Last updated: 09:20 PM ET, Sun August 14 2016

Will Airbnb Suffer Significant Blow in New York?

Hotel & Resort | Patrick Clarke | June 21, 2016

Will Airbnb Suffer Significant Blow in New York?

Photo courtesy of Thinkstock.

Airbnb is on the verge of being dealt a significant blow in the state of New York after a bill was recently passed in the New York legislature that would make it illegal for someone to advertise an entire home or apartment for fewer than 30 days.

Aimed at cracking down on what many equate to "illegal hotels," the proposal would fine first-time offenders $1,000. A second violation would cost $5,000 and every violation afterward would result in a fine of $7,500. 

Although the bill doesn't apply to private or shared rooms that are listed on the San Francisco-based home-sharing platform and similar services, it would have a sizable impact considering more than half of New York Airbnb listings (55 percent) were for entire homes and apartments last year, per the New York Post.

Looking ahead, the final step for the bill is to pass through New York State Governor Andrew Cuomo's office, where he can either sign it into law or veto.

READ MORE: Are Airbnb's Discrimination Issues Fueling a Wave of Inclusive Home Sharing?

Unsurprisingly, the issue of cracking down on certain listings has become a polarizing one, with many in the tech industry taking to social media to criticize the bill, including venture capitalist Fred Wilson and actor and investor Ashton Kutcher. 

"It’s disappointing — but not surprising — to see politicians in Albany cut a last-minute deal with the hotel industry that will put 30,000 New Yorkers at greater risk of bankruptcy, eviction or foreclosure," Airbnb Head of New York Public Policy Josh Meltzer said in a statement to TechCrunch. "Let’s be clear: this is a bad proposal that will make it harder for thousands of New Yorkers to pay the bills."

READ MORE: Airbnb Secures $1 Billion Debt Facility from US Banks

"Dozens of governments around the world have demonstrated that there is a sensible way to regulate home sharing and we hope New York will follow their lead and protect the middle class," Meltzer added.

Nonetheless, Manhattan Assembly member Linda Rosenthal — who sponsored the bill — is confident the bill will be passed into law and ultimately protect the state's middle class.

"Airbnb has flouted the laws that protect affordable housing and tenants with impunity for years," Rosenthal said in a statement last week via "This bill, once it's signed into law, will send a strong message that we prioritize hardworking New York families and affordable housing, and will give law enforcement the tools they need to crack down on illegal hotels that destabilize communities and deprive us of precious units of affordable housing."

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