The law, which passed last year and was slated to take effect in February, was intended to rein in what authorities have said are thousands of illegal short-term rentals that contribute to a housing shortage.
The new regulation required hosting sites like Airbnb to provide city enforcement officers with a monthly report listing precise details on every short-term rental in New York City. The first reports were due in March.
But on Thursday, Judge Paul A. Engelmayer, of federal district court in Manhattan, found that the city’s new rules violated constitutional protections against illegal searches.
He said the law was overly broad, essentially requiring Airbnb and other companies to hand over most of the data in their computer systems. In addition, Judge Engelmayer said the law didn’t provide a framework for listing companies or hosts to challenge the data requests. His decision imposed a preliminary injunction against the new rule, pending further fact-finding.
The judge’s ruling is at least a temporary victory for Airbnb and other home-sharing companies, which have criticized the law as trampling on the rights of hosts and alleged it was an effort to protect the hotel industry.
“The decision today is a huge win for Airbnb and its users, including the thousands of New Yorkers at risk of illegal surveillance who use Airbnb to help make ends meet,” a spokeswoman for Airbnb said.
Airbnb is planning an initial public offering and has committed to being ready for it by July 1, 2019.
In New York City it is illegal to rent an entire apartment in a building with three or more units for fewer than 30 days. But the city’s enforcement efforts have been largely complaint driven, where inspectors respond to individual complaints filed neighbors or condo boards against illegal rentals.
The new law would have allowed the city to get information on the actual address of a rental and the identity of the host, and pursue potential violators automatically.
The decision means the city’s efforts to step up enforcement may be delayed, while Airbnb and other listing sites continue to benefit from rentals in New York City.
“We felt we were well within the law,” Mayor Bill de Blasio said, of lawmakers who crafted the legislation, adding that his administration would continue to fight for it.
“This is a law to stop landlords from creating de facto hotels, which is unfair and illegal, [and] which creates real security problems for neighbors,” the mayor said.
The decision came down in two consolidate lawsuits, one filed by home-sharing platform Airbnb and the second by a competitor, HomeAway Inc.
In the ruling, Judge Engelmayer noted that the city has issued a total of 10 subpoenas to Airbnb to identify hosts, addresses and other details about listing, and five subpoenas to HomeAway.
He said the hosts had historically complied with subpoenas and that the city could continue its current investigative methods.
“The city retains its existing investigative tools such as subpoenas, and is at liberty to enhance the resources dedicated to this area if it determines that such serves the public interest,” he said.