CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1497

Author:(Holden)

As Amended Ver:August 28, 2019

Majority vote

SUMMARY:

Adds housing offered on a hosting platform to the definition of housing accommodation in the Fair Employment and Housing Act.

The Senate Amendments:

1. Add language stating that it is the intent of the Legislature that this act:
   1. Will not affect the permissibility, classification, or local regulation of the use of residential structures for short-term rentals or other transient occupancy, pursuant to a transaction facilitated by a hosting platform or other method; and
   2. Does not imply that short-term rentals on hosting platforms should be considered permanent housing.
2. Incorporate changes proposed by SB 222 (Hill) of the current legislative session, amending the definition of "source of income" to include federal Department of Housing and Urban Development Veterans Affairs Supportive Housing voucher.
3. Incorporate changes proposed by SB 329 (Mitchell) of the current legislative session, amending the definition of "source of income" to include public subsidies, including housing assistance vouchers issued under Section 8 of the United States Housing Act of 1937.
4. Specify that this portions of this bill become operative only if this bill and SB 222 or SB 329 are enacted and this bill is enacted last.

COMMENTS:

Over the past 25 years, the development and growth of the internet has substantially increased access to information while decreasing transaction costs. This has facilitated the growth of the sharing economy in a wide variety of markets, including ride sharing, crowdfunded financing, and home sharing services. Home sharing services using online hosting platforms, such as Booking.com, AirBnB, and VRBO, have seen explosive growth over the past 10 years, and now include over 15 million listings worldwide, existing in almost every city and county.

Existing law, the California Fair Employment and Housing Act, prohibits an owner of housing from engaging in specific acts of discrimination against a person seeking to purchase, rent, or lease any housing accommodation. The Department of Fair Employment and Housing (DFEH) is responsible for enforcing this and other state fair housing laws that make it illegal to discriminate in all aspects of the housing business, including renting or leasing, sales, mortgage lending and insurance, advertising, practices such as restrictive covenants, and new construction. The law applies to landlords, real estate agents, home sellers, builders, mortgage lenders, and others. The law protects individuals from illegal discrimination by housing providers based on the following: age, race, color, ancestry, national origin, religion, mental or physical disability, sex, gender, sexual orientation, gender identity, gender expression, genetic information, marital status, familial status, and source of income.

The rise of online hosting platforms has created a circumstance where the same building can serve as a residential dwelling on some nights and a commercial hotel or inn on others. This has created a legal gray area when enforcement of anti-discrimination laws come into play.

This bill explicitly includes a home posted on an online hosting platform such as AirBnb or VRBO in the legal definition of a housing accommodation. In doing so, the law will clearly state that discrimination on online hosting platform is illegal and strengthens the Department's authority in handling complaints. Currently, DFEH chooses to investigate complaints of housing discrimination registered against occupants that are making their homes available for rent via online hosting platforms. This bill codifies that current practice and empowers DFEH to continue investigating complaints.

According to the Author:

"AB 1497 creates a clear designation for laws on discrimination for homes posted on online hosting platforms. This bill will codify the current practice and empower the Department of Fair Employment and Housing to continue their practices on investigating and handling complaints of discrimination."

Arguments in Support:

According to the California Hotel and Lodging Association, "currently, short-term rental hosting platforms are not subject to fair housing laws, which leaves the door open for discrimination. CHLA believes everyone should have equal opportunity to use and enjoy a dwelling, which is why we support AB 1497."

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

None.

VOTES:

ASM HOUSING AND COMMUNITY DEVELOPMENT: 8-0-0

YES: Chiu, Diep, Gabriel, Gloria, Kiley, Limón, Maienschein, Quirk-Silva

ASM JUDICIARY: 12-0-0

YES: Mark Stone, Gallagher, Chau, Chiu, Gonzalez, Holden, Kalra, Kiley, Maienschein, Obernolte, Petrie-Norris, Reyes

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ASSEMBLY FLOOR: 74-0-6

YES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Gabriel, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Obernolte, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

ABS, ABST OR NV: Arambula, Burke, Cooley, Friedman, Cristina Garcia, Ting

SENATE FLOOR: 40-0-0

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

UPDATED:

VERSION: August 28, 2019

CONSULTANT: Steve Wertheim / H. & C.D. / (916) 319-2085 FN: 0001854

 THIRD READING 

Bill No: AB 1497

Author: Holden (D), et al.

Amended: 8/28/19 in Senate

Vote: 21

SENATE JUDICIARY COMMITTEE: 9-0, 6/11/19

AYES: Jackson, Borgeas, Allen, Caballero, Jones, Monning, Stern, Umberg, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 74-0, 5/16/19 (Consent) - See last page for vote

SUBJECT: Hosting platforms

SOURCE: Author

DIGEST:

This bill makes people who offer their property for short-term rental through online platforms subject to the California Fair Employment and Housing Act (FEHA), thus prohibiting such “hosts” from discriminating on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information.

Senate Floor Amendments of 8/28/19 insert chaptering out provisions.

ANALYSIS:

Existing law:

1. Defines “hosting platform” as a marketplace that is created for the primary purpose of facilitating the rental of a residential unit offered for occupancy for tourist or transient use for compensation to the offeror of that unit, and from which the operator of the hosting platform derives revenues, including booking fees or advertising revenues. (Bus. & Prof. Code § 22590.)
2. Defines “facilitating” to include, but not be limited to, the act of allowing the offeror of a residential unit to offer or advertise the residential unit on the Web site provided or maintained by the hosting platform’s operator. (Bus. & Prof. Code § 22590.)
3. Defines “housing accommodation” as any building, structure, or a portion thereof that is either occupied as a residence by one or more families, or is intended to be so occupied. (Gov. Code § 12927(d).)
4. Clarifies that the definition of “housing accommodation” encompasses apartments, residential motels, hotels, and boardinghouses. (2 C.C.R. § 120005.)
5. Makes it unlawful for any owner of housing accommodation to inquire about; make known any preference or limitation as to; discriminate; or harass a person based on, the person’s race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information. (Gov. Code § 12955(a-c).)
6. Establishes the Department of Fair Employment and Housing (DFEH) in the Business, Consumer Services, and Housing Agency with the powers and duties to, among other things, receive, investigate, conciliate, mediate, and/or prosecute complaints relating to housing discrimination. (Gov. Code §§ 12901, 12930.)

This bill:

1. Expands the definition of “housing accommodation” under FEHA to include buildings or structures (or some portion thereof) that are occupied or intended to be occupied via transactions that are facilitated by a hosting platform, thus subjecting anyone who lists residential property for rent on Internet hosting platforms to the housing anti-discrimination provisions of FEHA.
2. Contains chaptering out provisions.

Comments

1. Internet-based hosting platforms for short-term residential rentals. Over the past decade, the marketplace for temporary lodging has undergone a major transformation. What was once almost exclusively the province of businesses like hotels, motels, bed and breakfasts, and inns is now equally occupied by the owners of private residences, who rent out all or a part of these dwellings to people seeking a short-term place to stay. This transformation has been made possible through internet platforms that act as a middle person. The private residence owner offers their property on the platform and the people looking for a place to stay browse these offerings on the platform. When the person looking for a place to stay finds an offer they like, they indicate their interest to the platform, the platform informs the property owner about the person interested, and, if the property owner agrees, the platform consummates the deal.

Two platforms – Airbnb and HomeAway (also known as VRBO) – are generally regarded as the biggest players in this market, although there are several others as well.^[1] As of 2015, Airbnb had listings for two million properties across the globe on its site.^[2] By the end of 2018, HomeAway had nearly as many.^[3] By contrast, Marriot has just 535,000 hotel rooms available worldwide. ^[4] Three months ago, Airbnb announced that its 500 millionth guest had stayed at a property through arrangements made on its platform.^[5]

For the purposes of this bill, a key characteristic of transactions on these platforms is that both the property owner and the people interested in finding a place to stay generally have to create profiles of themselves, including their names and, in some cases, a photo of themselves. As a result, the residence owner offering their property for rent usually has at least some clues about the race, gender, and ethnicity of the person who wants to rent their property at the time that the owner decides whether or not to agree to the rental.

1. Evidence of the problem this bill is intended to address. There is both anecdotal evidence and significant research suggesting that people renting out properties commonly engage in discrimination. Media reports and individual accounts of such discrimination abound. For instance:
   1. In February 2017, Dyne Suh, a law student of Asian descent, booked a mountain cabin in Big Bear, California through Airbnb. After driving through a snowstorm from Los Angeles, Suh texted the “host” to confirm some adjustments to the reservation that, according to Suh, the host had previously approved. “I wouldn’t rent to u if you were the last person on earth,” the host reportedly wrote back to Suh. “One word says it all. Asian.” According to media accounts, when Suh replied that she would report the host to Airbnb for being racist, the host told her to “Go ahead” and “It’s why we have trump.” The host was subsequently banned from Airbnb.^[6]
   2. Around May 2016, an Airbnb host canceled on a guest who had attempted to book a room in his home texting “I hate niggers” and “Find another place to rest.” According to Airbnb, the host was permanently banned from their platform.^[7]

There is a Twitter hashtag devoted to many more allegations about incidents such as these: #AirbnbWhileBlack.

