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Cities all over the U.S. are implementing serious measures to crack down on illegal short-term rentals. San Francisco, in particular, has taken the spotlight when it comes to enforcing strict regulations against home-sharing sites like Airbnb. However, San Francisco is definitely not the only the city that has seen tremendous legal backlash against the home-sharing economy. Here are four cities that have recently imposed restrictions on the legal frameworks surrounding short-term rentals. 

San Francisco, CA

San Francisco, headquarters to the home-sharing giant Airbnb, has been really laying down the law on short-term rentals over the past few years. In addressing the current state of SF’s increasingly competitive real estate market, Airbnb is starting to work closely with the city to ensure people abide by these rules.

First of all, short-term rentals are allowed in the city. You can rent out your entire apartment for up to 90 “unhosted” nights a year. In other words, you’re allowed to host for up to 90 days a year if you’re not planning to stay in your apartment while your guests are present. However, if you’re planning on being present, aka “hosted rentals”, you’re allowed to rent out part of your unit, i.e. a single bedroom, for an unlimited number of nights per year.

Before even thinking about renting out your unit, there are a few legal and administrative procedures to take care of:

1. First, you must register as a business.

You need to obtain a Business Registration Certificate from the Office of the Treasurer & Tax Collector for your unit before you can even become a certified host. This Certificate costs $91, which you must pay through the City of San Francisco.

2. You must become a certified host

You can become a certified host by getting a Short-Term Residential Rental Certificate from the Office of Short-Term Rentals. Your certificate number must be posted on all listings that advertise your short-term rental, and you are only allowed to list your unit after receiving this certificate. The Certificate registration fee is $250, which is non-refundable. In order to maintain an active status on your Certificate, you must renew your registration every two years.

3. You must meet the Primary Residency Requirement.

Prior to registering your unit, you must meet the Primary Residency Requirement, meaning that you must actually be the permanent resident of the unit you want to rent. To do this, you must spend at least 275 days a year living in your unit or 75% of the days if you haven’t lived there for a full year yet. If you are a new resident, you must have resided in your apartment for at least 60 consecutive days before applying to register your unit.

4. You need to pay a SF Transient Occupancy Tax

Guests who book Airbnb listings of fewer than 30 days are also required to pay a San Francisco Transient Occupancy Tax of 14% as part of their reservations. Lastly, hosts must also ensure their properties have a liability insurance of at least $500,000 (this part is covered if you host with Pillow!)

Los Angeles, CA

Los Angeles is also still trying to figure out ways to regulate the home-sharing market, frequently changing its laws to balance the concerns of both short-term renters and angry neighbors. The rules of acceptable short-term rentals in LA are still somewhat unclear for many folks, especially if they live in a residential neighborhood.

Hosts in LA are allowed to rent out their primary residences, defined as residing 6 months a year, as long as they have a valid Home-Share Registration with the city. Hosts must file an application with Department of City Planning, however, before this, they also need to obtain a Transient Occupancy Registration Certificate from the Office of Finance. After being approved, hosts are able to list a total of 120 “unhosted” nights per calendar year and are required to display their Home-Share registration number on all of their listings.

One other important law to look out for is that short-term rentals in rent-stabilized units are strictly banned under the Rent Stabilization Ordinance (RSO). This is what makes it exceedingly difficult for hosts in LA to ensure that their Airbnb properties are legal, as rent-controlled units make up around 85% of the rental housing stock in LA. Lastly, hosts must require guests who book their listings to pay a LA Transient Occupancy Tax of 14% as part of their reservation.

Denver, CO

As of July 2016, property owners and residents can apply for a short-term rental license to rent out their primary residences within a residential zone. Under the D.R.M.C., the City and County of Denver requires Airbnb hosts to obtain a STR license as well as their landlord’s written permission to host short-term rentals. While there are no specific limitations on the number of days a resident can rent out their apartment units, there are a few requirements that the host must fulfill to qualify their units for compliant home-sharing:

1. You must have a Lodger’s Tax ID

First of all, the host needs to get a Lodger’s Tax ID for which the fee is $50 and must be renewed every two years. The Tax ID stipulates that hosts are responsible for collecting a Lodger’s Tax of 10.75% from all guest reservations under than 30 nights.

2. You must have STR Business License 

The hosts must obtain a STR Business License, which has an annual fee of $25. Hosts must list the Business File Number (BFN) on all online listings of their apartment unit.

3. You must have property liability insurance 

Hosts must also verify that their rental properties are insured under by a general liability insurance in order to receive the STR license.

4. You must adhere to the Denver Zoning Code

Lastly, when actually hosting short-term rentals, hosts must adhere to the Denver Zoning Code, specifically Text Amendment #8, which states that short-term rentals cannot be used for commercial events, and that only one rental contract is allowed at any given time, among a number of other ordinances.

Austin, TX

Airbnb is the subject of much legal backlash in Austin as large numbers of people have been complaining that residential apartment complexes are turning into commercial hotels. As a result, Austin City Council has imposed a few city-specific regulations on short-term rentals.

Short-term rental operators must now obtain an operating license. Obtaining an operating license can be a complicated process – you need to submit a proof of property insurance, a proof of payment of City of Austin Hotel Occupancy Taxes, and a certificate of occupancy, to name a few. The application for the license requires a non-refundable fee of $443. Furthermore, the City Council prohibits the advertising of unlicensed short-term rentals, and requires that tenants pay for and renew short-term rental license every year to host on Airbnb legally.

 

Stay on Top of Your City’s Regulations!

As hosts, it’s extremely important to be on the lookout for your city’s local regulations and take the steps necessary to abide by those rules. More often than not, short-term rentals are only allowed if you are registered with the city and have a valid license or certificate, which must be renewed every so often.

Moreover, even if you are eligible for home-sharing in your city, you must also be in compliance with the specific terms your landlord has set for your building. Failing to do so can result in eviction or more serious legal consequences. Luckily, Pillow solves this problem by creating tailored lease addendums that work for both residents and building owners. In fact, with Pillow’s recent partnership with Airbnb, we are able to effectively assist you in hosting compliant, 100% legal short-term rentals backed by your landlord’s’ full support.

As building owners, it’s also in your best interest to be aware of unregistered hosts who may be secretly renting out your units. You can rely on Pillow to ensure that your residents are honoring your lease agreement and in compliance with city regulations. We also provide all information about hosting activity in your building, including resident and guest profiles, which allows you to see which of your residents are hosting short-term rentals at any given time!

 

Written by Harry Lee · November 9, 2017

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