Plan would end permanent Airbnb-style rentals in Seattle

In a bid to make more of the city’s rental capacity available to honest to goodness renters — and in the latest attempt to regulate Seattle’s sharing economy — Seattle officials have unveiled a plan to clamp down on houses and apartments permanently listed for tourists on services like Airbnb and VBRO.

The proposal (PDF) seeks to distinguish people who are making some extra cash by occasionally renting out their homes for short-term stays and those who are renting out units year-round on a short-term basis.

“Property owners are shifting hundreds of homes from the long-term residential market to short-term rental platforms like Airbnb, and in doing so dangerously reduce our housing supply,” said Council member Tim Burgess in a statement.

Under the proposal, any apartment or house that does not have a permanent resident would be prohibited from having more than 90 nights of short-term stays per year. Permanent residents could rent out their homes above the 90-day cap if they receive a license from the city.

“We must protect our existing rental housing supply at a time when it is becoming harder for residents to find an affordable home in Seattle.”

The new license will require proof the unit is being rented by the operator’s primary resident, proof of insurance that covers short-term rentals, a local contact number, and basic safety information. Short-term rentals are defined by the city as those under 30 consecutive nights.

The Mayor Ed Murray-backed proposal also comes with some new requirements on rental platforms, like Aibnb.

The platforms will be required to provide information about Seattle’s regulation to operators using the platform and share basic data with the City on a quarterly basis, including the names and address of operators and the number of nights each operator has rented a short term rental on the platform.

Primary and non-primary resident operators will still need to meet the city’s current requirements, which include obtaining a city-issued business license and pay applicable taxes.

“We must protect our existing rental housing supply at a time when it is becoming harder for residents to find an affordable home in Seattle,” said Murray said in a statement.

Seattle’s densest neighborhoods, including Capitol Hill, tend to be the most saturated with short-term rentals. There were 61 Captiol Hill rentals available on Airbnb for the June 3rd weekend — only 10% of the listings left for that date. According to insideairbnb.com, more than a third of Airbnb listings on Capitol Hill are from hosts who have multiple listings.

According to a policy paper put out by Burgess’s office, short-term rentals on Airbnb have exacerbated the city’s housing crisis. Regulating short-term and vacation rentals was one of the recommendations to come out of the mayor’s Housing Affordability and Livability Agenda Committee last year. The group proposed a tax short-term rentals to fund affordable housing, but Burgess’s staff determined the city lacks the authority to implement such a policy.

The initiative follows Seattle’s efforts to reform the taxi and “transportation network company” industry like Uber and Lyft. In December, the Council voted to allow Seattle’s for-hire drivers to unionize. Following the vote, Murray said in a statement that he would not sign the bill, but would not veto it either, paving the way for it to become law.

After Burgess announced in January that his staff would be exploring short-term rental regulations, Airbnb released a “Seattle economic impact report” in response. The report showed 151,000 guests stayed in one of 2,900 Seattle-based Airbnb locations and generated $178 million in “total economic activity.”

Meanwhile, City Council members advanced a bill Wednesday that would restrict rent increases in buildings with housing code violations. The so-called “Carl Haglund law,” named after a notorious Seattle landlord, was first proposed by City Council District 3 rep Kshama Sawant last year. The legislation includes six new elements including restricting landlords from raising rents in properties that don’t meet required standards and, maybe even more importantly, transferring enforcement from police to the Department of Construction and Inspections. The rules would also require landlords provide at least 60-day notice on rent increases of 10% or more.

Regulating Short Term Rentals Policy Brief

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39 thoughts on “Plan would end permanent Airbnb-style rentals in Seattle

  1. Here is a great example of the saying “Self government won’t work without self discipline”. The intent of AirBnB and the like is to rent a spare room or a cot for short term stays. Those few that make this a source of full time income are the ones that invite regulations. The same can be said of ride share services. Some are operating as unregulated taxis, which will and must lead to laws that level the field.

    • This. People get greedy and ruin something that was helpful to many on both sides of the AirBnB (and Uber/Lyft) equation.

      I don’t believe that these restrictions will help with adding affordable housing in Seattle one bit – but I do support full time rentals being taxed and licensed for what they are.

