Regulating Airbnb and Other Shared Rentals

Airbnb allows users to browse through thousands of short term rentals.

Airbnb allows users to browse through thousands of short term rentals.

San Francisco is on the cusp of adopting a series of new laws aimed at curtailing the use of short term rental web sites like Air Bnb. These sites allow residents to host guests at their property on a short term basis in exchange for money, much like a traditional bed and breakfast. Hosts and guests communicate via an online marketplace of available rentals, that vary in shape, size, and cost. However, through the use of platforms like Air Bnb, these short term rentals are largely unregulated, don’t pay local lodging taxes, and potentially remove units from the permanent housing stock in the midst of a severe statewide housing crisis.

San Francisco originally passed legislation to address the impacts of the widespread use of platforms like Air Bnb, and even Craigslist last year when they attempted to create a city wide registry of short term rentals. However, the San Francisco Planning Department has since stated that any compulsory registration law for these units is simply unenforceable without penalties, and a platform centric approach to regulation.

Last summer Air Bnb responded to the initial calls for regulation by having San Francisco hosts pay the 14 percent hotel tax starting. They have also published an economic report claiming that Air Bnb guests contributed close to half a billion to the San Francisco economy last year.

These beginning moves to regulate short terms rentals are extremely important, as many metropolitan communities around the world begin to asses how to approach the influx of unregulated products and services that are considered part of the “sharing economy”. What Uber is to the taxi industry Air Bnb is to the lodging industry: decentralized, tailored to the needs of individuals, and largely frictionless from a user’s perspective.

The new San Francisco proposals include capping the number of days a single unit can be rented out to 120 days per year, creating a new Office of Short-Term Rental Administration and Enforcement that will be staffed by the Planning Department requiring hosts to come to the department to register in person, and create a mechanism by which neighbors of hosting properties can complain if either the guests or hosts are violating city law.

This approach stands in contrast to the approach taken by other cities, chief among them being Portland, which has begun facilitating voluntary programs that leverage cooperation with hosts. Airbnb has even gone as far as to declare Portland their first “Shared City”, meaning that they will work to: make it easy for Portland hosts to donate to local causes and will match donations with a percentage of its fees, make free smoke detectors and carbon monoxide detectors available, and collect and remit taxes for Portland hosts, market Portland and its small businesses, among other duties.

Whatever the decision in San Francisco, the result is sure to influence other cities. Should Airbnb units be subject to a cap on rental days? Should they be required to register with the city, even if they already pay taxes via the Airbnb platform? Should the city work with Airbnb in a public/private led effort to promote greater usage of Airbnb rentals? Vote and comment below.

Cap the Number of Days an Airbnb Rental can be Rented Out at 120 per year.

This initiative would cap the number of days an Airbnb rental unit can be rented out per year at 120.

Create a new Office of Short-Term Rental Administration and Enforcement to Regulate Airbnbs and other short terms rentals

This would create a new city office, managed by the planning department, that would be charged with regulating all short term rentals within the city.

Implement a “Shop Local” Campaign aimed at Airbnb guests within the City

This initiative would fund the salary of a half time staff person to help implement a “shop local” promotional campaign targeted toward Airbnb rentals within the city.

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  1. […] Regulating Airbnb and other Shared Rentals […]

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