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The Real Deal Los Angeles

Santa Monica prevails over Airbnb in court

A U.S. District Court judge said the city's restrictive home-sharing ordinance is legal
June 18, 2018 02:30PM

Santa Monica Pier and Airbnb CEO Brian Chesky

The City of Santa Monica won a big victory in U.S. District Court on Thursday over persistent adversary Airbnb.

Judge Otis D. Wright II dismissed Airbnb’s challenge to Santa Monica’s home-sharing ordinance and ruled that the platform must verify its hosts are registered with the city, according to the Santa Monica Daily Press.

Airbnb claimed the ordinance violated the First and Fourth amendments, the federal Communications Decency Act, and the California Coastal Act.

Wright decided that the ordinance was not directed at Airbnb’s publishing of listings, but was aimed at stopping illegal business transactions. The decision was consistent with previous court rulings related to Airbnb’s activities in San Francisco, according to the Daily Press.

Airbnb issued a statement on Monday saying the company would continue to pursue a pending appeal. “For more than two years,  Airbnb sought to work with the City of Santa Monica on a solution that ensures middle and lower class families who want to visit the coast can find an affordable place to stay. Despite our efforts, the city insisted on an approach that violates federal law” the statement said. 

Santa Monica has some of the strictest rules against short-term rentals of any city in L.A. County. It passed its home-sharing ordinance in 2015, and Airbnb sued in 2016. Besides requiring host registration, it bars hosts from renting out their homes when they aren’t present. Wright’s ruling crosses out one more option for the popular platform.

The Communications Decency Act has come up in a number of court cases involving home-sharing. The 1996 law is meant to protect online businesses from any illegal conduct of users.

A different U.S. District Court judge, Dolly M. Gee, ruled in Airbnb’s favor in January in a case against Aimco, a Denver real estate-investment trust. Aimco wanted Airbnb held liable for short-term rentals listed at its Park La Brea property, which it forbade. Airbnb claimed protections under the Communications Decency Act and Gee ultimately ruled in the company’s favor, arguing it was up to a tenant to ensure they are not violating a lease.

Santa Monica officials claim that less than 20 percent of short-term rentals in the city comply with the ordinance and that hosts have come up with creative ways to skirt it, like taking down listings during City Hall hours to hide them from employees.

Santa Monica separately announced on Monday that real estate agent Shabi Jafri pleaded no contest against five misdemeanor counts for renting nine units in the city without permits. Jafri must perform 140 hours of community service, pay the city $3,600, and was placed on two years of probation.
[Santa Monica Daily Press] – Dennis Lynch