      I wonder how this will impact the Rockland residency – I LOVE their model of financing a couple of months of free artist housing by renting the house out the rest of the year. I would hate to see something so creative and awesome (and NEEDED for artists and the culture of this city) disappear.

  2. What I don’t understand is that with avg 100 nights rentals per year how you would make enough to replace a steady rental income. Add the hassle of cleaning, reviews, new people showing up endlessly etc etc. the more properties that list, also push down price. Other locales (Santa Monica etc) have restricted it to owner occupier, so not a lot new here ?

    • Have you checked the prices? I’ve checked to compare with hotels such as in SF and AB&B is $300 a night to stay in a decent neighborhood which is about the same or more than Trivago for a four star hotel but AB&B adds all the hassle of proving you are reputable via FB pages and followers and all that invasive crap rather than just here’s my credit card number. Seattle has similar prices as SF. $300 x 100 nights, you do the math.

  3. What about house owned by developers who make them available via sites like vrbo.com for short-term rentals while waiting for city permits to redevelop the property? Certainly that is better than leaving them empty!

  4. This would be absolutely devastating for me. I commented on a recent post about this, so forgive me if you just read this, but I live in an old Capitol Hill building. There are about 20-something units in the building and a handful of them are short-term rentals advertised through Airbnb and the like. The rest have long-time regular tenants like myself. The prices for the short-term rentals are the normal high prices tourists are willing to pay. It seems like they are always occupied and good money is made by these units. In turn, myself and my fellow regular tenants pay a completely reasonable price for our apartments – it’s the short term rentals and tourists that have eaten up the increase in property taxes etc over the years, not us. The owners have all the proper permits and pay all the appropriate fees. This building is completely independently owned and operated, everyone knows everyone, you get birthday cards from the landlord, etc. And in our little corner of Capitol Hill, Airbnb works. Yes, four or five apartment units on Capitol Hill are off-market. But if they were converted to regular units, I have no doubt that we would see rent hikes that price us out and the number of working class young people that folks in the CHS comments speak of wistfully in the past tense would dwindle even more.

    • Without a doubt the units you speak of could be rented to other working class folks like yourself. And obviously hundreds (I am guessing thousands) of units are being denied to the actual citizens who live and work here. What about entire buildings on airbnb or management companies/individuals who have dozens of listings? His do you feel about them? I am sure that a LOT of condo and apartment dwellers will be breathing a sigh of relief to no longer be living in the equivalent of a hotel.

    • The point is that without the income from the short term rentals, those units would not go to young working class people like myself – every single one of us would be priced out. It’s because of that short term rental income we are able to have some stability in our housing lives and have been free from frequent unexpected rent increases.

    • @werty Your example is a prime example of the honest people using an unregulated service that get screwed when that service gets regulated to attempt to mitigate the negatives. Unfortunately, it comes down to the fact that the people doing harm greatly outweighed the people doing good.

      I applaud your owner’s willingness to share in the profits, but it’s definitely an exception to the rule. What you can do is write to your council member and/or show up at council meetings and voice your example and concerns.

      Maybe they can write an exception to owners that short term rent below a certain percent of units, as long as they prove that the rest of the long term units are renting a certain percent under an accepted market rental rate? The exemption would get loopedholed no doubt, but it’d be worth a shot.

    • All hail the mighty renter… you are like pandas and need our love and support. You folk that took great risk to get yourself in a house… go screw yourself. We assume all home owners are fat cats. Home owners are now just an ATM for the city to withdraw money from (due to an ass backwards tax system). If we want ponies we are coming for more money from you.

      Does anyone remember the implosion of the housing market… anyone? Did renters end up $100K in the hole to their landlord out of now where? Many, many home owners did.

      Owing a home is great financial risk (especially the crappy old housing stock that is most of Seattle) that has rewards. You may have a great reward when you finally sell, or are in in long enough that with all the extra cost and headache that it is cheaper than renting, but it is just risk and burning money until then.

    • Your landlord probably charges longterm tenants what ever the market can tolerate. I doubt they keep your rent low because they are making “enough” money off short term rentals.