These disturbing examples appear to fit broader patterns identified in research on the issue. After submitting inquiries about renting about 6,400 different listings on Airbnb, a 2017 study found that “applications from guests with distinctively African-American names are 16% less likely to be accepted relative to identical guests with distinctively White names.”^[8]

1. Existing law may prohibit discrimination in Internet-based short-term rentals. Existing law may very well prohibit hosts from discriminating when they rent out property through Internet-based platforms. As it currently stands, California’s fair housing law prohibits discrimination in the provision of “housing accommodations” (Gov. Code § 12955) which it defines as any building, structure, or a portion thereof that is either occupied as a residence by one or more families, or that is intended to be so occupied. (Gov. Code § 12927(d).) The Unruh Act, meanwhile, prohibits arbitrary discrimination by a business establishment of any kind. (Civ. Code § 51.)

It is not crystal clear, however, whether short-term rentals set up through an online platform would definitively qualify as housing accommodations or business establishments under the law in every circumstance. For example, in relation to a lawsuit involving a Web site that matches roommates, the Ninth Circuit ruled that FEHA does not apply to “the sharing of living units.” (Fair Hous. Council v. Roommate.com, LLC (9th Cir. 2012) 666 F.3d 1216, 1223.) While living with a roommate long-term is clearly quite different from renting out a portion of your property on a short-term basis as a business proposition, it is not hard to imagine an Airbnb host seizing on the phrase “sharing of living units” to argue that FEHA does not apply when the owner occupies the same structure where the Airbnb guest will stay.

This bill eliminates any possible doubt as to whether or not short-term rentals consummated through an online platform are covered by FEHA, thus ensuring that hosts who discriminate can be held accountable for doing so.

1. Efforts by the platforms themselves do not appear to have eradicated the problem. In the wake of negative publicity about discrimination in their industry, the major hosting platforms have undertaken initiatives to try to curb the problem. Airbnb now requires its “hosts” to certify that they will not discriminate based on a series of protected categories.^[9] Moreover, according to Airbnb’s Web site: “Hosts who demonstrate a pattern of rejecting guests from a protected class (even while articulating legitimate reasons) undermine the strength of our community by making potential guests feel unwelcome, and Airbnb may suspend hosts who have demonstrated such a pattern from the Airbnb platform.” (Ibid.) Additionally, in October 2018, Airbnb changed its policy so that hosts can no longer request to see photographs of potential guests until after agreeing to the booking.^[10]

It is less immediately clear what specific steps HomeAway is taking to address possible discrimination by owners renting through its platform. On its Web site, HomeAway states that it is:

committed to an inclusive marketplace built on a foundation of trust, safety, and respect, and to a global platform that is open to travelers, owners, and property managers without regard to race, color, religion, national origin, ancestry, disability, sex, gender identity, sexual orientation, or marital status. We expect all users to demonstrate respect and tolerance in all interactions with other users—both online and off-line—and we reserve the right to remove anyone from our marketplace who fails to abide by these principles.^[11]

Similarly, the terms and conditions to which a HomeAway host must agree includes the following statement: “Members […] agree that they are responsible for and agree to abide by all laws, rules, ordinances, or regulations applicable to the listing of their rental property and the conduct of their rental business, including but not limited to […] compliance with all anti-discrimination and fair housing laws, as applicable.”^[12]

While these efforts are laudable and may be having some effect, it is not clear that regulation by the platforms and market forces are sufficient, by themselves, to eradicate the problem. By clarifying that Internet-based short-term rentals fall within FEHA’s purview, this bill ensures that there is an outside mechanism for holding short-term rental providers accountable if they discriminate.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 8/29/19)

California Hotel and Lodging Association

OPPOSITION: (Verified 8/29/19)

None received

ARGUMENTS IN SUPPORT: According to the author:

Technological advancements have created new dynamic markets in which emerging businesses occupy an unregulated space. In the case of online hosting platforms, a private home acts as both a dwelling for the proprietor and as an inn for the guest. The duality of the home in modern day through the convenience of online platforms is a legal gray area when enforcement of anti-discrimination laws come into play. Currently there is no existing law to directly address the creation of these new markets. AB 1497 creates a clear designation for laws on discrimination for homes posted on online hosting platforms. This bill will codify the current practice and empower the Department of Fair Employment and Housing to continue their practices on investigating and handling complaints of discrimination.

In support, the California Hotel and Lodging Association writes:

Currently, short-term rental hosting platforms are not subject to fair housing laws, which leaves the door open for discrimination. CHLA believes everyone should have equal opportunity to use and enjoy a dwelling, which is why we support AB 1497.

ASSEMBLY FLOOR: 74-0, 5/16/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Gabriel, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Arambula, Burke, Cooley, Friedman, Cristina Garcia, Ting

Prepared by: Timothy Griffiths / JUD. / (916) 651-4113

8/29/19 14:24:20

**** END ****

1. See Barber, The 9 Best Alternatives to AirBNB (Feb. 18, 2019) Curbed https://www.curbed.com/2016/12/13/13933554/airbnb-vacation-rental-alternatives (as of Jun. 1, 2019). ↑

2. Edelman, Luca, and Svirsky, Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment (Apr. 2017) American Economic Journal: Applied Economics 9, no. 2 https://www.hbs.edu/faculty/Publication%20Files/Racial%20Discrimination%20in%20the%20Sharing%20Economy%20-%2016sep2016_a28935c7-38db-4566-8d95-f5d4c2a58d73.pdf (as of Jun. 1, 2019), at pg. 4. ↑

3. Expedia Group, Inc. (Dec. 31, 2018) Annual Report (Form 10-K) https://ir.expediagroup.com/static-files/6fe46568-4ba4-43c9-98ef-eda3591c6892 (as of Jun. 1, 2019) at pg. 38. ↑

4. Edelman et al, supra note 2, at pg. 4. ↑

5. Airbnb Celebrates Half a Billion Guest Arrivals (Mar. 27, 2019) Airbnb https://press.airbnb.com/airbnb-celebrates-half-a-billion-guest-arrivals/ (as of Jun. 1, 2019). ↑

6. Wang, “One Word Says It All. Asian”: Airbnb Host Banned After Allegedly Canceling Guest Because of Her Race (Apr. 7, 2017) Los Angeles Times https://www.latimes.com/business/technology/la-fi-airbnb-discrimination-20170407-story.html (as of Jun. 1, 2019). ↑

7. O’Donavan, Racist Host Kicked Off Airbnb (Jun. 1, 2016) BuzzFeed News https://www.buzzfeednews.com/article/carolineodonovan/airbnb-removes-host-for-racist-remarks (as of Jun. 1, 2019). ↑

8. Edelman et al, supra note 2, at pg. 1. ↑

9. Airbnb’s Nondiscrimination Policy: Our Commitment to Inclusion and Respect https://www.airbnb.com/help/article/1405/airbnb-s-nondiscrimination-policy--our-commitment-to-inclusion-and-respect (as of Jun. 1, 2019). ↑

10. Update on Profile Photos (Oct. 22, 2018) Airbnb https://press.airbnb.com/update-on-profile-photos/ (as of Jun. 1, 2019). ↑

11. What is HomeAway’s Policy Regarding Harassment, Violence or Discrimination? https://help.vrbo.com/articles/What-is-HomeAway-s-policy-regarding-harassment-violence-or-discrimination (as of Jun. 1, 2019). ↑

12. Terms and Conditions (Nov. 14, 2017) HomeAway https://www.homeaway.com/info/legal/terms-conditions (as of Jun. 1, 2019). ↑

 THIRD READING 

Bill No: AB 1497

Author: Holden (D), et al.

Amended: 6/12/19 in Senate

Vote: 21

SENATE JUDICIARY COMMITTEE: 9-0, 6/11/19

AYES: Jackson, Borgeas, Allen, Caballero, Jones, Monning, Stern, Umberg, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 74-0, 5/16/19 (Consent) - See last page for vote

SUBJECT: Hosting platforms

SOURCE: Author

DIGEST:

This bill makes people who offer their property for short-term rental through online platforms subject to the California Fair Employment and Housing Act (FEHA), thus prohibiting such “hosts” from discriminating on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information.

