Airbnb Hosts Fight for Right to Rent

     AUSTIN, Texas (CN) — Homeowners across the nation are fighting back against cities’ attempts to stop them from renting out their homes for short stays, through websites such as Airbnb and HomeAway.
     Los Angeles last week sued the owners of three rent-controlled apartment buildings, claiming they illegally evicted tenants to try to make more money through short-term rentals.
     Even as Los Angeles City Attorney Mike Feuer filed his cases Friday, homeowners in Austin, Texas sued the city on constitutional claims, challenging a law that makes it more difficult for them to rent their houses. The Austin homeowners say the new city ordinance is “carpet bombing” their constitutional rights.
     And on Monday in Los Angeles, a federal class action made similar arguments against the City of Santa Monica.
     Los Angeles’ lawsuits differ from the ones involving Austin and Santa Monica, as Feuer is going after landlords of multi-unit housing, not private homeowners, but all the cases stem from the rapid growth of Internet ad sites for short-term rentals.
     The Santa Monica class action, from lead plaintiff Arlene Rosenblatt, cites both websites as ways for homeowners to make money, and claims a city ordinance that attempts to ban short term rentals is an unconstitutional restraint of interstate commerce, an unconstitutional taking, and de facto condemnation.
     The City Council approved the ordinance on May 12, 2015 and it took effect on June 15 that year. (Santa Monica Municipal Code Section 6.20.010 et seq.)
     Rosenblatt says Santa Monica enacted the ordinance to pad city coffers: specifically, to protect the 14 percent transient occupancy tax it collects on hotel and motel rooms.
     She claims that Santa Monica’s 3,483 rooms in its 34 hotels are inadequate for the city’s tourism industry and the shortage drives up prices at Santa Monica’s already overpriced hotels, many of which start at $500 a night.
     In June 2015, when the city enacted the ordinance, the occupancy rate at Santa Monica hotels was 86.2 percent, compared to a nationwide occupancy rate of 65.6 percent, according to the complaint.
     To top it off, she says, the median rent for a one-bedroom apartment in Santa Monica in January was $3,490, making homeownership a valuable asset for anyone with a room to spare.
     “The ordinance not only prohibits engaging in transactions for short-term rentals, but also prohibits utilizing the Internet, the interstate marketplace for short-term rentals, or any other forum to list, facilitate, or advertise short-term rentals,” Rosenblatt says in the complaint, though she does not specifically allege a First Amendment claim.
     She seeks class certification, declaratory judgment, an injunction and punitive damages.
     She is represented by Jordan Esensten, of Los Angeles.
     Meanwhile in Austin, Ahmad Zaatari et al. sued the city and its Mayor Steve Adler in Travis County Court. All seven plaintiffs rent their homes for short terms. Six of them have a Type 2 city license, one has a Type 1 license.
     Type 1 and 1A licenses are for are owner-occupied residential rentals. Type 2 licenses are for residential rentals in which the owners do not claim the property as their homestead. Type 3 rentals are for a multifamily complex.
     Zaatari says that 55 percent of Austin residents rent their homes, with the high cost of homeownership a major reason for this. Austin home values have increased by more than 78 percent in the past 15 years, and property taxes have risen accordingly.
     “Many Austin property owners — including plaintiffs — rent out their homes on a short-term basis to afford the increasing cost of living in Austin due to the economics that short-term rentals generate more revenue than long-term rental use of the same property,” the complaint states.
     Zaatari’s lawsuit takes aim at the ordinance governing Type 2 rentals, as amended on Feb. 23 this year. He claims it violates the Texas Constitution’s guarantees of privacy, assembly, due process and equal protection, and authorizes unconstitutional searches and seizures.
     “The STR [short-term rental] Ordinance prohibits short-term rentals in previously permitted residential areas, phases out existing, lawfully operating short-term rental properties, restricts the number of people allowed to step foot on any short-term rental property, dictates the movement and association of ‘assemblies’ in short-term rentals, and sets a bedtime for tenants. The City cannot carpet bomb the constitutional rights of short-term rental owners and lessees under the auspices of zoning or code enforcement,” the complaint states.
     Among other things, the ordinance prohibits more than 10 related adults, or six unrelated adults, from using a short-term rental at one time — regardless of the square footage or capacity. It also prohibits more than two adults per bedroom plus two additional adults present in a short-term rental between 10 p.m. and 7 a.m., according to the complaint. “These arbitrary caps are in addition to any caps in place for fire and safety purposes and have no rational connection to the public health, safety, or welfare,” the homeowners say.
     The ordinance also requires short-term rental owners and tenants to allow officers to “enter, examine, and survey, at all reasonable times, all buildings, dwelling units, guest rooms, and premises” for the purpose of inspection.
     “Such home inspections do not require a warrant, exigent circumstances, pre-compliance review, or probable cause,” the complaint states, though the U.S. Supreme Court last year struck down a similar Los Angeles ordinance, authorizing warrantless “on demand” hotel searches.
     Austin can levy fines of up to $2,000 per day for violations of the ordinance and can suspend a license for two or more substantiated violations. Property owners share responsibility for their tenants’ violations.
     The complaint says there have been few complaints about short-term rentals in Austin.
     “Since the initiation of short-term rental licensing regulations in October 2012, the City has issued 0 citations issued for noise, occupancy, trash or other violations of the Austin Municipal Code that are documented to have stemmed from a licensed short-term rental …
     “Of the complaints against licensed STR units, owner-occupied, Type 1 rental units triggered the greatest number of reports — both in absolute and percentage terms …
     “Furthermore, this small number of complaints has not led to even one occupancy, noise, or ‘presence’ restriction prosecution,” the plaintiffs say.
     They seek declaratory judgment that the ordinance violates their constitutional rights, and an injunction preventing Austin from enforcing it.
     Their lead attorney is Robert Henneke, with the Texas Public Policy Foundation.
     Some critics claim short-term rentals can destabilize neighborhoods. Henneke denied it.
     “There is no evidence to support the claim that short-term rentals diminish the availability of affordable housing,” he said. “This ordinance … violates the fundamental constitutional rights of owners and renters who use short-term rentals.
     “Policy made to address hypothetical situations is bad policy. A subjective desire to know the personal details of one’s neighbors does not justify the city’s arbitrary restrictions on property rights, setting a bedtime for adults, or doing away with the privacy protections enshrined in the Constitution. This really is an example of the City using a nuclear bomb to address concerns that could be handled with a fly swatter.”
     A spokesman for Austin said: “The Austin City Council spent many hours working through the significant issues related to short-term rentals in the city, in order to best serve all citizens. The city’s lawyers are prepared to defend the ordinance in court.”

%d bloggers like this: