As cities lose hotel tax revenue, Airbnb has become a tempting target for new regulations. From San Jose to Santa Monica, city councils have passed ordinances to capitalize on the popularity of the online home-sharing service, an alternative to hotels.
Sacramento is the latest to check in to the fray. An ordinance proposed by city staff would limit property owners to renting out rooms, or their entire homes, to 30 days within a calendar year. If they exceed that limit, the property would be considered a bed and breakfast. Owners would have to apply for permits and pay the same taxes as other bed and breakfasts.
Other cities have opted for less restrictive rules, limiting Airbnb stays to 30 consecutive days in a calendar year or, in the case of San Jose, 180 days when the property owner isn’t around.
In Sacramento, the number of days being talked about, 30 days, is just that at the moment: talk. Sacramento City Council members agree that more research and public input are needed before the proposal can move to the Planning and Design Commission, and eventually to the full council.
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We agree that they ought to tread lightly.
As Councilman Jay Schenirer said recently: “We have a new economy coming and we do not want to kill it.”
If economic impact figures from nine other Airbnb markets, including San Francisco, are any indication of Sacramento’s market, three-fourths of the properties up for rent are located outside of typical hotel districts.
Airbnb guests generally stay longer than do hotel guests, five nights as opposed to 2.8. They also spend more money, mostly at businesses in the neighborhoods where they stay.
In Sacramento, that means midtown, Land Park, Old Sacramento and east Sacramento, neighborhoods full of small businesses and up-and-coming eateries that depend on a steady stream of customers.
For that reason, any ordinance council members adopt must be careful about limiting how many days a year that Airbnb hosts can rent rooms. Based on regulations adopted by other California cities, 30 days, particularly 30 nonconsecutive days, might be too few.
A far bigger issue is lost tourist tax dollars. If research into Sacramento’s Airbnb market reveals that it is mature and truly taking a bite out of established hotels and bed and breakfasts, then adding a tax for those short-term stays should be on the table. Fair is fair.