ANALYSIS:

Existing law:

1. Defines “hosting platform” as a marketplace that is created for the primary purpose of facilitating the rental of a residential unit offered for occupancy for tourist or transient use for compensation to the offeror of that unit, and from which the operator of the hosting platform derives revenues, including booking fees or advertising revenues. (Bus. & Prof. Code § 22590.)
2. Defines “facilitating” to include, but not be limited to, the act of allowing the offeror of a residential unit to offer or advertise the residential unit on the Web site provided or maintained by the hosting platform’s operator. (Bus. & Prof. Code § 22590.)
3. Defines “housing accommodation” as any building, structure, or a portion thereof that is either occupied as a residence by one or more families, or is intended to be so occupied. (Gov. Code § 12927(d).)
4. Clarifies that the definition of “housing accommodation” encompasses apartments, residential motels, hotels, and boardinghouses. (2 C.C.R. § 120005.)
5. Makes it unlawful for any owner of housing accommodation to inquire about; make known any preference or limitation as to; discriminate; or harass a person based on, the person’s race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information. (Gov. Code § 12955(a-c).)
6. Establishes the Department of Fair Employment and Housing (DFEH) in the Business, Consumer Services, and Housing Agency with the powers and duties to, among other things, receive, investigate, conciliate, mediate, and/or prosecute complaints relating to housing discrimination. (Gov. Code §§ 12901, 12930.)

This bill expands the definition of “housing accommodation” under FEHA to include buildings or structures (or some portion thereof) that are occupied or intended to be occupied via transactions that are facilitated by a hosting platform, thus subjecting anyone who lists residential property for rent on Internet hosting platforms to the housing anti-discrimination provisions of FEHA.

Comments

1. Internet-based hosting platforms for short-term residential rentals. Over the past decade, the marketplace for temporary lodging has undergone a major transformation. What was once almost exclusively the province of businesses like hotels, motels, bed and breakfasts, and inns is now equally occupied by the owners of private residences, who rent out all or a part of these dwellings to people seeking a short-term place to stay. This transformation has been made possible through internet platforms that act as a middle person. The private residence owner offers their property on the platform and the people looking for a place to stay browse these offerings on the platform. When the person looking for a place to stay finds an offer they like, they indicate their interest to the platform, the platform informs the property owner about the person interested, and, if the property owner agrees, the platform consummates the deal.

Two platforms – Airbnb and HomeAway (also known as VRBO) – are generally regarded as the biggest players in this market, although there are several others as well.^[1] As of 2015, Airbnb had listings for two million properties across the globe on its site.^[2] By the end of 2018, HomeAway had nearly as many.^[3] By contrast, Marriot has just 535,000 hotel rooms available worldwide. ^[4] Three months ago, Airbnb announced that its 500 millionth guest had stayed at a property through arrangements made on its platform.^[5]

For the purposes of this bill, a key characteristic of transactions on these platforms is that both the property owner and the people interested in finding a place to stay generally have to create profiles of themselves, including their names and, in some cases, a photo of themselves. As a result, the residence owner offering their property for rent usually has at least some clues about the race, gender, and ethnicity of the person who wants to rent their property at the time that the owner decides whether or not to agree to the rental.

1. Evidence of the problem this bill is intended to address. There is both anecdotal evidence and significant research suggesting that people renting out properties commonly engage in discrimination. Media reports and individual accounts of such discrimination abound. For instance:
   1. In February 2017, Dyne Suh, a law student of Asian descent, booked a mountain cabin in Big Bear, California through Airbnb. After driving through a snowstorm from Los Angeles, Suh texted the “host” to confirm some adjustments to the reservation that, according to Suh, the host had previously approved. “I wouldn’t rent to u if you were the last person on earth,” the host reportedly wrote back to Suh. “One word says it all. Asian.” According to media accounts, when Suh replied that she would report the host to Airbnb for being racist, the host told her to “Go ahead” and “It’s why we have trump.” The host was subsequently banned from Airbnb.^[6]
   2. Around May 2016, an Airbnb host canceled on a guest who had attempted to book a room in his home texting “I hate niggers” and “Find another place to rest.” According to Airbnb, the host was permanently banned from their platform.^[7]

There is a Twitter hashtag devoted to many more allegations about incidents such as these: #AirbnbWhileBlack.

These disturbing examples appear to fit broader patterns identified in research on the issue. After submitting inquiries about renting about 6,400 different listings on Airbnb, a 2017 study found that “applications from guests with distinctively African-American names are 16% less likely to be accepted relative to identical guests with distinctively White names.”^[8]

1. Existing law may prohibit discrimination in Internet-based short-term rentals. Existing law may very well prohibit hosts from discriminating when they rent out property through Internet-based platforms. As it currently stands, California’s fair housing law prohibits discrimination in the provision of “housing accommodations” (Gov. Code § 12955) which it defines as any building, structure, or a portion thereof that is either occupied as a residence by one or more families, or that is intended to be so occupied. (Gov. Code § 12927(d).) The Unruh Act, meanwhile, prohibits arbitrary discrimination by a business establishment of any kind. (Civ. Code § 51.)

It is not crystal clear, however, whether short-term rentals set up through an online platform would definitively qualify as housing accommodations or business establishments under the law in every circumstance. For example, in relation to a lawsuit involving a Web site that matches roommates, the Ninth Circuit ruled that FEHA does not apply to “the sharing of living units.” (Fair Hous. Council v. Roommate.com, LLC (9th Cir. 2012) 666 F.3d 1216, 1223.) While living with a roommate long-term is clearly quite different from renting out a portion of your property on a short-term basis as a business proposition, it is not hard to imagine an Airbnb host seizing on the phrase “sharing of living units” to argue that FEHA does not apply when the owner occupies the same structure where the Airbnb guest will stay.

This bill eliminates any possible doubt as to whether or not short-term rentals consummated through an online platform are covered by FEHA, thus ensuring that hosts who discriminate can be held accountable for doing so.

1. Efforts by the platforms themselves do not appear to have eradicated the problem. In the wake of negative publicity about discrimination in their industry, the major hosting platforms have undertaken initiatives to try to curb the problem. Airbnb now requires its “hosts” to certify that they will not discriminate based on a series of protected categories.^[9] Moreover, according to Airbnb’s Web site: “Hosts who demonstrate a pattern of rejecting guests from a protected class (even while articulating legitimate reasons) undermine the strength of our community by making potential guests feel unwelcome, and Airbnb may suspend hosts who have demonstrated such a pattern from the Airbnb platform.” (Ibid.) Moreover, in October 2018, Airbnb changed its policy so that hosts can no longer request to see photographs of potential guests until after agreeing to the booking.^[10]

It is less immediately clear what specific steps HomeAway is taking to address possible discrimination by owners renting through its platform. On its Web site, HomeAway states that it is:

committed to an inclusive marketplace built on a foundation of trust, safety, and respect, and to a global platform that is open to travelers, owners, and property managers without regard to race, color, religion, national origin, ancestry, disability, sex, gender identity, sexual orientation, or marital status. We expect all users to demonstrate respect and tolerance in all interactions with other users—both online and off-line—and we reserve the right to remove anyone from our marketplace who fails to abide by these principles.^[11]

Similarly, the terms and conditions to which a HomeAway host must agree includes the following statement: “Members […] agree that they are responsible for and agree to abide by all laws, rules, ordinances, or regulations applicable to the listing of their rental property and the conduct of their rental business, including but not limited to […] compliance with all anti-discrimination and fair housing laws, as applicable.”^[12]

While these efforts are laudable and may be having some effect, it is not clear that regulation by the platforms and market forces are sufficient, by themselves, to eradicate the problem. By clarifying that Internet-based short-term rentals fall within FEHA’s purview, this bill ensures that there is an outside mechanism for holding short-term rental providers accountable if they discriminate.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 6/21/19)

California Hotel and Lodging Association

OPPOSITION: (Verified 6/21/19)

None received

ARGUMENTS IN SUPPORT: According to the author:

Technological advancements have created new dynamic markets in which emerging businesses occupy an unregulated space. In the case of online hosting platforms, a private home acts as both a dwelling for the proprietor and as an inn for the guest. The duality of the home in modern day through the convenience of online platforms is a legal gray area when enforcement of anti-discrimination laws come into play. Currently there is no existing law to directly address the creation of these new markets. AB 1497 creates a clear designation for laws on discrimination for homes posted on online hosting platforms. This bill will codify the current practice and empower the Department of Fair Employment and Housing to continue their practices on investigating and handling complaints of discrimination.

In support, the California Hotel and Lodging Association writes:

Currently, short-term rental hosting platforms are not subject to fair housing laws, which leaves the door open for discrimination. CHLA believes everyone should have equal opportunity to use and enjoy a dwelling, which is why we support AB 1497.

