Airbnb sues Anaheim over law that makes the rental site liable for hosts who violate city law

Airbnb sued the city of Anaheim on Thursday, challenging a new city law that imposes fines on short-term rental sites for listing homes and apartments that violate the city’s rental regulations.

The lawsuit, filed in U.S. District Court in Santa Ana, marks the second time in so many months that the popular rental site has sued a city over regulations that target online rental sites over violations committed by hosts who use the sites.

Airbnb sued its hometown of San Francisco last month over a law that called for penalties against rental websites that post properties for owners who don’t have a city permit or exceed the number of nights allowed to rent.

In the latest lawsuit, Airbnb argues that Anaheim’s new law unfairly make Airbnb and other rental sites responsible for making sure that the properties listed in Anaheim meet city regulations.

An Anaheim spokeswoman said the city doesn’t comment on pending litigation.

The Anaheim law says hosting platforms must remove listings of rental units that don’t have city permits or otherwise violate city law within 10 calendar days or face fines of $500 for the first offense, $1,000 for the second offense and $2,000 for a third or subsequent offense.

Short-term rentals have become popular in Anaheim in the last few years, especially among tourists visiting the Disneyland Resort or the Anaheim Convention Center.

At first, the city created a permit process and collected taxes for properties that were rented for fewer than 30 days. But when residents began to complain about noise, trash and traffic problems generated by the renters, the city temporarily stopped issuing new short-term rental permits.

The Anaheim City Council voted this month to permanently stop issuing permits for short-term rentals and gave existing permit holders 18 months to cease operations. During that period, rental hosts must abide by tough new restrictions on noise, occupancy numbers, parking, fire safety and access. The 18 months begin Aug. 11.

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The law imposes fines of up to $2,500 on the property owners for violations of such rules and notes that “a hosting platform shall not otherwise facilitate the occupancy of a short-term rental if the occupancy will violate any ordinance, regulation or law of the city.”

Airbnb lawyers say the law unfairly puts the responsibility of ensuring that the property owners meet the regulations on Airbnb instead of on Anaheim regulators.

“We want to keep working with governments to craft rules that work, but the city of Anaheim quickly banned this economic lifeline and created regulations that violate federal law,” Airbnb spokeswoman Alison Schumer said.

The lawsuit says the regulation violates constitutional rights to free speech and equal protection under the law as well as the 1996 Communications Decency Act, which prohibits states and local jurisdictions from holding Internet platforms liable for content created by users of the websites.

The lawsuit also says that the ordinance “will have an impermissible chilling effect on speech” because Airbnb won’t know which listings are lawful and which are not and therefore will have to stop publishing all listings from Anaheim.

The lawsuit asks a federal judge to prevent Anaheim from enforcing the penalties on Airbnb and other rental sites. 

Anaheim and San Francisco are not the only cities facing legal challenges over short-term rental regulations. San Clemente and Hermosa Beach were both sued in June by homeowners who say the cities failed to get approval from the California Coastal Commission before imposing restrictions on short-term rentals near the beach.

hugo.martin@latimes.com

To read more about the travel and tourism industries, follow @hugomartin on Twitter.

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