Airbnb challenges new law that punishes people renting its homes

New York

AIRBNB Inc is in talks with New York officials about potentially settling a lawsuit the company filed last month against the state and city governments. The company is challenging a new law that punishes people renting their homes. But regardless of the outcome of those talks, many rentals on Airbnb will remain illegal thanks to an older law, and officials must still figure out what to do about it, posing fundamental problems for both the startup and the government.

A federal judge postponed a meeting scheduled for Monday to discuss Airbnb's suit, saying the two sides are talking about a potential resolution. They are set to update the court by the end of the week. The talks are intended to resolve questions about how the law would be enforced, according to sources. A settlement isn't likely to be reached by this week's deadline, said the sources. The suit has its origin in a law signed by Governor Andrew Cuomo on Oct 21, which creates new fines for people who post advertisements on sites such as Airbnb. While many kinds of short-term apartment rentals have been outlawed since New York passed a separate bill in 2010, the government's attempts to enforce the law have been largely unsuccessful.