SAN FRANCISCO (Reuters) - The city of San Francisco sued two landlords on Wednesday for allegedly evicting tenants to rent out rooms on such websites as Airbnb, opening a new front in a controversy over increasingly popular home-rental services.
In separate lawsuits filed by City Attorney Dennis Herrera, the city named two groups of defendants that it called the “most egregious” offenders because they evicted disabled tenants before listing rooms online for as much as $595 a night.
The lawsuits have come amidst a broader crackdown on illegal rentals in San Francisco, where the rental services, which also include Homeaway.com and VRBO.com, have been blamed for pushing up housing prices because they remove rooms from the rental market.
Sites like Airbnb, which help landlords list rooms and take a cut of the payments, have operated in a legal gray area in many U.S. markets - and sometimes outright illegally in cities including San Francisco, which outlaws rentals for less than 30 days.
The services have been under scrutiny elsewhere in the United States, including in New York state, where Attorney General Eric Schneiderman has issued a subpoena for a list of Airbnb hosts in New York City, which also prohibits short-term apartment rentals. The company has refused to divulge its hosts and is now battling the subpoena in court.
The company, which has been pushing legislation in San Francisco to legalize its business, swiftly banned the landlords from its service on Wednesday and applauded Herrera’s lawsuits in a statement.
“We wholeheartedly support efforts to bring those landlords to justice,” the company said, while maintaining that “a small number of predatory landlords are abusing platforms like ours.”
Although San Francisco has long prosecuted landlords for illegal rentals or hotel conversions, a city spokesman said Wednesday’s lawsuits were the first of their kind in the “age of Airbnb.”
San Francisco Mayor Ed Lee, who has deep ties to the city’s flourishing tech industry, has been a political champion for Airbnb, a stance that has pitted him against other officials and housing activist groups.
Separately on Wednesday, the San Francisco Tenants Union said it had begun a process with city regulators to sue seven other landlords on similar charges.
“The city attorney pursuing two landlords will definitely send a message, but pursuing seven is going to send an even better message,” said Joseph Tobener, a lawyer for the union.
Despite its uncertain legal status, Airbnb recently closed a $475 million round of financing that valued it at $10 billion, according to media reports.
Editing by Matthew Lewis