  5. These regs are not needed. Yes, some owners are renting their places via Airbnb, but not enough to demonstrably effect the housing supply. Restricting their property rights will not increase supply significantly, nor will it reduce rents. It is really an attempt to get an unregulated part of the local economny “under control”.

    • Why is it so hard for people to understand that when running any BUSINESS there are rules/laws etc to follow? This whole “shared” thing is ridiculous. If you are accepting money for your “service” then taxes are due and you should play by the same rules as other BUSINESSES in the same field as you. No you are not special and should be exempt. No you can’t do anything you please with your private property. Pig farm, day care, hospital, hotel, porn theater etc etc. These are business uses.

      If I give you half of my sandwich I am sharing it with you.

      If I sell you a sandwich I am in the business of selling sandwiches. Seems pretty simple to me.

    • Absolutely. This is no different from “the 1%” using loopholes to evade taxes. The only difference is which segment if the economy is doing it. Same thing applies to Über and Lyft. Wherever somebody dodges paying their fair share, somebody else makes up for it later. It’s not any better because middle-class people might be skipping out on taxes than it is when the plutocrats do it. It’s OK if it’s *you* benefiting and not somebody else? I don’t think so. I agree, a business is a BUSINESS. Whether you give it a cutesy name like “sharing economy” or not.

    • I still don’t understand why everyone is assuming the income made from rentals is not taxable, or that the landlords are somehow evading taxes?

    • AirBnb is filling a niche, which is room space in the Downtown areas(of course it’ all over but that’s the demand). There are around 2200 units, if AirBNB is banned some would be rent-able, others(rooms in a home) might not be..either way Seattle’s natural population growth is well beyond that number.

      I guess I live in a city where people want everything and anything regulated.

      Seattle’s rents are not going to go down…unless
      1. Deep national recession
      2. Amazon suddenly automates everyone.

    • Jim and its about time,

      Airbnb owners are already required to pay applicable taxes and have a business license. If their rental brings in more than $20k per year, Airbnb sends them a 1099 form, thus reporting the income to the federal government. Less than $20k you declare it yourself when filing taxes.

      So, this is not about collecting additional taxes from the middle class or the 1%, it is about control. However, it is being sold as rent relief because anything under that guise is extremely popular in Seattle now. The new regs will do nothing to lower rents or relieve our housing shortage. Call it what it is:the city stepping in to exert greater control over a relatively unregulated part of our local economy. I am sure it is just the first step of many the city will take to reign Airbnb and home shares in. To bad, in my opinion.

    • Glenn

      Innkeeper here of 31 years of a licensed and properly run bed and breakfast on the hill. I am quite familiar with all of the current rules and actually like the proposal.

      Airbnb owners have only had to pay taxes and be licensed since October of 2015. What about the other 7 years in business? How much tax money was lost in that time? During that time my business was subject to audit at any time and I had to maintain a license to do this.

      To my knowledge the toughest part of the proposal is getting airbnb to crack and share info. Other cities have been unsuccessful in this regard.

      Airbnb refuses to disclose:
      1) Who is doing it
      2) Addresses of properties doing it
      3) how many hosts have multiple listings
      4) how much money is being paid to each host.

      How would we ever know just how many units are being used this way?

      The proposal isn’t aimed at small users who will still be able to do it with a license.

      It is aimed at the big abusers of the system who obviously ARE removing housing from the market. I think it is a smart move to do it now as airbnb absolutely explodes.

      Talk to the people of Paris and Barcelona about what happened to their housing opportunities as a result of airbnb. Do we want Seattle to wind up in the same boat?

    • @Glenn…

      Yes, officially all Airbnb hosts must have a business license and pay taxes, but how many of them ignore these requirements? I suspect it’s a significant number, especially for those who are supposed to “self-report” their income.

  6. I must be missing something, because it’s not clear to me how this proposal helps to preserve apartment units (or houses) for long-term rental. If an apartment owner, say, chooses to rent some of his/her units via Airbnb for 90 days a year, those units would not be available for renting to a long-term tenant. It would be the same thing for a permanent resident who rents a room for more than 90 days a year.

