Airbnb to start paying hotel taxes in two west coast cities

Apr 4, 2014


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On 24 March, we reported on the impact of tourist rentals on San Francisco’s housing market. The rapid and massive growth of online brokers like Airbnb--a company now worth 10 billion dollars--has transformed the way landlords and even renters use their spaces. More than 75 hundred units are available for short-term rentals in the city, and more and more of these are exclusively used for tourists. That means these apartments are taken off the rental market.

We spoke with Ted Gullicksen, head of the San Francisco’s Tenants Union, who noted, "It’s illegal but they’re getting away with it because nobody’s enforcing the laws regulating the tourist conversions."

Things have started to change. Airbnb announced, on 31 March, that it would start paying the Transient Occupancy Tax--or hotel tax--in two cities: San Francisco and Portland.

That means, in those cities, Airbnb will add a 14% surcharge to guests’ bills. That fee used to be up to the landlords to pay--and enough weren’t that it’s been estimated San Francisco was losing 2 million dollars a year in tax revenue from Airbnb alone.

In a blog post on the company’s website, Airbnb stated that while it doesn’t believe its hosts are the same as hotels, the company wants to be in compliance with city rules.

Airbnb did not respond to our requests for an interview.

San Francisco Board of Supervisors President David Chiu is working on legislation to further regulate the industry. His office told us they’re happy that Airbnb has changed its policy, but Chiu wants to limit tourist rentals to owner-occupied or renter-occupied properties.

He expects to announce his bill next month.