ASSEMBLY FLOOR: 74-0, 5/16/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Gabriel, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Arambula, Burke, Cooley, Friedman, Cristina Garcia, Ting

Prepared by: Timothy Griffiths / JUD. / (916) 651-4113

7/2/19 9:32:20

**** END ****

1. See Barber, The 9 Best Alternatives to AirBNB (Feb. 18, 2019) Curbed https://www.curbed.com/2016/12/13/13933554/airbnb-vacation-rental-alternatives (as of Jun. 1, 2019). ↑

2. Edelman, Luca, and Svirsky, Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment (Apr. 2017) American Economic Journal: Applied Economics 9, no. 2 https://www.hbs.edu/faculty/Publication%20Files/Racial%20Discrimination%20in%20the%20Sharing%20Economy%20-%2016sep2016_a28935c7-38db-4566-8d95-f5d4c2a58d73.pdf (as of Jun. 1, 2019), at pg. 4. ↑

3. Expedia Group, Inc. (Dec. 31, 2018) Annual Report (Form 10-K) https://ir.expediagroup.com/static-files/6fe46568-4ba4-43c9-98ef-eda3591c6892 (as of Jun. 1, 2019) at pg. 38. ↑

4. Edelman et al, supra note 2, at pg. 4. ↑

5. Airbnb Celebrates Half a Billion Guest Arrivals (Mar. 27, 2019) Airbnb https://press.airbnb.com/airbnb-celebrates-half-a-billion-guest-arrivals/ (as of Jun. 1, 2019). ↑

6. Wang, “One Word Says It All. Asian”: Airbnb Host Banned After Allegedly Canceling Guest Because of Her Race (Apr. 7, 2017) Los Angeles Times https://www.latimes.com/business/technology/la-fi-airbnb-discrimination-20170407-story.html (as of Jun. 1, 2019). ↑

7. O’Donavan, Racist Host Kicked Off Airbnb (Jun. 1, 2016) BuzzFeed News https://www.buzzfeednews.com/article/carolineodonovan/airbnb-removes-host-for-racist-remarks (as of Jun. 1, 2019). ↑

8. Edelman et al, supra note 2, at pg. 1. ↑

9. Airbnb’s Nondiscrimination Policy: Our Commitment to Inclusion and Respect https://www.airbnb.com/help/article/1405/airbnb-s-nondiscrimination-policy--our-commitment-to-inclusion-and-respect (as of Jun. 1, 2019). ↑

10. Update on Profile Photos (Oct. 22, 2018) Airbnb https://press.airbnb.com/update-on-profile-photos/ (as of Jun. 1, 2019). ↑

11. What is HomeAway’s Policy Regarding Harassment, Violence or Discrimination? https://help.vrbo.com/articles/What-is-HomeAway-s-policy-regarding-harassment-violence-or-discrimination (as of Jun. 1, 2019). ↑

12. Terms and Conditions (Nov. 14, 2017) HomeAway https://www.homeaway.com/info/legal/terms-conditions (as of Jun. 1, 2019). ↑

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2019-2020 Regular Session

Bill No: AB 1497 (Author:Holden)

Version: March 21, 2019

Hearing Date: June 11, 2019

Fiscal: Yes

Urgency: No

Consultant: TSG

SUBJECT

Hosting platforms

DIGEST

This bill makes people who offer their property for short-term rental through online platforms subject to the California Fair Employment and Housing Act (FEHA), thus prohibiting such “hosts” from discriminating on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information.

EXECUTIVE SUMMARY

Prior to the civil rights movement of the 1960s and the passage of anti-discrimination laws, it was commonplace in the United States for hotels and motels to refuse guests on account of their race. One of the more successful achievements of civil rights laws has been to open up lodging and places of public accommodation to all who can afford them. Over the past decade, however, the marketplace for lodging has changed dramatically through the advent of online platforms that connect people seeking a short-term place to stay with people willing to rent out a portion or all of their property for that purpose. There is substantial evidence, both anecdotal and in the form of broader studies, indicating that discrimination is common among those offering to rent their property. While it seems likely that such discrimination is unlawful under the existing civil rights regime, the point could be subject to debate, since online transactions of this kind did not take place when the civil rights laws were written. This bill would make it clear that people offering up their property for short-term rentals through online platforms are subject to FEHA and could be held liable, as a result, if they discriminate.

The bill is author-sponsored. It has support from a hotel and lodging industry trade group. There is no known opposition at this time.

PROPOSED CHANGES TO THE LAW

Existing state law:

1. Defines “hosting platform” as a marketplace that is created for the primary purpose of facilitating the rental of a residential unit offered for occupancy for tourist or transient use for compensation to the offeror of that unit, and from which the operator of the hosting platform derives revenues, including booking fees or advertising revenues. (Bus. & Prof. Code § 22590.)
2. Defines “facilitating” to include, but not be limited to, the act of allowing the offeror of a residential unit to offer or advertise the residential unit on the website provided or maintained by the hosting platform’s operator. (Bus. & Prof. Code § 22590.)
3. Defines “housing accommodation” as any building, structure, or a portion thereof that is either occupied as a residence by one or more families, or is intended to be so occupied. (Gov. Code § 12927(d).)
4. Clarifies that the definition of “housing accommodation” encompasses apartments, residential motels, hotels, and boardinghouses. (2 C.C.R. § 120005.)
5. Makes it unlawful for any owner of housing accommodation to inquire about; make known any preference or limitation as to; discriminate; or harass a person based on, the person’s race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information. (Gov. Code § 12955(a-c).)
6. Establishes the Department of Fair Employment and Housing (DFEH) in the Business, Consumer Services, and Housing Agency with the powers and duties to, among other things, receive, investigate, conciliate, mediate, and/or prosecute complaints relating to housing discrimination. (Gov. Code §§ 12901, 12930.)

This bill:

1. Expands the definition of “housing accommodation” under FEHA to include buildings or structures (or some portion thereof) that are occupied or intended to be occupied via transactions that are facilitated by a hosting platform, thus subjecting anyone who lists residential property for rent on Internet hosting platforms to the housing anti-discrimination provisions of FEHA.

COMMENTS

1. Background on Internet-based hosting platforms for short-term residential rentals

Over the past decade, the marketplace for temporary lodging has undergone a major transformation. What was once almost exclusively the province of businesses like hotels, motels, bed and breakfasts, and inns is now equally occupied by the owners of private residences, who rent out all or a part of these dwellings to people seeking a short-term place to stay. This transformation has been made possible through internet platforms that act as a middle person. The private residence owner offers their property on the platform and the people looking for a place to stay browse these offerings on the platform. When the person looking for a place to stay finds an offer they like, they indicate their interest to the platform, the platform informs the property owner about the person interested, and, if the property owner agrees, the platform consummates the deal.

Two platforms – Airbnb and HomeAway (also known as VRBO) – are generally regarded as the biggest players in this market, although there are several others as well.^[1] As of 2015, Airbnb had listings for two million properties across the globe on its site.^[2] By the end of 2018, HomeAway had nearly as many.^[3] By contrast, Marriot has just 535,000 hotel rooms available worldwide. ^[4] Three months ago, Airbnb announced that its 500 millionth guest had stayed at a property through arrangements made on its platform.^[5]

For the purposes of this bill, a key characteristic of transactions on these platforms is that both the property owner and the people interested in finding a place to stay generally have to create profiles of themselves, including their names and, in some cases, a photo of themselves. As a result, the residence owner offering their property for rent usually has at least some clues about the race, gender, and ethnicity of the person who wants to rent their property at the time that the owner decides whether or not to agree to the rental.

1. Evidence of the problem the bill is intended to address

There is both anecdotal evidence and significant research suggesting that people renting out properties commonly engage in discrimination. Media reports and individual accounts of such discrimination abound. For instance:

• In February 2017, Dyne Suh, a law student of Asian descent, booked a mountain cabin in Big Bear, California through Airbnb. After driving through a snowstorm from Los Angeles, Suh texted the “host” to confirm some adjustments to the reservation that, according to Suh, the host had previously approved. “I wouldn’t rent to u if you were the last person on earth,” the host reportedly wrote back to Suh. “One word says it all. Asian.” According to media accounts, when Suh replied that she would report the host to Airbnb for being racist, the host told her to “Go ahead” and “It’s why we have trump.” The host was subsequently banned from Airbnb.^[6]
• Around May 2016, an Airbnb host canceled on a guest who had attempted to book a room in his home texting “I hate niggers” and “Find another place to rest.” According to Airbnb, the host was permanently banned from their platform.^[7]

There is a Twitter hashtag devoted to many more allegations about incidents such as these: #AirbnbWhileBlack.

These disturbing examples appear to fit broader patterns identified in research on the issue. After submitting inquiries about renting about 6,400 different listings on Airbnb, a 2017 study found that “applications from guests with distinctively African-American names are 16% less likely to be accepted relative to identical guests with distinctively White names.”^[8]

1. Existing law may prohibit discrimination in Internet-based short-term rentals

Existing law may very well prohibit hosts from discriminating when they rent out property through Internet-based platforms. As it currently stands, California’s fair housing law prohibits discrimination in the provision of “housing accommodations” (Gov. Code § 12955) which it defines as any building, structure, or a portion thereof that is either occupied as a residence by one or more families, or that is intended to be so occupied. (Gov. Code § 12927(d).) The Unruh Act, meanwhile, prohibits arbitrary discrimination by a business establishment of any kind. (Civ. Code § 51.)

