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Case Introduces Measure to Allow Full Enforcement of State and Local Laws Targeting Illegal Short-Term Rentals

Would confirm that internet platforms like AirBnB can be held liable for advertising such rentals

(Honolulu, HI) – U.S. Congressman Ed Case (Hawai‘i – District 1)  introduced on Friday H.R. 4232, a measure to confirm that Internet platforms who knowingly market illegal short-term vacation rentals can be held liable under state and local law. 

His “Protecting Local Authority and Neighborhoods” (PLAN) Act would end abusive litigation by Internet-based short-term rental platforms like AirBnb, HomeAway, VRBO, Flipkey, and others attempting to avoid accountability for profiting from illegal rentals.

“Over the past decade-plus, the short-term vacation rental industry has exploded through these platforms,” said Case.

“While some communities welcome these rentals, which is largely conducted in residential neighborhoods, many others are concerned with several negative consequences.”

“These consequences include the loss of affordable housing as residential units are converted to transient accommodations for tourists,” said Case. “And many of the owners and operators of these units are failing to comply with basic consumer safety, public accommodations and tax requirements that the legal lodging industry has had to follow in order to do conduct its business.”

“As a result of these negative impacts, states and local governments from Hawai‘i to Maine are updating their land use laws to  more tightly regulate short-term rental activity including liability for the platforms, which has triggered lawsuits to challenge these regulations by the online platforms who advertise these short-term rentals.”  Case noted lawsuits that have been filed in a number of jurisdictions including New York City, Boston, Miami, Portland in Oregon, Anaheim, San Francisco, Chicago, Miami Beach, Palm Beach and Santa Monica.

Case said the PLAN Act would amend federal law to make clear that this statute does not shield Internet-based platforms that facilitate bookings of  illegal short-term rentals.  Currently, these platforms claim that Section 230 of the federal Communications Decency Act preempts local efforts to stop them from listing and booking illegal rentals. 

“Platforms would also be held accountable if they fail to stop booking illegal rentals after receiving notice from a private property owner that short-term rentals are prohibited at that location,” said Case.

The Hawai‘i Chapter of the American Hotel & Lodging Association released a statement in support. Hawai‘i Chapter spokesman Kekoa McClellan said “The PLAN Act will put a stop to the litany of lawsuits filed by hosting platforms who use the courts to shield the brokering of illegal short-term rentals in residential communities across Hawai‘i.”

“These illegal short-term rental operators have no aloha for our way of life, take jobs away from locals, and drive up the cost of housing for all of us who actually call Hawai‘i home,” said McClellan. “We stand with Congressman Case in his fight to protect our neighborhoods, and communities across the country from the explosion of these illegal rentals through the introduction of the PLAN Act.”

The Hawai‘i Chapter of the AHLA counts 150 members, along with 110,000 employees of members throughout the state. McClellan says other Hawai‘i organizations and individuals join in the statement from the Hawai‘i Chapter of the AHLA including Save O‘ahu’s Neighborhoods, Hawai‘i Good Neighbor and the Kuli‘ou‘ou – Kalani Iki Neighborhood Board.

The national organization of the AHLA also released a statement in support. “For too long, these Big Tech short-term rental platforms have been hiding behind this antiquated law in order to bully and threaten legal action against local elected officials who are simply trying to protect their residents from illegal rentals that are destroying neighborhoods and access to affordable housing,” said Chip Rogers, President and CEO of the national American Hotel & Lodging Association. “These Big Tech rental platforms are invoking a loophole in a federal law to snub their noses at local government leaders across the country, while continuing to profit from illegal business transactions.”

Rogers continues “From an industry perspective, we simply want platforms like Airbnb and HomeAway to abide by the same laws that the hotel industry adheres to, as well as every other law-abiding business, from main street in small towns to central business districts in major cities. Congress should not allow Big Tech rental platforms to operate above the law. We applaud Congressman Case and his bipartisan legislation which will make clear that unlawful short-term rentals and illegal business transactions are not protected under federal law.”

The Asian American Hoteliers Association (AAHOA) also issued a statement in support of the measure.

"America's hoteliers support Rep. Case's effort to empower state and local governments and their ability to regulate short-term rentals,” said Rachel Humphrey, President and CEO of the AAHOA. “This legislation clarifies Section 230 of the Communications Decency Act (CDA) to prevent the short-term rental industry's willful violations of state and local regulations thoughtfully crafted by lawmakers to protect their communities.” Humphrey goes on to say that “Section 230 is intended to protect bloggers and similar website hosts from liability for objectionable third-party generated content posted to their sites, not multi-billion-dollar corporations that profit from the illicit rentals that their online platforms facilitate. Competition thrives on a level playing field, and AAHOA's members are grateful to Congressman Case for standing up for small businesses with this legislation."

From Maui, County Councilmember Tamara Paltin also weighed in, saying “Online platforms allowing illegal vacation rentals have negatively affected our neighborhoods and communities. Maui County’s residents want the issue to be resolved, and this legislation is a good step in the right direction by protecting and preserving home rule for local municipalities.”

NOTE: Serving the hospitality industry for more than a century, the American Hotel & Lodging Association (AHLA) is the largest national association solely representing all segments of the eight million jobs the U.S. lodging industry supports, including brands, hotel owners, REITs, chains, franchisees, management companies, independent properties, bed and breakfasts, state hotel associations and industry suppliers. Headquartered in Washington, D.C., AHLA proudly represents a dynamic hotel industry of more than 54,000 properties that supports $1.1 trillion in U.S. sales and generates nearly $170 billion in taxes to local, state and federal governments.

NOTE: AAHOA is the largest hotel owners association in the world. The over 18,500 AAHOA members own almost one in every two hotels in the United States. With billions of dollars in property assets and hundreds of thousands of employees, AAHOA members are core economic contributors in virtually every community. AAHOA is a proud defender of free enterprise and the foremost current-day example of realizing the American Dream