Airbnb says it will sue over restrictive NY law

ALBANY, N.Y. -- Airbnb says it will file a lawsuit challenging a new law in New York authorizing fines of up to $7,500 for people who advertise short-term rentals of vacant apartments.

The company says the law signed Friday by Democratic Gov. Andrew Cuomo is unconstitutional and benefits “price gouging” hotels at the expense of everyday New Yorkers who rent out space.

The fines would be imposed on those who advertise a vacant apartment in a multiunit building for 30 or fewer days. Residents who rent spare bedrooms or single-family homes won’t be fined.

Supporters say the law targets illegal, unlicensed hotels that divert affordable apartment units from the residential market.

Enforcing the law will be a challenge. Despite a 2010 law prohibiting short-term rentals in multiunit buildings, many are still listed.

The Democratic governor signed the measure, one of the nation’s toughest restrictions on Airbnb, into law Friday despite a last-minute attempt to kill the proposal from Airbnb, the popular online short-term rental service.

The fines would be imposed on those who advertise a vacant apartment in a multi-unit building for 30 or fewer days.

Residents who rent spare bedrooms, row houses or single-family homes are exempt from the law.

The San Francisco-based company has proposed regulations intended to prevent property owners from running unlicensed hotels.