It is not crystal clear, however, whether short-term rentals set up through an online platform would definitively qualify as housing accommodations or business establishments under the law in every circumstance. For example, in relation to a lawsuit involving a website that matches roommates, the Ninth Circuit ruled that FEHA does not apply to “the sharing of living units.” (Fair Hous. Council v. Roommate.com, LLC (9th Cir. 2012) 666 F.3d 1216, 1223.) While living with a roommate long-term is clearly quite different from renting out a portion of your property on a short-term basis as a business proposition, it is not hard to imagine an Airbnb host seizing on the phrase “sharing of living units” to argue that FEHA does not apply when the owner occupies the same structure where the Airbnb guest will stay.

This bill would eliminate any possible doubt as to whether or not short-term rentals consummated through an online platform are covered by FEHA, thus ensuring that hosts who discriminate can be held accountable for doing so.

1. Efforts by the platforms themselves do not appear to have eradicated the problem

In the wake of negative publicity about discrimination in their industry, the major hosting platforms have undertaken initiatives to try to curb the problem. Airbnb now requires its “hosts” to certify that they will not discriminate based on a series of protected categories.^[9] Moreover, according to Airbnb’s website: “Hosts who demonstrate a pattern of rejecting guests from a protected class (even while articulating legitimate reasons) undermine the strength of our community by making potential guests feel unwelcome, and Airbnb may suspend hosts who have demonstrated such a pattern from the Airbnb platform.” (Ibid.) Moreover, in October 2018, Airbnb changed its policy so that hosts can no longer request to see photographs of potential guests until after agreeing to the booking.^[10]

It is less immediately clear what specific steps HomeAway is taking to address possible discrimination by owners renting through its platform. On its website, HomeAway states that it is:

committed to an inclusive marketplace built on a foundation of trust, safety, and respect, and to a global platform that is open to travelers, owners, and property managers without regard to race, color, religion, national origin, ancestry, disability, sex, gender identity, sexual orientation, or marital status. We expect all users to demonstrate respect and tolerance in all interactions with other users—both online and off-line—and we reserve the right to remove anyone from our marketplace who fails to abide by these principles.^[11]

Similarly, the terms and conditions to which a HomeAway host must agree includes the following statement: “Members […] agree that they are responsible for and agree to abide by all laws, rules, ordinances, or regulations applicable to the listing of their rental property and the conduct of their rental business, including but not limited to […] compliance with all anti-discrimination and fair housing laws, as applicable.”^[12]

While these efforts are laudable and may be having some effect, it is not clear that regulation by the platforms and market forces are sufficient, by themselves, to eradicate the problem. By clarifying that Internet-based short-term rentals fall within FEHA’s purview, this bill would ensure that there is an outside mechanism for holding short-term rental providers accountable if they discriminate.

5. Accountability for the hosting platforms themselves?

This bill would clarify that people who rent out property through Internet hosting platforms can be held accountable if they discriminate. The bill does not impose liability on the hosting platforms themselves. As discussed in detail in the Assembly Judiciary Committee’s analysis of this bill, the possibility of holding the platforms accountable for discriminatory acts by their users may be foreclosed by the Communications Decency Act, 47 U.S.C. 230, which generally provides immunity to the entity operating a website for any content created by users of the website.

At the same time, case law suggests that where aspects of the platform’s interface enable or facilitate discrimination, the platform itself could be held liable under either federal or state discrimination laws. In determining whether a website platform for matching roommates together could be sued for discrimination, for example, the Ninth Circuit ruled that, while the platform could not be held liable for written content input by users, it could be called to account for aspects of how the site itself was designed:

By requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommates becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information. And section 230 provides immunity only if the interactive computer service does not “creat[e] or develop[ ]” the information “in whole or in part.” (Fair Hous. Council v. Roommates.com, LLC (9th Cir. 2008) 521 F.3d 1157, 1166.)

Thus, it would seem that even to the degree that short-term rental facilitation platforms cannot be sued for discrimination by their hosts, the platforms may have some legal responsibility to ensure the design or operation of their platform does not act to induce or enable discriminatory practices by their hosts.

6. Proposed amendments

In order ensure that the bill is not construed to have unintended impacts on other areas of law, the author proposes to incorporate amendments into the bill that would:

• state that it is not the intent of the Legislature through this bill to affect the permissibility, classification, or local regulation of the use of residential structures for short term rentals or other transient occupancy; and
• clarify that the Legislature also does not intend, through this bill, to imply that short-term rentals on hosting platforms are permanent housing.

The specific amendments are as follows:

Amendment 1

On page 2, before line 1, insert:

SECTION 1. The Legislature finds and declares both of the following:

1. It is the intent of the Legislature that this act will not affect the permissibility, classification, or local regulation or the use of residential structures for short-term rentals or other transient occupancy, pursuant to a transaction facilitated by a hosting platform or other method.
2. It is the intent of the Legislature that this act does not imply that short-term rentals on hosting platforms should be considered permanent housing.

Amendment 2

On page 2, in line 1, strike out “SECTION 1.” and insert:

SEC. 2.

7. Arguments in support of the bill

According to the author:

Technological advancements have created new dynamic markets in which emerging businesses occupy an unregulated space. In the case of online hosting platforms, a private home acts as both a dwelling for the proprietor and as an inn for the guest. The duality of the home in modern day through the convenience of online platforms is a legal gray area when enforcement of anti-discrimination laws come into play. Currently there is no existing law to directly address the creation of these new markets. AB 1497 creates a clear designation for laws on discrimination for homes posted on online hosting platforms. This bill will codify the current practice and empower the Department of Fair Employment and Housing to continue their practices on investigating and handling complaints of discrimination.

In support, the California Hotel and Lodging Association writes:

Currently, short-term rental hosting platforms are not subject to fair housing laws, which leaves the door open for discrimination. CHLA believes everyone should have equal opportunity to use and enjoy a dwelling, which is why we support AB 1497.

SUPPORT

California Hotel and Lodging Association

OPPOSITION

None known

RELATED LEGISLATION

Pending Legislation:

SB 222 (Hill, 2019) adds “military or veteran status” to the list of protected categories under FEHA’s housing-related laws. The bill also adds Veterans Assistance Supportive Housing (VASH) vouchers to the definition of source of income, on the basis of which housing accommodation providers may not discriminate. SB 222 is currently pending consideration before the Assembly Judiciary Committee.

SB 329 (Mitchell, 2019) would add subsidized housing vouchers to the definition of source of income, on the basis of which housing accommodation providers may not discriminate. SB 329 is currently pending consideration before the Assembly Judiciary Committee.

AB 446 (Choi, 2019) adds victims of abuse, including domestic violence, elder abuse, dependent abuse, human trafficking, sexual assault, and stalking to FEHA’s protected categories for housing purposes. AB 446 is currently pending consideration before the Senate Judiciary Committee.

Prior Legislation:

SB 1092 (Monning, Ch. 113, Stats. 2016) required hosting platforms to provide a specified notice recommending that a person check their homeowners’ or renters’ insurance policies for coverage and restrictions before listing their residence for short-term rental on the platform website.

SB 1053 (Leno, 2016) would have amended FEHA to prohibit landlords from categorically refusing to rent to tenants who receive rental subsidies or assistance, such as federal housing assistance vouchers issued pursuant to Section 8 of the United States Housing Act of 1937. SB 1053 died in the Senate Appropriations Committee.

SB 761 (Hall, Ch. 239, Stats. 2015) required hosting platforms to provide a specified notice warning tenants that their rental contract or lease might restrict their ability to list their residence on a hosting platform, and could result in legal action, including possible eviction.

SB 593 (McGuire, 2015) would have required hosting platforms to report to cities and counties (1) the address of each residential unit offered on the hosting platform and occupied during a quarterly period for tourist or transient use, (2) the number of nights the unit was so occupied, and (3) the amounts paid for occupancy. SB 593 died on the Senate Floor.

AB 3165 (Fenton, Ch. 992, Stats. 1980) enacted FEHA by combining and recodifying two existing statutes, the California Fair Employment Practices Act and the Rumford Fair Housing Act.

