SAN FRANCISCO (AP) — A federal judge expressed skepticism Thursday that a San Francisco ordinance setting fines for short-term rental websites that process bookings for unregistered units violates federal law.
The ordinance does not prevent companies such as Airbnb from listing ads for units that are not registered with the city, U.S. District Court Judge James Donato said. He said it only penalizes the booking of those places through the companies.
Donato made the comments during a hearing on Airbnb's request for an injunction blocking enforcement of the law. He did not immediately issue a ruling.
San Francisco-based Airbnb is the world's largest short-stay online rental company.
Critics have long complained that its business model encourages landlords to take already scarce rentals off the market.
Airbnb supporters say they couldn't continue to live in San Francisco without the extra money they make renting out space.
The ordinance passed earlier this year carries fines up to $1,000 per violation and possible criminal prosecution.
San Francisco allows short-term rentals but requires hosts to register with the city and limit the length of stays.
The city says the vast majority of San Francisco listings on Airbnb are unregistered.
Airbnb lawyer Jonathan Blavin said the ordinance would force Airbnb to screen and remove listings because the company would not want listings for units that could not legally be booked.
Airbnb has argued that role would violate a 1996 federal law that prohibits internet companies from being held responsible for content posted by users.
"The practical effect of the ordinance is that it will require Airbnb to screen and remove listings, including ones that are potentially lawful," Blavin said.
Donato also questioned how the city could ensure Airbnb and similar sites could quickly check whether a unit was registered before processing the booking.
"You hold all the information about who is legally registered," he told an attorney for the city. "What are you going to do to make that totally transparent for these companies, so they don't get criminally prosecuted."