USE of Airbnb by business travellers grew by an eye-popping 249% last year, as they and their employers have become more comfortable with sharing-economy alternatives to hotels. But future growth is under threat from new laws, at least in certain American cities.

New York and San Francisco have, by some measures, the most expensive housing in America. So it is no surprise that they are at the centre of the legal fight against Airbnb and its like. Illegal rentals, they argue, mean fewer apartments on the market, which keeps prices high and makes it harder for low- and middle-income residents to live there. Both cities have passed or are considering laws that could drastically reduce the number of Airbnb properties that are available.

In San Francisco, Airbnb’s hometown, the firm agreed last year to require people who rent out their entire homes to register with the city, and to cap the number of people who can legally do so. But only about one-fifth of the hosts who are supposed to register have actually signed up. And so the city decided to apply pressure,...Continue reading