PRIOR VOTES:

Assembly Floor (Ayes 74, Noes 0)

Assembly Appropriations Committee (Ayes 18, Noes 0)

Assembly Judiciary Committee (Ayes 12, Noes 0)

Assembly Housing and Community Development Committee (Ayes 8, Noes 0)

**************

1. See Barber, The 9 Best Alternatives to AirBNB (Feb. 18, 2019) Curbed https://www.curbed.com/2016/12/13/13933554/airbnb-vacation-rental-alternatives (as of Jun. 1, 2019). ↑

2. Edelman, Luca, and Svirsky, Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment (Apr. 2017) American Economic Journal: Applied Economics 9, no. 2 https://www.hbs.edu/faculty/Publication%20Files/Racial%20Discrimination%20in%20the%20Sharing%20Economy%20-%2016sep2016_a28935c7-38db-4566-8d95-f5d4c2a58d73.pdf (as of Jun. 1, 2019), at pg. 4. ↑

3. Expedia Group, Inc. (Dec. 31, 2018) Annual Report (Form 10-K) https://ir.expediagroup.com/static-files/6fe46568-4ba4-43c9-98ef-eda3591c6892 (as of Jun. 1, 2019) at pg. 38. ↑

4. Edelman et al, supra note 2, at pg. 4. ↑

5. Airbnb Celebrates Half a Billion Guest Arrivals (Mar. 27, 2019) Airbnb https://press.airbnb.com/airbnb-celebrates-half-a-billion-guest-arrivals/ (as of Jun. 1, 2019). ↑

6. Wang, “One Word Says It All. Asian”: Airbnb Host Banned After Allegedly Canceling Guest Because of Her Race (Apr. 7, 2017) Los Angeles Times https://www.latimes.com/business/technology/la-fi-airbnb-discrimination-20170407-story.html (as of Jun. 1, 2019). ↑

7. O’Donavan, Racist Host Kicked Off Airbnb (Jun. 1, 2016) BuzzFeed News https://www.buzzfeednews.com/article/carolineodonovan/airbnb-removes-host-for-racist-remarks (as of Jun. 1, 2019). ↑

8. Edelman et al, supra note 2, at pg. 1. ↑

9. Airbnb’s Nondiscrimination Policy: Our Commitment to Inclusion and Respect https://www.airbnb.com/help/article/1405/airbnb-s-nondiscrimination-policy--our-commitment-to-inclusion-and-respect (as of Jun. 1, 2019). ↑

10. Update on Profile Photos (Oct. 22, 2018) Airbnb https://press.airbnb.com/update-on-profile-photos/ (as of Jun. 1, 2019). ↑

11. What is HomeAway’s Policy Regarding Harassment, Violence or Discrimination? https://help.vrbo.com/articles/What-is-HomeAway-s-policy-regarding-harassment-violence-or-discrimination (as of Jun. 1, 2019). ↑

12. Terms and Conditions (Nov. 14, 2017) HomeAway https://www.homeaway.com/info/legal/terms-conditions (as of Jun. 1, 2019). ↑

Date of Hearing: May 8, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1497

Author:(Holden) – As Amended Ver:March 21, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill adds housing offered on a hosting platform to the definition of “housing accommodation” in the Fair Employment and Housing Act (FEHA) to clarify that persons who offer residential properties, or portions thereof, for rent on internet hosting platforms are subject to FEHA’s anti-discrimination provisions.

FISCAL EFFECT:

Minor and absorbable costs to the Department of Fair Employment and Housing (DFEH).

COMMENTS:

1. Purpose. This bill seeks to clarify that persons who offer residential properties, or portions thereof, for rent on iInternet hosting platforms, such as Airbnb, VRBO and HomeAway, are subject to FEHA’s provisions forbidding discrimination in housing accommodations. According to the author:

[This bill] creates a clear designation for laws on discrimination for homes posted on online hosting platforms. This bill will codify the current practice and empower the Department of Fair Employment and Housing to continue their practices on investigating and handling complaints of discrimination.

1. Background. Existing law, FEHA, prohibits an owner of housing from engaging in specific acts of discrimination against a person seeking to purchase, rent or lease any housing accommodation. DFEH is responsible for enforcing FEHA and other state fair housing laws making it illegal to discriminate in all aspects of the housing business, including renting or leasing, sales, mortgage lending and insurance, advertising, practices such as restrictive covenants and new construction. Existing law protects individuals from housing discrimination based on age, race, color, ancestry, national origin, religion, mental or physical disability, sex, gender, sexual orientation, gender identity, gender expression, genetic information, marital status, familial status and source of income.

This bill explicitly includes a home posted on an online hosting platform in the legal definition of a housing accommodation, thus clarifying that discrimination on an online hosting platform is illegal and strengthens DFEH’s authority to handle complaints.

Internet-based hosting platforms, such as Airbnb, VRBO, and HomeAway, provide a well-established, highly popular means for travelers to find places to stay when they are away from home. According to Airbnb, as of March 2019, 500 million guests had checked into Airbnb properties since the company’s founding in 2007.

1. Related Legislation. AB 446 (Choi), of this legislative session, adds victims of abuse, including domestic violence, elder abuse, dependent abuse, human trafficking, sexual assault and stalking to FEHA’s protected categories. That bill is pending in the this committee.
2. Prior Legislation.

AB 686 (Santiago), Chapter 958, Statutes of 2018, enacted an obligation under California law for public agencies to affirmatively further fair housing.

SB 1092 (Monning), Chapter 113, Statutes of 2016, requires hosting platforms to provide a specified notice recommending that a person check their homeowners’ or renters’ insurance policies for coverage and restrictions before listing their residence for short-term rental on a platform website.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

ABPCA Bill Id:AB 1497

Author:(Holden) – As Amended Ver:March 21, 2019

SUBJECT: HOSTING PLATFORMS

KEY ISSUE: SHOULD PERSONS WHO OFFER PROPERTIES FOR RENT ON INTERNEt HOSTING PLATFORMS BE SUBJECT TO THE PROVISIONS OF THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT THAT PROHIBIT DISCRIMINATION IN THE OFFER AND PROVISION OF HOUSING ACCOMODATIONS?

SYNOPSIS

This author-sponsored bill would amend the California Fair Employment and Housing Act to make clear that offerors of residential properties on Internet hosting platforms such as Airbnb, Homeaway, and VRBO are subject to the same housing anti-discrimination laws as other, more traditional purveyors of rental housing, such as landlords and hotel owners. The need for this bill is demonstrated by overwhelming evidence, both anecdotal and statistical, that a subset of hosts invidiously discriminate on the basis of race against both prospective guests and guests who have secured lodging through hosting platforms. While establishing the liability of hosting platforms themselves for facilitating this discrimination may have deterrent value and might cause the platforms to alter their practices in order to make discrimination more difficult, such an effort would likely be preempted by the safe harbor provided under Section 230 of the federal Communications and Decency Act of 1996. Nevertheless, if enacted, this bill would advance California’s longstanding policy and efforts to prohibit discrimination in housing, and provide victims with a means of obtaining redress and justice for an atavistic, terrible wrong. The bill is supported by a hotel and lodging trade association. It has no opposition on file.

SUMMARY: Subjects anyone who lists residential property for rental on Internet hosting platforms to the housing anti-discrimination provisions of the California Fair Employment and Housing Act (FEHA). Specifically, this bill expands the definition of “housing accommodation” under FEHA to include buildings or structures (or some portion thereof) that are occupied or intended to be occupied via transactions that are facilitated by a hosting platform.

EXISTING LAW:

1. Defines “hosting platform” as a marketplace that is created for the primary purpose of facilitating the rental of a residential unit offered for occupancy for tourist or transient use for compensation to the offeror of that unit, and from which the operator of the hosting platform derives revenues, including booking fees or advertising revenues. (Business and Professions Code Section 22590.)
2. Defines “facilitating” to include, but not be limited to, the act of allowing the offeror of a residential unit to offer or advertise the residential unit on the Internet Web site provided or maintained by the hosting platform’s operator. (Ibid.)
3. Defines “housing accommodation” as any building, structure, or a portion thereof that is either occupied as a residence by one or more families, or is intended to be so occupied. (Government Code Section 12927 (d).)
4. Clarifies that the definition of “housing accommodation” encompasses apartments, residential motels, hotels, and boardinghouses. (California Code of Regulations, Title 2, Section 120005.)
5. Pursuant to FEHA, declares it to be against public policy to practice discrimination in housing accommodations on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information; and declares further that every person has a civil right to seek, obtain, or hold housing without facing discrimination based on these protected classes. (Government Code Sections 12920, 12921 (b).)
6. Declares it unlawful, pursuant to FEHA, for any owner of housing accommodation to inquire about; make known any preference or limitation as to; discriminate; or harass a person based on, the person’s race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information. (Government Code Section 12955 (a) - (c).)
7. Establishes the Department of Fair Employment and Housing (DFEH) in the Business, Consumer Services, and Housing Agency with the powers and duties to, among other things, receive, investigate, conciliate, mediate, and/or prosecute complaints relating to housing discrimination. (Government Code Sections 12901, 12930.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: AB 1497 would make California law clear that persons who offer residential properties, or portions thereof, for rent on Internet hosting platforms are subject to FEHA’s provisions forbidding discrimination in housing accommodations, and consequently, are under the jurisdiction of DFEH.

