New Zealand is far from the only country still learning how to deal with the rise of short-term accommodation.
In New Zealand, Queenstown and Auckland are the front-runners in passing legislation to deal with Airbnb. Both cities are trying their hand at combating the wave of short-term accommodation properties.
As of March this year, Queenstown introduced new taxes on short-term accommodation properties. Any new ‘residential visitor accommodation’ must now obtain resource consent. Furthermore, the new rules require operators to notify QLDC of a new short-stay accommodation prior to commencing, with May 7 the last day for those who made a submission to appeal the new rules in the Environment Court.
Comparatively, in Auckland, residential properties that are leased for more than 28 days of the year are required to pay a percentage of the Accommodation Provider Targeted Rates, on top of residential rates. For example, those who lease their residential property for over 180 days a year are categorised as commercial providers and are obliged to pay the full targeted rate. with the money going towards Auckland Tourism, Events and Economic Development (ATEED). These rates were previously only charged to traditional accommodation providers like hotel operators.
While it’s a completely different situation for every city – factors like occupancy rates and hotel supply matter – every popular tourist location has had to learn how to regulate short-term accommodation.
While the success of these legislations and regulations is still open for debate, looking at some of the world’s biggest tourism destinations which deal with the Airbnb issue in different ways helps to understand all the options and their pros and cons.
Barcelona has had some of the worst issues with short-term rentals. A University of Lisbon study in 2015 showed that 9.6 percent of all homes in Barcelona’s Old Town were listed on Airbnb, and in the town’s Gothic Quarter suburb the ratio increases to 16.8 percent. Of the 42 locals interviewed in the study, 40 listed issues of displacement including tenant expulsions, harassment, and daily disruptions.
In May last year Barcelona City Council demanded Airbnb remove 2,577 listings operating without a city-approved licence or else face a hefty fine. The threat is certainly back up; in 2016 the Council hit Airbnb with a €600,000 fine (approximately NZD$1,000,000) for continuing to list unlicensed apartments, followed by a €30,000 (NZD$51,000) fine the following year.
The same month, Barcelona came to an agreement with Airbnb to share data with officials about the property’s being listed around town. It means officials can refer to host data to see precisely where apartments are located, who the hosts are, and track the host’s ID to verify if the apartments have permission to operate and pay the appropriate tax.
The city’s tourism plan specifies that apartments used as short-term rentals must pay the highest rate of property tax, like hotels. Investigations following this have resulted in over 1,500 unlicensed apartments being delisted, and the city is now no longer issuing new licences.
San Francisco was among the first cities to take on Airbnb. Beginning in 2014. The city passed a law which limited home rentals to 90 days per year, although owners were allowed to rent them year-round if they still lived in the premises.
In 2015, the city cracked down further on short-term home rentals, introducing strict home-rental laws which enforced all Airbnb hosts in the city to officially register to the Office of Short-Term Rental.
“This agreement helps protect the city’s precious housing supply by obligating these companies to ensure that all their listings are legal and properly registered. This is a game-changer,” said Dennis Herrera, attorney for San Francisco City at the time.
“The settlement ensures that the two largest rental platforms in San Francisco will only include legal listings. It also guarantees that enforcement with real teeth begins in short order.”
Nearly $1 million of fines were issued, and Airbnb counteracted with a lawsuit, but both sides settled, and the end-result was Airbnb could register hosts itself.
As a result of the system, Airbnb has removed over 4,760 listings, and its property count in San Francisco dropped from over 10,000 to just over 5,500. Comparatively, there are over 65,000 Airbnb listings in Paris. While Paris also has begun regulating registrations and limiting rentals to 120 days per year, without big fines Airbnb operators are continuing as usual.
Hawaii is currently in the middle of a heated debate over short-term rentals, with lawmakers deciding on appropriate taxes and regulations.
In Hawaii, a county-issued permit is required to operate a short-term rental property. However, many of these properties are starting up without permits and are growing rapidly. Data from the Hawaii Tourism Authority showed short-term rentals increased by 5,716 units between 2013 to 2017, whereas just 942 hotel rooms were added during the same period.
The State is considering introducing a bill that would require Airbnb to collect and pay taxes on behalf of short-term rental hosts, supported by the Hawaii Lodging and Tourism Association.
In February, a judge denied Hawaii access to Airbnb’s decade long rental receipts in the region. Hawaii sought the receipts to prove that the short-term rentals were paying taxes.
Airbnb argued that it would be a massive intrusion into the private data of over 16,000 guests. According to Hawaii, Airbnb acknowledged that its hosts have not paid all their taxes in the past, but the judge found little evidence suggesting that.
The end goal for all city, district, and state councils is to make sure Airbnb is operating in a way that is regulated and does not negatively affect other commercial accommodation operators. Barcelona is the glowing example of this, as despite introducing more legislation and fining Airbnb, it still has over 9,000 listings on the app.
San Francisco comparatively took a more hard-line approach, resulting in the loss of almost half the city’s listings, and hefty fines for the individual properties. Hawaii alternatively is still on the precipice of handling its own short-term rental crisis, showing that even the long-established tourist locations haven’t solved the problem.