    The only way this proposal would help is if the new regulations caused property owners to stop renting entirely to Airbnb, so that their units would then be available for long-term rental.

    • @Eric, not sure you’re following what Bob is saying. The proposed rule allowing 90 days of short term rental would not help increase the long term rental stock. So what’s the point?

    • “The only way this proposal would help is if the new regulations caused property owners to stop renting entirely to Airbnb, so that their units would then be available for long-term rental.”

      THAT is the point.

  7. I live next to a Airbnb vacation rental home on Bellevue Ave. It is a terrible neighbor. Every single weekend in the summer it’s like your next door neighbor is having a family reunion, with drunk bros and woo girls in the hot tub until 2am.

    This isn’t about slapping people down that are renting their place a few times a month when they’re out of town. These are people who have built businesses snatching up housing supply and essentially operating hotels without permits or zoning. I’m glad the city is stepping in.

    • I lived next to a house rented via vrbo.com all last year and rarely had any complaint regarding the people staying there.

    • I saw that new tool on Airbnb. Bookmarked. :)

      And yeah, I get it, not every group at the house is bad. It’s just frustrating that you have to live essentially next to a hotel/business in a residential zone.

      I have no issue with individuals renting out their home when they’re out of town or if they have a spare room. But that isn’t the case for what’s targeted here. Companies that own a large stock of vacation rental homes in the city should be regulated, and neighbors should have formal recourse when/if things get out of hand.

    • Amen! We have a constantly changing nameless faceless neighbor who fills up our garbage with compost, makes a bunch of noise and is accountable to no one because they aren’t part of our community. I’m so sick of this and I really hope the city is successful with the new regulations.

  8. So much wasted time and energy by housing advocates on this issue. Yes, there are egregious cases of multiple listings and, yes, there should be some kinds of regs to address health, safety, and biz reqs from the city, but this is a relatively minor issue for housing affordability. Bigger fish to fry! Get back to the tragically lost SF zoning recommendations in HALA and leave this picayune but inflammatory stuff for another day.

    I bet, by far, that Air BnB is probably helping more mid-income people pay their housing costs than we are losing in affordable units taken off the market.

    • Clearly for ny, sf, la to take action its perhaps becoming a little bit more of a problem. A while back I saw an entire apt complex for sale with airbnb as the business model to justify the multiple.

    • Oh yes, I am sure you are right that it matters in major tourist-destination cities. I have yet to see compelling evidence that it is significantly distorting the housing market in this city, though I am open to good data to prove that point. How many of these units would have been part of the regular housing market, and how many are opportunistic rentals that would not have been leased on the open market because of timing or circumstance? This strikes me as an excercise that should be aimed at the minority of owners who have stretched a loophole too wide.

      Also, just because other big cities are regulating this doesn’t mean we share the same problems. Sometimes our electeds just want to get a news story in the paper or a moment in the sun tackling a fad issue. I think Tim and others should keep their attention focused on implementing HALA rather than diverting attention

  9. Agreed”. Burgess wants to look renter sensitive to increase his standing with tge majority population. A solution seeking a problem.and i would love to end up with the problem that paris and barcelona have, but we aint either.

  10. Blah, Blah, Blah…The Bernie crowd at it again – ‘you own an extra property that you’re trying to make money from!?! Well, you are obviously rich and we must take that property from you and give it to someone else. You aren’t allowed to make money off of it, oh and by the way, you will still have to pay for it along with all those taxes on it!’

    • Turns out that when you live in a society, you have to follow rules and play nice. Go figure!

      If property owners have a problem with the rules, they are free to do their Airbnb business in Somalia. Lot less rules and regulations there; it’s a libertarian’s paradise!

  11. If you can’t own the house or won’t probably own it rest of your lives, I understand you will get bitter about it.
    (guess what, when you travel especially by yourself, I am sure you will check out airbnb options when traveling)

    It’s like people getting mad over new condos being developed. (it’s called gentrification right?)
    They can’t AFFORD IT. that’s the only reason. If you are upset about it, just make more money.
    Otherwise, stop complaining like a homeless person bitching about govt.