Background and justification for this bill. Internet-based hosting platforms, such as Airbnb, VRBO, and HomeAway, provide a well-established, highly popular means for travelers to find places to stay when they are away from home. According to Airbnb, as of March 2019, 500 million guests had checked into Airbnb properties since the company’s founding in 2007. (Airbnb Celebrates Half a Billion Guest Arrivals (Mar. 27, 2019) available at https://press.airbnb.com/airbnb-celebrates-half-a-billion-guest-arrivals/.) HomeAway had “over 1.8 million online bookable listings available” as of the end of 2018. (Expedia Group, Inc. (Dec. 31, 2018) Annual Report (Form 10-K) at 38.)

Given how prevalent the use of hosting platforms has become as a method of finding accommodation, it is reasonable to ask whether hosts should be subject to the same fair housing laws as landlords and hotels. As the author writes, this bill would do so:

By clearly defining that a listing on a hosting platform falls under the definition of a housing accommodation, the investigation of complaints will fall under the jurisdiction of the Department of Fair Employment and Housing. Thus, AB 1497 will codify current practice and empower the Department to continue investigating complaints.

As introduced, AB 1497 would amend the definition of “housing accommodation” to include housing offered through transactions facilitated by hosting platforms. In so doing, the bill would make clear that DFEH has jurisdiction over complaints of discrimination by hosts and that hosts can be sued for discriminating against guests, both prospective and actual.

This bill is necessary because DFEH’s jurisdiction in this area is still ambiguous. As the Assembly Housing Committee noted in its analysis of the bill: “The rise of online hosting platforms has created a circumstance where the same building can serve as a residential dwelling on some nights and a commercial hotel or inn on others. This has created a legal gray area when enforcement of anti-discrimination laws come into play.”

DFEH has brought an enforcement action based on at least one complaint against a host (in the Dyne Suh matter, described below). However, that matter quickly resolved with a settlement agreement. If a future investigation were to result in DFEH suing a host, any competent defense attorney would seek to dismiss the lawsuit by arguing that the agency had exceeded its jurisdiction, claiming that the current statutory and regulatory definition of housing accommodation does not encompass properties listed for rent on hosting platforms. AB 1497 anticipates this argument and would forestall it, by establishing that DFEH can exercise the full range of its authority to prevent discrimination by hosts and prospective hosts.

What is the evidence of discrimination by prospective hosts on hosting platforms? Hosting platforms inadvertently facilitate housing discrimination by sharing information (such as first names and optional photographs & personal information) about prospective guests with prospective hosts, and then, once a host has accepted a guest, by facilitating communication between the parties. These features allow hosts to discriminate on the basis of both perceived and actual characteristics. As one law review article describes:

Guests are encouraged by Airbnb to share information with their prospective hosts to increase their odds of acceptance …. While the racial salience of profile pictures is obvious, social science shows that race also can be inferred from a person’s first name or her unique background and interests. To illustrate: “Emily from Marin visiting for a spa weekend” presents as racially different from “Imani from Oakland visiting her cousin.” (Michael Todisco, Share and Share Alike? Considering Racial Discrimination in the Nascent Room-Sharing Economy (2015) 67 Stan. L. Rev. Online 121, 122.)

Several instances of racial discrimination by hosts have captured widespread public attention. One case vividly demonstrated how housing platforms facilitate discrimination by prospective hosts against prospective guests:

In March of 2015, Gregory Selden, a twenty-five-year-old black man from Virginia, was planning a trip to Philadelphia. He’d heard it could be cheaper to stay at someone’s house, through Airbnb, than to rent a hotel, so he created an Airbnb profile, with a photo and some basic details about himself, and sent an inquiry to a host whose place looked appealing. The host quickly wrote back: the accommodation was already taken for those dates. But Selden thought there was something strange about the exchange—for one thing, the Airbnb site described the place as available—so he decided to conduct an experiment. He created two fake Airbnb profiles, for white people named “Jessie” and “Todd,” and put in requests for accommodations at the same property over the same dates. Again, a reply arrived right away, but this time they were different: Jessie and Todd were welcome. (Vara, How Airbnb makes it hard to sue for discrimination (Nov. 3, 2016) The New Yorker, available at https://www.newyorker.com/business/currency/how-airbnb-makes-it-hard-to-sue-for-discrimination.)

Mr. Selden subsequently brought suit in federal court against Airbnb under the Fair Housing Act. Disquietingly, the case was forced into arbitration through application of the Federal Arbitration Act to Airbnb’s terms of service; its resolution is unknown. (See Selden v. Airbnb, Inc. (D.C. Cir. Feb. 2, 2017) 681 Fed. Appx. 1 [“The district court's order compelling arbitration and staying litigation pending arbitration is not appealable.”].)

Another high-profile case shows how discrimination can play out even after a host has accepted a guest’s reservation. A University of California, Los Angeles law student named Dyne Suh drove through a snowstorm with friends to an Airbnb listing that she had reserved in Big Bear, California. The prospective host, who had previously approved their stay, canceled Ms. Suh’s reservation once she and her friends reached Big Bear, texting “I wouldn’t rent to u if you were the last person on earth,” “One word says it all. Asian,” “It’s why we have trump [sic],” and “I will not allow this country to be told what to do by foreigners.” (See Wang, ‘One word says it all. Asian’: Airbnb host reportedly leaves guest stranded because of her race, Wash. Post (Apr. 7, 2017), available at https://www.washingtonpost.com/news/business/wp/2017/04/07/one-word-says-it-all-asian-airbnb-host-reportedly-leaves-guest-stranded-because-of-her-race/.)

Many more disquieting stories can be found by searching Twitter and YouTube for the hashtag #AirbnbWhileBlack.

Buttressing these real-life examples of discrimination is ample statistical evidence of discrimination by hosts on hosting platforms. Consider one leading study:

To test for discrimination, we conduct a field experiment in which we inquire about the availability of roughly 6,400 listings on Airbnb across five cities. Specifically, we create guest accounts that differ by name but are otherwise identical. Drawing on the methodology of a labor market experiment … we select two sets of names—one distinctively African American and the other distinctively white. We find widespread discrimination against guests with distinctively African American names. African American guests received a positive response roughly 42 percent of the time, compared to roughly 50 percent for white guests. […] Our results are remarkably persistent. Both African American and white hosts discriminate against African American guests; both male and female hosts discriminate; both male and female African American guests are discriminated against. Effects persist both for hosts that offer an entire property and for hosts who share the property with guests. Discrimination persists among experienced hosts, including those with multiple properties and those with many reviews. Discrimination persists and is of similar magnitude in high- and low-priced units, in diverse and homogeneous neighborhoods. (Edelman, et al., Racial Discrimination in the Sharing Economy (Apr. 2017) 9(2) American Economic Journal: Applied Economics 1, 2.)

This study also demolishes the idea, frequently bandied about, that invidious discrimination is unlikely to persist because discriminatory practices lead to lost profits and are therefore economically irrational. The authors write:

To explore the cost to a host of discriminating, we check whether each listing is ultimately rented for the weekend we inquired about. Combining that information with the price of each listing, we estimate that a host incurs a cost of roughly $65-$100 in foregone revenue by rejecting an African-American guest. (Ibid.)

Given robust evidence of pervasive, invidious discrimination on housing platforms, even despite the fact that such discrimination costs money to hosts, it would seem more than appropriate to outlaw this practice.

Why target individual landlords rather than the hosting platforms themselves? One question remains: given evidence, both anecdotal and statistical, that hosting platforms facilitate invidious discrimination, why not make the platforms themselves liable under FEHA? We are 50 years removed from (then-Professor, now-Judge) Guido Calabresi’s insight that the optimal tort liability regime is the one that assigns liability to the cheapest cost avoider—the party upon whom imposition of liability will lead to the greatest degree of safety and efficiency. (See Calabresi, The Costs of Accidents: A Legal and Economic Analysis (1970).) As deprivation of civil rights is a civil wrong, and therefore a form of tort, it would appear to make sense to use the law to force the hosting platforms to alter their practices in order to reduce or eliminate the possibility of invidious discrimination. This is especially true given evidence that individual host liability may not be an effective systemic deterrent to invidious discrimination. “[I]t has become clear that pursuing complaints against the thousands of discriminatory advertisers who use the internet expends an exorbitant amount of time and limited resources of non-profit fair housing organizations, federal, state and local government administrative agencies that process these complaints.” (National Fair Housing Alliance, Fair Housing Enforcement: Time for a Change (May 1, 2009) p. 32, available at http://nationalfairhousing.org/wpcontent/uploads/2017

/04/2009_fair_housing_trends_report.pdf.)

