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2014New York City, San Francisco or Grand Rapids – Which Has the Best Airbnb Solution?
In the ongoing world-wide saga of Airbnb and other home sharing phenomena, cities are finding ways to protect neighbors, guests and the new online share economy businesses. Here are examples of what is being done.
SAN FRANCISCO VS. AIRBNB
According to TechCrunch, on 10/7/2014 the Board of Supervisors in San Francisco meets to vote on regulations for Airbnb type rentals. Here’s what is being proposed:
- Only 90 days a year can be rented out in non-hosted units.
- Hosts have to register publicly with city planning and pay $50 annual fee.
- Hosts have to pay hotel taxes, which Airbnb will remit on their behalf.
- Must have liability insurance of at least a half million dollars and follow building safety-codes.
- Abide by rent-control laws, cannot charge a rate higher then their own rent.
- Violations receive penalties and could be charged up to $1,000 a day.
UPDATE: The San Francisco Board of Supervisors passed the ordinance for short term rentals making Airbnb legal in San Francisco. According to BloombergBusinessweek Airbnb was spared from having to pay back taxes in the deal. But, as many as one third of the current listings on Airbnb will be illegal come February under the new restrictions.
GRAND RAPIDS STARTS A CITIZEN’S TASK FORCE AND SPENDS A YEAR TO FIND AIRBNB SOLUTION
This review of the City of Grand Rapids’ process was sent to us by Linda Singer in a reply to our story on the $1Million fine with which Sydney, Australia officials threatened homeowners.
“Grand Rapids where I live and where Michigan Lake to Lake B&B Association is headquartered, just passed an ordinance regulating ‘home sharing’. Popularly and erroneously called “airbnbs,” these entrepreneurs must now:
- Obtain one of a limited number of licenses in the “home occupation” category to operate, which involves meeting fire, safety and health codes.
- They must provide dedicated off-street parking.
- Are limited to one room and two adults.
- Neighbors are notified of the issuance of the license.
- If a homeowner wants to rent out two or more rooms, they are welcome to pay the freight to obtain licensing as a B&B.
“Enforcement is via monitoring of Airbnb.com and other such websites. Creating and passing the ordinance took nearly a year of democratically-contentious debate and involved creation of a citizen’s task force and numerous public hearings. Hats off to Grand Rapids for protecting the spirit of free and fair enterprise by ensuring a level playing field for all in the lodging industry,” reports Linda Singer.
NEW YORK STATE LEGISLATURE MAKES “ANTI-AIRBNB LAW
Before Airbnb, I remember renting an apartment for 5 days from a short term NYC rental agency called Urban Ventures. There were no available B&Bs when we were promoting our Bed & Breakfast and Country Inns guide at a convention there, so with the rental we enjoyed living in a neighborhood and feeling a little like New Yorkers as we walked to the local bakery, commented on the early morning dog walkers and joggers and greeted the building’s concierge.
In a recent article by The Enoch Times, entitled Casualties of the Airbnb Wars, the New York State Legislature got involved, making it illegal to rent out rooms in residential buildings for fewer than 30 days unless the host was also living in the unit.
“The law was designed to expedite the prosecution of illegal hotels—residential units clandestinely operated for short-term rental that dodged taxes and safety regulations, a practice made easy by apps like Airbnb—but it inadvertently undermined long-standing businesses like NY Habitat, which rented out many units for less than 30 days….Although widely referred to as the illegal-hotel law, the short-term rental restrictions introduced in 2010 were effectively an anti-Airbnb law.
Airbnb has been charged with “reducing the affordable housing supply in New York City.” Collateral damage has destroyed long-standing rental businesses like Urban Ventures as well as traditional bed and breakfasts.
Now in NYC, an anti-Airbnb coalition launched the ShareBetter initiative in early September, a $3 million campaign set on driving Airbnb out of New York City with the stated goal of “saving the city’s thin stock of affordable housing.”
Also see, “The Dumbest Person in Your Building” New York Magazine.
Which city do you think is closest to a fair decision?
Has your town come up with a unique solution?
What do you propose?
Bed and Breakfast owner
The article you refer to about NYC is in the Epoch Times ( not Enoch)
There was also a story in Crains NY Business the week before: http://www.crainsnewyork.com/article/20140921/HOSPITALITY_TOURISM/140919814/bb-be-gone
There are a few things that surprise me about the simplicity of your story. No one can properly compare those other 2 cities to New York City which has 8 million people and 52 million visitors per year. One can barely walk on the streets of NY anymore without being run over by suitcases. The law was NOT created to stop AirB&B, while it does make the vast majority of their rentals illegal, it was created to stop landlords of large buildings (sometimes 200 or more apartments) from renting their units out nightly instead of monthly. This was rampant when the law was passed, tourists and tenants were mingling together in large, often low income buildings. People with children and elderly folks were forced to live along side strangers. These egregious landlords were also stuffing bunk beds in to fit more tourists in one room, a fire hazard for sure. Meanwhile, those same units were now off the market for the low income folks who needed housing. This was 2006 and 2007 when the law was being drafted. In 2010, when it was passed, AirB&B hit the scene and actually made things even worse by allowing tenants to get in on the act and profit from their empty apartments or rooms at the owners expense. It is virtually impossible to enforce the laws that are already in place. There are 19,000 apartments listed in NYC on AirB&B. I don’t have a solution, I am merely pointing out some facts that are important to the big picture.
I am surprised that a story on “I Love Inns” seems to be less concerned about the actual Bed and Breakfasts that have gone out of business and been fined than they are about the vacation rental sites. While we all have suffered because of the greedy slumlords and AirB&B, the small B&B’s had much more at stake since they were/are much smaller businesses and have less $$ to loose. Anyone who wishes to know more can go to http://www.staynyc.org
Judy Hotchkiss
Grand Rapids seems to have taken a rational approach to finding a solution. I’m in Tennessee where the B&B law covers ALL short term rentals. So, the “solution” is that ALL SHORT TERM rental owners (under 90 days) get a B&B license.
That license requires a health dept. inspection twice a year (at the option of the local inspector in some locations. There is still a fee to be paid.). It limits meals to breakfast. It requires (triggers the requirement for) a business license and the collecting of sales tax and hotel tax (if any) in the city and town where the property is located. A tax on the property used to do business is charged.
It does not exempt anyone. I have always felt that this was a fair playing field for all involved. As a result, EVERY guest pays the sales tax (and hotel tax, if any). EVERY property is inspected for cleanliness, fire and food safety. Nobody cheats. Everyone is welcome (if zoning permits–although there is little in the way of zoning in many parts of this state).
The ONLY fly in the ointment is that Airbnb has NOT be interested is placing a sales tax line item on its forms, along with cleaning and pet fees. How is this so hard? Their website is good and technologically advanced. This should be a small thing. Why not HELP their clients fulfill compliance?
I’ve said this before: Companies like AirBnB need to grow up and behave like the big corporations they are. That goes for homeowners, too. The little “cheat on the taxes, rent a sofa bed and pocket the cash” gig is simply not appropriate for what is happening.
Disclaimer:
I own Prospect Hill B&B Inn, Mountain City TN http://www.prospect-hill.com and formerly owned Oakwood House, Atlanta, GA. I’ve always been licensed. I use various forms of advertising and that might include AirBnb or similar, but NOT if I can’t meet my obligation for licensing and taxation. These are requirements today. IF you don’t like them, work to get your municipality to suspend them.