HomeAway sues San Francisco over short-term rental law

Reuters News
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Posted: Nov 03, 2014 3:14 PM

By Daniel Wallis

(Reuters) - Vacation rentals website HomeAway Inc sued San Francisco on Monday seeking an injunction to stop the city from enforcing new rules passed last month that the firm says are discriminatory and hand control of the market to local competitor Airbnb.

San Francisco had previously sued landlords for evicting tenants in order to rent out rooms via increasingly popular websites such as Airbnb and HomeAway, which both promote themselves as offering reasonably priced accommodations in nearly 200 countries while letting hosts earn extra income.

But last month the city changed its rules for some rentals in a move that Austin, Texas-based HomeAway said was part of a "single-minded goal to legalize" San Francisco-based Airbnb.

HomeAway said the law, which among other things requires subletters to prove they live in their homes nine months of the year, violates the U.S. Constitution's interstate commerce clause and discriminates against non-resident firms and individuals that advertise short-term rentals.

"HomeAway feels a duty to fight for the entire short-term rental industry and the rights of all property owners, including the owners of the 1,200 San Francisco properties who advertise on HomeAway," co-founder Carl Shepherd said in a statement.

An Airbnb spokesman said the company was focused on fair rules which allow regular people to share the home in which they live. "If other companies feel differently, that's up to them," said the spokesman, Nick Papas, in response to the lawsuit.

The San Francisco Board of Supervisors did not immediately respond to a message seeking comment.

The issue of who has control over short-term rentals is particularly sensitive in San Francisco, where a booming local economy led by the high-tech industry has forced up housing costs.

The city's mayor, Ed Lee, has close ties to the tech industry and has been a political champion for Airbnb, a stance that has pitted him against other officials and housing activist groups.

The short-term home-rental websites, which help landlords list rooms and take a cut of the payments, operate in a legal gray area in many U.S. markets. San Francisco, for example, had previously outlawed rentals lasting fewer than 30 days.

New York state's attorney general said last month that most New York City listings of private homes for rent on Airbnb violate state zoning and sublet laws.

(Reporting by Daniel Wallis in Denver; Editing by Eric Beech)