Airbnb sues to block new SF law

Airbnb went to court Monday seeking to block forthcoming amendments to San Francisco law requiring short-term rental companies to police their websites and remove unregistered hosts.

“While we have attempted to work with the City on sensible, lawful alternatives to this flawed new ordinance, we regret that we are forced to now ask a federal court to intervene in this matter,” Airbnb wrote in a blog post. The company’s suit in the U.S. District Court of Northern California seeks an injunction to suspend the new rules, claiming that they violate federal laws, including the Communications Decency Act, the Stored Communications Act and the First Amendment.

The issue of turning homes into hotels has long been contentious in San Francisco, where Airbnb has its headquarters. Critics charge that lucrative vacation rentals siphon off needed housing, while Airbnb and its supporters say that the practice helps regular people make ends meet.

Set to take effect July 27, the amendments to San Francisco’s existing short-term-rental law would make companies like Airbnb, HomeAway/VRBO and FlipKey liable for big fines and criminal penalties if they showcase listings that lack the city’s required registration number. Only about 1,650 out of some 9,000 hosts have registered with San Francisco, despite a requirement that took effect almost 17 months ago.

The Board of Supervisors unanimously passed the amendments in June, making them impervious to a threatened veto by Mayor Ed Lee. The revisions, drafted by Supervisors David Campos and Aaron Peskin, provide several options for companies to comply as a way to help the changes withstand legal challenges. Hosting sites can either enter registration numbers in listings themselves, check that hosts have entered the numbers, or check with the city if listings are registered. But Airbnb found objections to each of the law’s options.

“Airbnb wants to play by their own set of rules,” Campos said. “We’re talking about very modest regulations, but if they’re willing to take this issue to court, it tells me they’re not interested in any government involvement. What they want is to get their own way. No business in this country has that luxury.”

Section 230 of 1996’s Communications Decency Act shields Internet companies from liability for content posted by users on their websites. It covers reviews on Yelp, posts on Facebook and Twitter, and classified ads on a myriad of sites, among others. Airbnb argued that its hosts are solely responsible for the content they create and that the decency act protects it from being forced to verify hosts’ information.

The Stored Communications Act of 1986 creates privacy protections for communications held by third-party Internet service providers. Airbnb said the amendments violate this federal law by requiring it to disclose user information to the city without a subpoena.

Airbnb also claimed the law violates its First Amendment rights. “It is a content-based restriction on advertising rental listings, which is speech,” the lawsuit said. It also could suffer “irreparable” business harm “if it is forced to remove immediately thousands of listings from its website,” the legal filings said.

Matt Dorsey, a spokesman for City Attorney Dennis Herrera, rebutted Airbnb’s arguments. The city’s regulations follow the same principal as requiring online vendors of alcohol and cigarettes to verify customers’ ages so they don’t sell to minors, he said. “It’s simply a duty to verify information that’s already required of a regulated business activity,” he said.

As for the decency act, “Nothing in San Francisco’s ordinance punishes hosting platforms for their user content,” Dorsey said. “ It regulates business activity of the hosting platform itself.”

The federal court ordinarily hears cases 35 days after filing, which mean an Aug. 1 court date, six days after the law is enacted in San Francisco. Airbnb is seeking an accelerated hearing.

Airbnb laid out alternatives for how San Francisco could amend its laws. It wants a one-stop, online process for host registration. Currently hosts must first obtain a business license, then schedule an in-person meeting to submit documents proving they are permanent residents of the house they are turning into a temporary rental.

Airbnb also wants hosts who rent out fewer than 14 nights a year to be exempt from registering, to create a grace period for new hosts to register, and to lift a requirement for business licenses for Airbnb hosts. Finally, it objects to a new policy from the city assessor that asked hosts to inventory all their furniture and other items used for guests, so the city could levy a business property tax.

“We passed the law because we thought it was a reasonable approach to improve enforcement,” said Supervisor Scott Wiener, who added a provision asking city staff to improve the registration process.

San Francisco has already streamlined registration, said Kevin Guy, director of the city’s Office of Short Term Rentals. Business registrations can now can be done online. Appointments for the required in-person meeting with his office can be booked online, and more-flexible times, such as evening hours, have been added.

“We’re trying to take away barriers to access,” he said. “A fair number of the folks who are not registered knew they wouldn’t qualify” under laws that restrict rentals to permanent residents, for instance.

Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid