Wednesday’s ruling by a 3-judge panel of the 9th Circuit Court of Appeals is a setback for the home-sharing platforms in their effort to avoid regulation by cities. Cities blame the rapid proliferation of short-term rentals for a shortage of affordable housing & disintegration of residential communities.
The Santa Monica ordinance holds home sharing companies are legally responsible for the booking of rentals residences not licensed by the city. Editor’s Note and “in plain English”: In the past home-sharing companies have sought to claim immunity from prosecution for violations of city ordinances restricting home-sharing. Instead they shrugged their shoulders & tried to pass responsibility to the home owners.
That’s appears to be about to change – particularly in California which is in the 9th Circuit Court of Appeal’s jurisdiction. The court agreed with the city that the restriction doesn’t violate the U.S. Communications Decency Act of 1996, which shields online services from liability for the content that their users post on their sites.
In January, Airbnb and other short-term-rental sites won a ruling granting a temporary reprieve from a New York City law that compels them to turn over renter data, a requirement threatening to cut bookings in the city by half. Airbnb is also fighting in Paris, where it faces as much as $14 million in fines for allegedly posting illegal advertisements.
The courts’ interpretation of the 1996 law and the protection it affords”interactive online businesses” have become a central theme in legal challenges to Airbnb and its rivals. Federal judges in Los Angeles and San Francisco have found that cities can hold the companies liable for processing transactions, as opposed to simply listing information from users.
Airbnb and HomeAway argued the Santa Monica ordinance makes it impossible for them to operate, particularly if other municipalities adopt similar laws, because it would require them to monitor and remove listings for unregistered residences. If they don’t, users would be stuck looking at listings that they won’t be able to book, according to the companies.
The 9th Circuit panel concluded that Santa Monica’s statute puts only an“incidental” burden on the companies’ constitutional right to free speech. “Even assuming that the ordinance would lead the platforms to voluntarily remove some advertisements for lawful rentals, there would not be a ‘severe limitation on the public’s access’ to lawful advertisements.
Santa Monica said in a statement “the unanimous ruling confirms the city’s right to regulate home sharing to protect its limited housing stock for residents”. “This is a big win for Santa Monica residents and our residential neighborhoods.”
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