Birdhouse at HomeAway's Austin headquarters, photo courtesy of HomeAway

Birdhouse at HomeAway’s Austin headquarters, photo courtesy of HomeAway

Austin-based HomeAway, the world’s largest online marketplace for vacation rentals, filed a lawsuit Monday against the city and county of San Francisco seeking to stop the city from enforcing a new short term rental law.

HomeAway claims the law discriminates against second home owners and non-resident individuals advertising short-term rentals, and gives Airbnb, based in San Francisco, a competitive advantage.

“In a community known for promoting equality and an entrepreneurial spirit, it is shocking the supervisors passed a law that, in our opinion, stifles opportunity in such a discriminatory manner,” Carl Shepherd, co-founder of HomeAway, said in a news release. “In its apparently single-minded goal to ‘legalize Airbnb’, we claim the Supervisors ignored the benefits of responsibly regulating a well-established industry, and embraced an unconstitutional and unenforceable regulation. As the industry leader, HomeAway feels a duty to fight for the entire short-term rental industry and the rights of all property owners, including the owners of the 1,200 San Francisco properties who advertise on HomeAway.”

The new law is unconstitutional because the law restricts “consumer choice in both how to offer or find a property and requires HomeAway and most of its competitors to overhaul their businesses to comply with a regulation that is almost entirely unenforceable,” Shepherd said. HomeAway also alleges the law allows only San Francisco residents to provide short term rentals. The law is intended to maintain housing stock and provide affordable housing, but HomeAway contends that no evidence exists to show short-term rentals have a negative effect on affordable housing.

“Our goal is to work with the city to amend the law to one that balances the needs of the community with the rights of all people to rent their properties, regardless of who they are, where they choose to live and how they choose to market those properties,” Shepherd said. “We expected any ordinance in San Francisco would be thought-leading public policy, but instead it fails on all counts resulting from a desire to anoint winners and losers, not to create policies that are fair to all.”