Testimony of the New York Civil Liberties Union Before The New York City Council Committee on Housing and Buildings regarding A Local Law to Amend the Administrative Code of the City of New York in Relation to The Regulation of Short-Term Residential Rentals 

NYC Council Bill - Int. No. 981-2018

June 26, 2018

The NYCLU, the New York State affiliate of the American Civil Liberties Union, is a not-for-profit, nonpartisan organization with eight offices across the state and over 190,000 members and supporters. The NYCLU defends and promotes the fundamental principles and values embodied in the Bill of Rights, the U.S. Constitution, and the New York Constitution through an integrated program of litigation, legislative advocacy, public education and community organizing.  In the forefront of those efforts has been our work to protect free speech and privacy rights in the online world. The NYCLU represents the interests of technology users in both court cases and in broader policy debates surrounding the application of law in the digital age. The NYCLU actively encourages and challenges industry and government to support free expression, privacy, and openness in the information society.

The New York Civil Liberties Union has a number of concerns about Int. 981, a bill that would provide for the regulation of booking services for short-term residential rentals (“STR”) in New York City. The NYCLU has identified three areas of concern arising from the proposed legislation.  First, Int. 981 mandates reporting of personal information about New Yorkers into quasi-law enforcement databases without any apparent privacy protections.  Second, the Council would better serve the needs of New Yorkers by collecting data relating to STR utilization to guard against tenant hardships and displacements and threats to affordable housing in New York City. Third, it would appear that Int. 981 violates section 230 of the Communications Decency Act.

Privacy Concerns:  Int. 981 Mandates Reporting of Significant Personal Information about New Yorkers into NYC Quasi-Law Enforcement Databases without Any Apparent Privacy Protections

Int. 981 would mandate that Airbnb, VRBO and all other STR booking services, collect and provide significant amounts of information, on a monthly basis, regarding New Yorkers who use the Airbnb, VRBO or any other, STR platform to the New York City Office of Special Enforcement (“OSE”). Significantly, OSE has been reported to utilize sophisticated data-crunching software from Palantir Technologies, Inc. (“Palantir”) in connection with its enforcement efforts against Airbnb. Palantir’s other known past clients include the CIA, ICE, DHS, the FBI, major banks, and the New York City Police Department.   

As has been publicly reported, New York City has enlisted Palantir’s data analysis services in a variety of City agencies. The Palantir initiatives embraced by the Bloomberg administration continued under the de Blasio administration. The de Blasio administration was reported to have acquired 24 “Gotham” server cores and licenses for the Department of Finance in 2014. The City also reportedly acquired licenses to provide OSE inspectors with Palantir’s mobile technology, connecting them to everything the city knows about every place within it. This technology has reportedly already been used to crack down on illegal Airbnb rentals.

With respect to the specific provisions of Int. 981 which mandates the collection and uploading of all STR hosts’ data to OSE, there is simply no consideration afforded to the potential for customer privacy violations. There is also no consideration given to the need for accountability and oversight regarding data collection and retention by either OSE or Palantir. This legislation fails to provide adequate oversight and privacy protections for STR “hosts.” For example, there is no data retention policy.  This creates a likelihood of security breaches regarding information about STR “hosts.” The best practice, which we urge you to incorporate into this proposed legislation, would be to minimize the collection and retention of this private information by STR platforms, and OSE, to what is operationally necessary and to set a fixed retention period that is tied to operational needs.  

The bill also fails to address the potential use, or abuse, of both STR booking services’ and OSE’s technologies to engage in unwarranted surveillance of individuals who participate on any STR platform. This proposed legislation fails to provide any assurance to STR “hosts” that they will be notified of any government requests for information. Notice is crucial for providing users with the opportunity to argue against the reasonableness of such requests and for ensuring that courts are ultimately deciding the validity of government information requests, especially overbroad requests that infringe on Fourth Amendment rights. The proposed legislation should at minimum assure STR “hosts” that if there is a government request for information they will be provided notice through the email address that they provided during registration or through any other personally identifiable information in an STR’s or OSE’s possession, unless there is a lawful judicial order barring the STR booking service or OSE from doing so and, if there is such an order, the notice should be given as soon as the order is lifted. 