Unfortunately, any attempt to make hosting platforms liable under FEHA for housing discrimination could run afoul of preemption under Section 230 of the federal Communications Decency Act. Section 230 reads: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” (47 U.S.C. Section 230 (c).) “The touchstone of section 230(c) is that providers of interactive computer services are immune from liability for content created by third parties.” (Fair Housing Council of San Fernando Valley v. Roommates.com, LLC (9th Cir. 2007) 489 F.3d 921, 925, aff’d en banc (9th Cir. 2008) 521 F.3d 1157.) There are limits to the CDA’s preemptive effects; the law is “not meant to create a lawless no-man’s-land on the Internet.” (Id., at p. 1164.) But under current precedent, it would have to be established that the hosting platforms are participating to some degree in creating discriminatory content before CDA preemption could be avoided. AB 1497, by imposing liability on hosts, sidesteps the preemption issue and gives victims an avenue of redress.

To be clear, raising questions as to the deterrent value of making hosts liable for discrimination is in no way meant to diminish the worth of this bill. The value of individual justice in helping make victims whole again is profound and ought not be discounted in any way.

Evolving technology requires evolving legislation. It is the Committee’s hope that AB 1497 is the next in a long, proud line of California legislation, beginning with the California Fair Employment and Housing Act and the Unruh Civil Rights Act, both of 1959, helping to end the scourge of discrimination in housing.

Other Related Legislation. AB 446 (Choi, 2019), also pending before this Committee, would add victims of abuse, including domestic violence, elder abuse, dependent abuse, human trafficking, sexual assault, and stalking to FEHA’s protected categories.

AB 686 (Santiago, Chap. 958, Stats. 2018) enacted an obligation under California law for public agencies to affirmatively further fair housing.

SB 1092 (Monning, Chap. 113, Stats. 2016) required hosting platforms to provide a specified notice recommending that a person check their homeowners’ or renters’ insurance policies for coverage and restrictions before listing their residence for short-term rental on the platform website.

SB 1053 (Leno, 2016) would have amended FEHA to prohibit landlords from categorically refusing to rent to tenants who receive rental subsidies or assistance, such as federal housing assistance vouchers issued pursuant to Section 8 of the United State Housing Act of 1937. The bill passed out of the Senate Judiciary Committee, but was placed on the suspense file in the Senate Appropriations Committee, where it died.

SB 761 (Hall, Chap. 239, Stats. 2015) required hosting platforms to provide a specified notice warning tenants that their rental contract or lease might restrict their ability to list their residence on a hosting platform, and could result in legal action, including possible eviction.

SB 593 (McGuire, 2015) would have required hosting platforms to report to cities and counties (1) the address of each residential unit offered on the hosting platform and occupied during a quarterly period for tourist or transient use, (2) the number of nights the unit was so occupied, and (3) the amounts paid for occupancy. The bill passed out of the Senate Transportation and Housing and Senate Governance and Finance Committees, but was held by the author and died before it could be voted on by the full Senate.

AB 887 (Atkins, Chap. 719, Stats. 2011) added gender expression and gender identity to the protected categories enumerated under FEHA and other California anti-discrimination statutes.

SB 559 (Padilla, Chap. 261, Stats. 2011) added genetic information to the protected categories enumerated under FEHA and other California anti-discrimination statutes.

AB 3165 (Fenton, Chap. 992, Stats. 1980) enacted FEHA by combining and recodifying two existing statutes, the California Fair Employment Practices Act and the Rumford Fair Housing Act.

REGISTERED SUPPORT / OPPOSITION:

Support

California Hotel and Lodging Association.

Opposition

None on file

Analysis Prepared by: Jith Meganathan / JUD. / (916) 319-2334

Date of Hearing: April 10, 2019

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

ABPCA Bill Id:AB 1497 (

Author:Holden) – As Amended Ver:March 21, 2019

SUBJECT: Hosting platforms

SUMMARY: Adds housing offered on a hosting platform to the definition of housing accommodation in the Fair Employment and Housing Act. Specifically, this bill: Revises the definition of “housing accommodation” to include a building, structure, or portion thereof that is occupied, or intended to be occupied, pursuant to a transaction facilitated by a hosting platform. 

EXISTING LAW:

1. Defines a “hosting platform” mean a marketplace that is created for the primary purpose of facilitating the rental of a residential unit offered for occupancy for tourist or transient use for compensation to the offeror of that unit, and the operator of the hosting platform derives revenues, including booking fees or advertising revenues, from providing or maintaining that marketplace. “Facilitating” includes, but is not limited to, the act of allowing the offeror of the residential unit to offer or advertise the residential unit on the Internet Web site provided or maintained by the operator (Business and Professions Code Section 22590)
2. Pusuant to the Fair Employment and Housing Act (FEHA), declares it to be against public policy to discriminate on the grounds of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, or disability; and that every person has a civil right to be given the opportunity to seek, obtain, or hold employment and housing without facing discrimination based on these protected classes. (Government Code Sections 12920, 12921.)
3. Declares it unlawful for any housing accommodation owner to inquire about; make known any preference or limitation as to; discriminate; or harass a person based on the person’s race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability. (Government Code Section 12955.)
4. Provides under the FEHA that an owner may be subject to a civil penalty of up to $10,000 for his or her first violation of the FEHA. If it is the offender’s second violation within five years, a civil penalty may be assessed of up to $25,000. If it is the offender’s third violation within seven years, a civil penalty may be assessed of up to $50,000. (Government Code Section 12987.)
5. Provides under federal law that an administrative law judge may impose a civil penalty of up to $16,000 for a violation of a Fair Housing Act. If it is the offender’s second violation within five years, a civil penalty may be assessed of up $37,500. If the offender has violated the Fair Housing Act three or more times within seven years, a civil penalty may be assessed of up to $65,000. (24 C.F.R. 180.671.)

FISCAL EFFECT: Unknown

COMMENTS:

Purpose of the Bill: According to the author, “AB 1497 creates a clear designation for laws on discrimination for homes posted on online hosting platforms. This bill will codify the current practice and empower the Department of Fair Employment and Housing to continue their practices on investigating and handling complaints of discrimination.”

Background: Over the past 25 years, the development and growth of the internet has substantially increased access to information while decreasing transaction costs. This has facilitated the growth of the sharing economy in a wide variety of markets, including ride sharing, crowdfunded financing, and home sharing services. Home sharing services using online hosting platforms, such as Booking.com, AirBnB, and VRBO, have seen explosive growth over the past 10 years, and now include over 15 million listings worldwide, existing in almost every city and county.

Discrimination on Housing Platforms: Existing law, the California Fair Employment and Housing Act, prohibits an owner of housing from engaging in specific acts of discrimination against a person seeking to purchase, rent, or lease any housing accommodation. The Department of Fair Employment and Housing (DFEH) is responsible for enforcing this and other state fair housing laws that make it illegal to discriminate in all aspects of the housing business, including renting or leasing, sales, mortgage lending and insurance, advertising, practices such as restrictive covenants, and new construction. The law applies to landlords, real estate agents, home sellers, builders, mortgage lenders, and others. The law protects individuals from illegal discrimination by housing providers based on the following: age, race, color, ancestry, national origin, religion, mental or physical disability, sex, gender, sexual orientation, gender identity, gender expression, genetic information, marital status, familial status, and source of income.

The rise of online hosting platforms has created a circumstance where the same building can serve as a residential dwelling on some nights and a commercial hotel or inn on others. This has created a legal gray area when enforcement of anti-discrimination laws come into play.

This bill explicitly includes a home posted on an online hosting platform such as AirBnb or VRBO in the legal definition of a housing accommodation. In doing so, the law will clearly state that discrimination on online hosting platform is illegal and strengthens the Department’s authority in handling complaints. Currently, DFEH chooses to investigate complaints of housing discrimination registered against occupants that are making their homes available for rent via online hosting platforms. This bill codifies that current practice and empowers DFEH to continue investigating complaints.

Related Legislation:

AB 1727 Gonzalez(2016) This bill would have established rights for specified independent contractors to organize and negotiate with "hosting platforms" regarding specified subjects. This bill as held in Assembly Judiciary Committee.

SB 593 McGuire(2015) This bill would have required electronic “hosting platforms” to regularly report the addresses of, nights of use at, and revenues obtained by residences that were leased through the platform; prohibited the hosting platforms from offering properties if prohibited by law; and required the platforms to collect and remit any applicable transient occupancy tax if requested by the local government. This bill was placed on the inactive file in the Senate.

Double referred: This bill was also referred to the Assembly Committee on Judiciary where it will be heard should it pass out of this committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Hotel and Lodging Association.

Opposition

None on file.

Analysis Prepared by: Steve Wertheim / H. & C.D. / (916) 319-2085