Last month, the federal Ninth Circuit Court of Appeals affirmed a district court’s denial of a preliminary injunction in a case initiated by HomeAway and Airbnb challenging the City of Santa Monica, California’s short-term rental regulations. The plaintiffs in the case alleged violations of the First Amendment right to freedom of association.
Located on the Pacific coast and known as a tourist destination, by early 2018, Santa Monica had nearly 2,000 Airbnb or HomeAway listings—in a city of just 90,000 residents. In response to the various problems created by short-term rentals, the city council passed an ordinance limiting short-term rentals to only “home-shares,” where the resident of the unit is present during the rental period. Santa Monica also collects taxes on short-term rentals, requires licenses, and imposes disclosure obligations on hosts. HomeAway and Airbnb filed a variety of challenges to the ordinance, and moved for a preliminary injunction, which was denied by the district court.