Other than what can be gleaned through publicly available documents, the various data-crunching technologies offered by Palantir, IBM and other vendors as fully utilized in New York City by City agencies is entirely shrouded in secrecy. Before the Council takes any action to mandate the turnover of personally identifying information of any New York City resident who participates on the STR services platform offered by Airbnb, VRBO or any other “booking service” to OSE’s data-crunching platform, the Council might better engage in intensive fact-finding and oversight to better understand the City’s complex relationships with Palantir and other data crunching technology vendors operating under contract with New York City agencies so as to best ensure the privacy rights of all New Yorkers.

Data Collection relating to STR Utilization to Guard against Tenant Hardships and Displacements  

As an alternative to the data collection proposed by Intro. 981, the NYCLU suggests that certain targeted, and anonymized, data sharing from Airbnb, VRBO and other STR booking services’ platforms, could be useful to the Council, as well as to other City policymakers and economic justice advocates, including tenants’ rights groups and fair and affordable housing advocates.  

The NYCLU would support the mandated collection, and analysis, of anonymized data, with STR platform utilization stripped of personally identifying information and address resolution decreased to census tracts or street blocks. This data collection and analysis would ensure the accurate assessment of, and informed response by the City to, research indicating that STRs are disrupting communities, threatening affordable housing and facilitating rapid gentrification and displacement of long-time residents from many neighborhoods.  

For example, a recently issued report from McGill University Urban Planning professor David Wachsmuth provides a thought-provoking analysis of Airbnb activity in New York City and the surrounding region in the past three years.  Wachsmuth and his team performed a spatial analysis on three years of Airbnb activity in New York City in order to measure how new capital flows into the short-term rental market, to identify neighborhoods whose housing markets have already been significantly impacted by short-term rentals, to identify neighborhoods which are increasingly under threat of Airbnb-induced gentrification and, finally, to measure the amount of rental housing lost to Airbnb. The authors present both a useful framework for analyzing the relationship between short-term rentals and gentrification by way of an exploratory case study of New York City as well as an agenda for future research on gentrification and the sharing economy.  As a matter of economic justice, the Council should formulate responses to the affordable housing disruptions documented in the McGill study and in other recent studies, including the 2016 study commissioned by MFY Legal Services Inc.

First Amendment Considerations: Violation of Section 230 of the Communications Decency Act

We note that Int. 981 sweeps quite broadly in obligating any “booking service” to upload transaction reports to OSE on a monthly basis relating to, among other things, listings or advertisements relating to STRs offered by individuals utilizing the STR platform.  Int. 981 defines “booking service” in such a way as to capture within its purview not only STR services offered by Airbnb and VRBO, but also any entity that “provides to another person an online, computer or application-based, platform through which such other person may offer the rental of a dwelling unit or part thereof or of housing accommodations within a dwelling unit for occupancy of fewer than 30 consecutive days.” It is difficult to discern whether this is a drafting error or is intended intentionally to bring all online classified ad purveyors such as the newspapers that serve the very diverse populations of New York City into the monthly OSE reporting regimen set forth in Int. 981.  

However broad its scope, Int. 981 imposes civil penalties on the “booking service” for any violations that may be committed by the STR platform users in connection with their “listings or advertisements.”  This provision of Int. 981 appears to violate section 230 of the Communications Decency Act of 1996 (the “CDA”), 47 U.S.C. § 230. Section 230(c)(1) provides what has been referred to as “intermediary immunity” from liability for providers and users of any "interactive computer service" who publish information provided by third-party users.  Section 230 immunity empowers intermediaries to resist being enlisted as extensions of local law enforcement as Int. 981 would do.  The Council ought to conduct additional inquiry into the apparent conflict between Int. 981 and section 230 of the CDA. 

Conclusion

Accordingly, the NYCLU urges the Council to reconsider Int. 981.

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