facto hotels; it protects affordable housing and it helps residents stay in their homes,” Lane Dilg, Santa Monica city attorney, said in a statement, quoted by the San Francisco Chronicle.
This ruling should serve as a warning for Airbnb as they attempt to fight similar regulations in other cities across the U.S. The regulations in Santa Monica are reasonable and lawful. Municipalities, including Los Angeles, Washington D.C., Boston, among others, with similar standards in place should be confident that the regulations they have enacted to protect their neighborhoods and housing prices will continue to be upheld by the highest courts in our nation. Hopefully this ruling will encourage other municipal leaders to pass strong short-term rental laws to rein in Airbnb and its negative impacts on housing and residential neighborhoods.
Below is the full text of the article.
ICYMI: Strict Airbnb rules in Santa Monica upheld by appeals court
San Francisco Chronicle
By Carolyn Said
March 13, 2019
In a blow to Airbnb, a federal appeals court upheld Santa Monica’s strict vacation-rental rules, which ban home stays unless a resident is present.
The beach town’s regulations, among the strictest in the nation, prohibit rentals of whole homes to travelers for less than 30 days. Vacation-rental hosts in the 90,000-person city can only rent rooms to tourists and must be present throughout the stay.
The ruling may have ramifications outside of Santa Monica. San Francisco’s Airbnb and its Austin rival, HomeAway/VRBO, had joined forces to fight the regulations. Both told the court that they feared copycat laws outlawing vacation rentals.
Airbnb’s runaway success has spurred cities worldwide to clamp down on vacation rentals in homes out of fears that they will cannibalize permanent housing and change neighborhood character.
Those regulatory battles cast a shadow over Airbnb’s plans for a Wall Street debut this year or next. On Wednesday, co-founder Nathan Blecharczyk implied that the world’s third-most valuable company may wait until 2020.
“We have already said that we are taking the steps to be ready to go public in 2019. That doesn’t mean we will go public in 2019,” he told Business Insider in an email interview.
Although Santa Monica’s laws apply only to that city, the ruling by the Ninth Circuit Court of Appeals could embolden other places to seek similarly severe curbs on home stays. New York state already forbids vacation rentals unless hosts are present. In November the city of South Lake Tahoe voted by a narrow margin to ban vacation home rentals in residential neighborhoods within three years.
“Despite our efforts, the city (of Santa Monica) insisted on an approach that was out of step with progress across the country,” Airbnb said.
Santa Monica welcomed the ruling.
“This critical local law prevents residences in our community from being converted into de facto hotels; it protects affordable housing and it helps residents stay in their homes,” Lane Dilg, Santa Monica city attorney, said in a statement.
Airbnb and HomeAway/VRBO argued that the Santa Monica law, which also required the companies to police their websites, violated their free speech rights under the First Amendment and the Community Decency Act, which shields web providers from liability for content on their sites. The companies used similar arguments when fighting a vacation-rental law in San Francisco. In both cases, courts rejected the companies’ contentions.
