Business & Economy

Local officials mourn stalled home-sharing bill

Local officials hoped a state law would have helped them collect taxes on Airbnb hosts.
Local officials hoped a state law would have helped them collect taxes on Airbnb hosts.

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City and county officials say they're losing out on a powerful tool to crack down on the practice of home-sharing now that a bill regulating the industry has stalled in the state Legislature.

The bill from Senator Mike McGuire, D-Healdsburg, would have forced home-sharing sites such as Airbnb and VRBO to hand over information about hosts and properties so local governments could identify which addresses were being used as short-term rentals. This would have allowed local officials to collect lodging taxes from property owners and cite those who are violating local zoning laws.

Dorothy Holzem of the California State Association of Counties, says municipalities are missing out on tax revenue that could be used for public services.
"It ensures services are available for visitors and residents alike — whether its emergency services, hospital care, public safety and even well-maintained street and roads," Hozlen said.

Currently, there is no system that ensures short-term rental hosts pay a lodging tax to their local municipality the same way hotels do. Since sites like Airbnb keep property addresses private, it is difficult for local officials to pinpoint who in their community is using their property as a short-term rental.

Airbnb fought the state measure on privacy grounds and enlisted its users to send emails to their legislators and testify at the state Capitol.

"We are glad that the California State Legislature decided not to move forward with burdensome restrictions after hearing the outpouring of concerns from tens of thousands of Airbnb guests and hosts," said David Owen, Airbnb's regional head of policy.

Los Angeles councilmember Mike Bonin said the data would have dovetailed nicely with a proposal he has authored to curb the number of short-term rentals in Los Angeles. That proposal calls for limiting the practice to properties that are an owner's primary residence. Bonin says a growing number of investors are exploiting home-sharing sites to convert large numbers of apartments into vacation rentals, which is depleting the city of its affordable housing stock for residents.

If his proposal gets approved by the city council, he said, it would be difficult to identify offenders without addresses. 

"Absent that information, really enforcing anything at the local level is extremely difficult," Bonin said.

Despite the added teeth of a state law, Bonin said he still plans to push home-sharing regulations in L.A.

Last month, the Santa Monica city council approved an ordinance that only allows short-term rentals when a host stays on the premises with their guest. The ordinance also includes language that orders Airbnb to provide Santa Monica with data, such as addresses and length of stay, so that local officials can cite and fine offenders. Airbnb opposed the ordinance, also due to privacy concerns.

Sen. McGuire said he would bring the state bill back to the state Legislature in January of 2016.