"U.S Cities That Have Limited Airbnb Operations
New York City is the largest tourist destination in the U.S. and the leading market share for Airbnb. The city has raised concerns that two-thirds of the rental listings on Airbnb are illegal. To curb this trend, NYC introduced laws that necessitated Airbnb and other home-sharing companies to provide details of all rental units in their database. However, Airbnb challenged this policy in court, citing violation of privacy.
San Francisco, which hosts Airbnb, has also implemented even more stringent laws than those in NYC. Only full-time residents can list their units with Airbnb. This policy has helped them see a significant decline in Airbnb rentals.
Moreover, the hosts must register their units with the city officials to facilitate licensing. Those found in violation of these policies have to pay huge fines depending on the number of days rented.
Santa Monica in Southern California has instigated even stricter measures than those in San Francisco. The rules have seen the delisting of 80% of vacation rental units on the Airbnb website.
The laws obligate the host to be living in the residence during the vacation renting. The host must also register with the city officials and remit 14% occupancy tax. These measures have been in effect since 2015 and have adversely affected Airbnb operations in Santa Monica.
Should a City Ban Airbnb?
Local governments have an obligation to safeguard and protect the interests of the public. Through regulations, they can decide whether or not to ban the operations of any company. However, companies also have rights that local governments ought to uphold.
Before banning a company, the adverse effects need to surpass the greater good. Local governments should weigh the benefits a company has against its harmful effects. They also need to look further and see if these adverse effects can be mitigated."
So, the answer is that it(banning STRs) can, and has been done.
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