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Transient Rental Ban Does Not Violate Fair Housing Act
In a recent decision, the Eastern District of New York dismissed a multi-pronged challenge to a local municipal ordinance that regulates rental of property on a short-term or transient basis. See, LuxuryBeachfrontGetaway.Com, Inc. v Town of Riverhead, 2018 WL 3617947 (E.D.N.Y. July 27, 2018). Specifically at issue was §263-4(D)(1) of the Town Code of the Town of Riverhead, which provides that transient rentals are prohibited (with “transient” being specifically defined as a rental period of 29 days or less). Such regulation of short-term rentals is not unique to Riverhead, as governments have increasingly been called upon to respond to the impacts of emerging rental markets in the new landscape of our “sharing economy.” Several neighboring municipalities, the Towns of Southampton, Southold, and Shelter Island, have similar temporal restrictions, while others limit the amount of times per year that a property may be rented on a short-term basis or impose registry requirements on owners of such properties. Similarly, Section 4 of the New York State Multiple Dwelling Law, colloquially referred to as the “Airbnb Law,” prohibits even the mere advertisement of certain classifications of property for short-term rental purposes (less than 30 days).
Plaintiffs are the owners of a company and website in the business of renting out and managing certain residential properties, or “luxury beachfront getaways” according to the website's domain, located in the Town of Riverhead. The Complaint comments that the renting of beachfront and vacation properties on a short-term basis is a “ubiquitous practice” in the United States, and specifically offers HomeAway, Airbnb, VRBO, and TripAdvisor as examples of the recent proliferation of internet sites facilitating such rentals. Plaintiffs claim that they are aggrieved by the provision of the Town Code, enacted in 2013, which prohibits short-term rentals.
The plaintiffs argue that the ordinance violates the Fair Housing Act, asserting both disparate treatment of and disparate impact upon families with children, a “protected class” under the 1988 Amendments to the Fair Housing Act. In order to attempt to bring the claim within the purview of the FHA, the complaint makes the curious assertion that the Town's prohibition of short-term rentals “makes it all but impossible for the vast majority of families with children to rent a residential Riverhead house in order to enjoy a family vacation.” The action further claims that the ordinance is unconstitutional under the void-for-vagueness doctrine.
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