The City began regulating short-term rentals in 2014, and the market has more than doubled since then. The intent of regulations was that homes should be used primarily for residential rather than commercial purposes, but the City’s current approach cannot assure this. Most hosts do not obtain the required permits: only an estimated 22 percent of properties are permitted, and the City rarely enforces its regulations. Despite concerns about the effect of short-term rentals on housing availability and affordability, the City does not collect data needed to regulate these rentals and to monitor the housing market.
In 2014, City Council changed the zoning code to allow hosts to rent their residences for short terms. Commonly, hosts and renters find each other using online booking agents, such as Airbnb, HomeAway or Vacasa. Before these rules were adopted, the City only regulated and taxed hotel, motel, and bed & breakfast rentals. The City’s short-term rental regulations require hosts to get a Type A or Type B permit depending on the size of the rental and follow certain restrictions:
- The host must occupy the residence at least nine months of the year
- The rental property must be the primary residence of the host
- A maximum of 25 percent of units in a multi-family building may be rented
- Rentals must be for less than 30 days
These requirements were intended to preserve the residential character of neighborhoods and to prevent commercial short-term rental activity. The Bureau of Development Services conducts home inspections before issuing permits to ensure the safety of visitors renting the units. Development Services also investigates complaints and enforces short-term rental regulations.
Hosts are required to obtain a business license from the Bureau of Revenue and Financial Services and pay City taxes and fees. Those taxes include the lodging tax also required of hotels, and a business tax if rental and other business income combined exceeds $50,000 per year. Recent changes to city tax codes also added fees specific to short-term rentals. Online booking agents may remit lodging taxes and fees on behalf of hosts.
We conducted this audit to determine the effectiveness of the City’s regulations, and how the City evaluates the effect of short-term rentals on housing availability and affordability.
View our audit report and recommendations
View highlights from the audit report
These data visualizations supporting our audit report show Airbnb trends over time, and listings on an interactive map:
View this dashboard more fully on Tableau's website.
View this dashboard more fully on Tableau's website.