Airbnb has reportedly dropped its lawsuit against New York State but will proceed with its filings against New York City. Airbnb was previously said to be negotiating with the city to settle the lawsuit filed against them. The company has decided not to drop its suit against New York City because of Governor Andrew Cuomo’s new legislation.

Gov. Cuomo’s legislation intends to fine hosts up to $7,500 for advertising short-term rentals. Since 2010, it has been illegal to rent space for less than 30 days in multi-unit buildings in New York City. Airbnb believes that their site is being targeted with this new legislation. New York City is one of Airbnb’s biggest markets and the new law could greatly affect business.

While the law is said to target hosts illegally rent their space in multi-unit buildings, Airbnb feels it could affect their business. Violators would be using Airbnb’s site to break such a law. There are concerns that Airbnb could be responsible for some of these costs. As a result, Airbnb believes the law is vague with its wording. In a statement, an Airbnb spokesperson said:

“We have long sought to work with leaders in New York on clear, fair rules for home sharing and we’re continuing to do all we can to protect the thousands of middle class families who depend on home sharing to earn a little extra money.”

The company also stated that the bill will hurt many families who depend on the home-sharing business for extra income. Mayor Bill de Blasio’s spokesman said that their focus has and continues to be on operators of illegal hotels, not individuals. New York legislators argue that the fines are necessary for protecting housing prices.

New York City officials are scheduled for a hearing regarding the law’s regulations and how they will affect Airbnb on Dec. 17.

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