A federal judge has temporarily blocked the City of Boston from enacting two provisions of a short-term rental ordinance passed last summer but is allowing officials to proceed with a third element of the act regulating the growing online market for lodgings in private homes.
US District Judge Leo T. Sorokin, ruling Friday on a motion in a lawsuit filed by San Francisco-based Airbnb last November, declared that Boston can’t eject a short-term rental service from the city as punishment for posting and failing to remove listings that violate the ordinance.
Sorokin, who heard arguments April 8 on the motion, also ruled that Boston can’t require short-term rental services to report to the city how many days each month a rental is occupied. He wrote that “Airbnb would be irreparably harmed by having to comply with an unconstitutional requirement that it disclose private business information.”
The judge rebuffed Airbnb, though, in declining to block Boston from imposing a $300-per-day fine any time a rental service accepts a fee for booking an ineligible unit. Similar ordinances in San Francisco and Santa Monica, Calif., have “survived nearly identical legal challenges,” Sorokin noted.
In March, a three-judge panel of the Ninth Circuit Court of Appeals upheld the Santa Monica law making short-term rental companies liable for illicit rentals.
Sorokin batted away assertions from Airbnb that it would be penalized for publishing content generated by users, which the company claimed would violate the First Amendment and a 23-year-old federal law that protects website providers from being held responsible for material that third parties publish on their sites.
In a statement Saturday, Airbnb applauded Sorokin’s ruling.
“We appreciate the Court’s decision and its recognition of the protections afforded by established federal law as to platform immunity and privacy,” the statement said. “We hope to continue working with the City to find a path forward for home sharing and for our community here in Boston.”
A spokeswoman for Mayor Martin J. Walsh had no comment on the ruling.
City Councilor Michelle Wu, one of the chief architects of the short-term rental rules, said in a statement that Sorokin’s ruling allowing the city to fine rental services was “a big win for Boston residents and all municipalities looking to protect their residential housing stock.”
She said Sorokin’s ruling “sets an important precedent as other cities around the country look to pass short-term rental regulations and face the threat of litigation from Airbnb.”
City officials said Saturday that as Airbnb’s lawsuit has played out in court, they have proceeded with implementing the elements of the ordinance that are not at issue in the case. The city had filed an agreement with Airbnb in November stipulating that it wouldn’t enforce the disputed elements of the ordinance until a judge had ruled on them.
Airbnb and its competitors, such as HomeAway and VRBO, will face further challenges this summer, when a statewide law regulating and taxing short-term rentals takes effect July 1.
That law, signed by Governor Charlie Baker late last year, requires every rental host to register with the state, mandates they carry insurance, and opens the potential for local taxes on top of the new state levy.
Last month, Plymouth became one of the first local municipalities to impose its own local tax under the new law, voting at Town Meeting to enact a 3 percent community impact fee on short-term rentals. That tax is also set to kick in on July 1.
Airbnb has called the statewide legislation “flawed” and unnecessarily complex.
The company has fought regulations in cities across the globe, including Paris and New York, where another federal judge blocked an element of a local ordinance that would have forced short-term rental businesses to share what he called a “breathtaking” amount of propriety information.