Months before Pope Francis’ visit will bring thousands of short-term visitors to Philadelphia, officials are moving to tax homeowners who rent out rooms using web sites such as Airbnb.
The Nutter administration has authored a measure that for the first time applies the city’s existing hotel tax to Airbnb-type rentals. Airbnb allows homeowners to easily rent out rooms or floors, or even entire homes, and right now that tax is not being charged.
Introducing the measure on the mayor’s behalf is councilman-at-large Bill Greenlee. “These things have really sprung up, not just in Philadelphia, but all over the country,” he told reporters this morning. “And they’re pretty m unregulated. And particularly now, with the pope coming and the DNC and other things happening in Philadelphia, a lot of these rentals are generating a lot of income. And it just seems fair that the city would get its fair share of the money that’s coming in.”
Under the measure, homeowners who rent out rooms would have to pay to the city an 8.5-percent tax on that rental income. And any owner who rents out for more than 31 days a year would also need to carry a city-issued rental license.
Greenlee admits that’s a significant levy.
“It is. It is. But there also is significant income coming in for these properties that are renting, particularly for the pope’s visit, but even on others. And in a sense, they’re short-term hotels,” he said.
Greenlee says this is not being driven by this fall’s visit of Pope Francis but by the growing realization that Airbnb-type rentals have led to a large industry that is now underground.
“There’s a lot of people who are doing it not just for the pope’s visit — they do it on a semi-regular basis. When people come in and are lodging somewhere, that’s in a sense a hotel. People are turning their properties into short-term hotels, and should be liable for the tax on the money they gather for that,” Greenlee says.
He adds that for web sites like Airbnb, the tax would be automatically added to the transactions. For rentals through other sites, such as Craigslist, it would be the owner’s responsibility to add on the tax.
“Part of their (the web sites’) business practices would be to collect the tax,” Greenlee says. “It just facilitates the whole process better. But in the end, the responsibility would be on the individual that rents the property.”
The measure also clarifies zoning concerns about Airbnb-type rentals. Currently, hotel stays are not allowed in residential areas of the city, which means most current Airbnb rentals are illegal. The administration’s measure amends the zoning code to allow for limiting lodging in residential districts.
City officials do not have estimates of the revenue that is likely to be generated by imposing the hotel tax on home-based lodging.
The bill will be debated in committee by City Council.
Original story by Mike Dunn, City Hall bureau chief for KYW Newsradio 1060.
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