At the start of the year, one of the Better Condo Life predictions was that the controversies surrounding short-term rentals like Airbnb and VRBO would start to get settled by the end of 2017. A little more than halfway through the year, there has been a substantial amount of activity in a number of different cities and states. To catch you up, here your first half 2017 Short Term Condo Association Rental News.
Greg Bensinger, Wall Street Journal, 5/1/17
As featured in the May News Roundup, the city of San Francisco settled a major lawsuit with Airbnb and Homeaway. This settlement included automatic registration of properties via the services, as opposed to putting the registration onus on individual owners. This compromise cleared a major hurdle in the legality of these short-term rental services in San Francisco.
The Post and Courier, 7/25/17
The upcoming solar eclipse has created a short-term rental boom in the city of Charleston, South Carolina. The city allows a limited area to offer up their homes on the short-term rental market. However, the fines for violators outside this area are relatively low, and enforcement is lax. The city recently filed a lawsuit against one of the many illegal listings in advance of the eclipse-driven boom, likely to try to discourage other illegal postings.
Julia Marsh, New York Post, 5/15/17
Also featured in the May 2017 Condo News Roundup, while San Francisco was settling, NYC has been suing. The city levied a $1.2M lawsuit against a property owner who had repeatedly defied the city and listed their property.
News Related to Short-Term Rental Taxation
Annalise Frank, Crain’s Detroit Business, 6/8/17
As featured in the June 2017 Condo News Roundup, the state of Michigan agreed to a very large deal with Airbnb. Under this agreement, Airbnb will pay a 6% tax to the state for anyone utilizing the service. Michigan has been promoting tourism initiatives heavily, and this agreement will help provide revenue to the State’s tax coffers.
HB 4503 AND SB 329: Recent Skirmishes Regarding Short-Term Rental and Their Effect on Community Associations
Matthew Heron, Michigan Condo Law Blog, 7/13/17
However, a follow-up article by the Michigan Condo Blog, covered in the July 2017 Condo News Roundup, noted that there were some gaps in how this deal was hammered out. It did not address the local or municipal level. This creates issues because the zoning of a property – residential or commercial – can potentially impact whether or not short-term rentals are legal. Resolving this discrepancy will likely be a focus of Michigan legislators in the near future.
Arlene Satchell, Sun Sentinel, 6/27/17
Broward County, Florida, is another jurisdiction where Airbnb has an arrangement to pay hotel taxes like a normal property. Their first installment was a whopping $191,000. According to the article, as of June 1, over $14 million was paid across the state of Florida in hotel taxes by Airbnb. Such a revenue source likely means Airbnb and other home-sharing services are going to stick around in Florida. Further, it gives the state no excuses to be lax on enforcement – there is plenty of revenue to ensure that such property are well-regulated.
Articles Related to Governance
CTV Vancouver, 1/13/17
Back in January, Vancouver was called out for doing very little to enforce rules related to Airbnb. Numerous complaints were levied by city residents, but apparently the city did not follow up on them. Cities like Vancouver need to step up their game and be more proactive like other jurisdictions such as San Francisco, New York, or Florida.
There is quite a bit going on when it comes to Short Term Condo Association Rental News. Most telling is that there are two states – Michigan and Florida – which are embracing the service and the tax revenue it brings. Such actions seem to indicate acceptance that will continue to impact Condo Associations. Other cities, like New York City, and to a lesser extent, Charleston, South Carolina – are fighting back. Regardless of where you live, make sure you have thought about policies for how you will deal with short-term rentals in your community.