How do cities around the world regulate Airbnb?

Airbnb has become a global ‘go-to’ for short term accommodation. The peer-to-peer room sharing website has impacted short term-rentals in many cities around the world, and here in New Zealand it seems to be causing problems too.

We’ve seen first-hand how Airbnb can affect landlords, and believe there needs to be regulation in place around services such as Airbnb to reduce stress on our already tight market, and ultimately lower the average cost of rent.

Looking at various cities around the world for evidence, we can see the impact regulation on Airbnb has had on the housing market.

San Francisco

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Following a settlement agreement between the City, Airbnb and Homeaway, San Francisco has purged thousands of illegal short-term rental listings.

Prior to this, those who wished to rent out their homes for shorter than 30 days on sites like Airbnb had to register with the City. But in early 2015, short-term rentals were legalised – which meant registering and enforcing these was a challenge.

But, under the settlement agreement, Airbnb agreed to remove all listing from the site that were not registered, as well as deactivate illegally listed properties when notified.

The purge gave hosts a deadline to either obtain city approval, or at least apply for it. In the first day, 2,000+ short-term rental listings were removed from Airbnb. This has resulted in greater rental stocks becoming available for long-term tenants.

Following this purge, city officials continue to ensure listings are registered, and are sent monthly updates from Airbnb.

Toronto

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While acknowledging that short term rentals have a place in Toronto, the City has also recently put forward bans and regulations to regulate the short-term rental market, and platforms such as Airbnb.

One of the major changes is that hosts are limited to only renting out their own home, whether that is the entire home, or just a room. However, if renting out the entire home, hosts can only do so for 180 days per year.

They are no longer eligible to rent out their secondary homes short-term. The city would like to see these secondary homes on the long-term rental market.

Alongside these changes to the hosts, short-term rental platforms like Airbnb will have to pay a one-time fee of $5000, as well as $1 per night booked for every property leased short term.

Paris

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Just last year, Paris placed a cap on how many nights a host can rent out their home on Airbnb.
Hosts now have a maximum of 120 nights per year that they can rent out on Airbnb. On their homepage, hosts will have a countdown showing how many nights they have remaining.

Like other cities around the world, as a host wanting to rent out your home, you also have to register with the city. This helps the city keep control of how many current short-term rentals are available.
 

Seattle

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In order to preserve the rental stock, Seattle brought in a number of regulations such as taxes and special licenses late last year.

As a short term rental operator, you must pay tax for each night you rent out your home, or a room in your home. If you rent out an entire unit, you pay $14 per night in tax, and for renting out a small part of your home e.g. a bedroom, the tax will cost you $8 per night. It is estimated that these taxes will bring in $7 million annually.

As well as paying these taxes, you must obtain a special license that allows you to be a short-term rental operator. Each host is also limited to the amount of units they can rent out. The new rules limit hosts to two dwelling units each. These regulations also require short-term rental platforms, such as Airbnb, to obtain a special platform license to facilitate bookings in Seattle.

 

While these regulations are newly introduced, we will be keeping a close eye to see how these develop in each given city. Introducing limits on days per year, as well as registering with the city seems to be an interesting to monitor income and increase the number of rental stock, ultimately reducing the average weekly rent.

 
Nick Phillips