Hotel tax to be extended to short-term rentals

Hotel tax to be extended to short-term rentals

By Sam Haas, Rowan Walrath & Liam Hofmeister, city editors

Some Massachusetts lawmakers are backing a bill to extend the state’s hotel tax to short-term rentals, including vacation homes and rooms rented through companies like Airbnb.

Airbnb has fallen under scrutiny over the past several months. In San Francisco, where the company is based, a ballot measure known as Proposition F started a fight between short-term renters and hotel unions in fall of 2015. The proposition sought to impose a stricter limit on the number of nights landlords could rent spaces through services like Airbnb, changing it from 90 days annually if the renter isn’t present – and unlimited days if they are – to 75 days regardless. Airbnb spent more than $8 million fighting the measure, which was ultimately rejected by voters.

However, in Massachusetts, Airbnb supports the regulation bill, believing it will add legitimacy to the company.

“We are eager to work with policymakers to help our community in Massachusetts collect and remit hotel taxes to the state – just as we have done in Alabama, Florida, Illinois, North Carolina, Oregon, Rhode Island, Washington and nearly two dozen US cities and counties,” Airbnb wrote in a letter it planned to send to lawmakers this week, according to an April 4 Boston Globe article.

“This bill would simplify the complicated tax structure that our hosts face and help ensure the state and the localities receive their fair share of tax revenue,” the letter added. “The Commonwealth has the opportunity to generate millions of dollars in new tax revenue from these transient accommodations.”

Madeline DiLullo, a sophomore international business major, and her family rented out a house in Carmel, Calif. using Airbnb for several months.

“Since we had an empty house, we weren’t going to live in it, and we’d only use it in the summers,” DiLullo said. “[With Airbnb,] we figured we could manage it ourselves, and it would be easier to do shorter or longer stays, depending. […] We chose Airbnb over management companies originally because it would be easier to control.”

Although Airbnb appraised the house, DiLullo and her family were able to set the price themselves based on season, how nearby properties’ prices were fluctuating and other factors. However, as they rented out the house, they discovered they were having an increasing number of issues.

“We got a lot of hits,” DiLullo said. “Ultimately, my mom ended up turning down a few offers just because they had bad reviews or little things kept getting broken.”

Airbnb offers a form of insurance, but according to DiLullo, actually obtaining the insurance is a complicated process.

“It takes forever to get the insurance,” DiLullo said. “You can file a complaint, and they’ll get back to you within three weeks, but it takes a really long time to actually get the money.”

As time went on, problems grew.

“One of our barstools got broken, which I was really amazed by because it’s a hefty piece of wood,” DiLullo said. “It wasn’t really a fair tradeoff, because people would break things. […] We found that the guests through Airbnb were more rowdy than anywhere else.”

Eventually, DiLullo and her family decided that renting through Airbnb was not worth the cost and ended up going with a management service instead.

Salvatore LaMattina, 10-year Boston City Council member for the North End, East Boston and Charlestown, is one of the policymakers backing the bill.

“I’m supporting it because Airbnb needs to be regulated,” LaMattina said. “I have concerns about investors coming into neighborhoods like East Boston, buying our properties and renting our units through Airbnb because they can make more money renting it daily. I have seen that happening in the North End. I have seen that happen in East Boston. If you live in the apartment, have an extra room and want to do one, fine. But if you’re an investor coming into my neighborhood, then I’ve got some concerns.”

LaMattina isn’t the only person with this concern. According to an Oct. 19, 2015 article from The American Prospect, Airbnb’s system allows landlords to rent out a space for short stays at high prices, which is more lucrative than having long-term tenants live in the space, incurring upkeep for the landlord.

The Prospect cites a number of examples of this. According to the article, San Francisco City Attorney Dennis Herrera filed a lawsuit against two property owners, accusing them of evicting longtime tenants, two of them disabled, so the owners could illegally convert the residential buildings into pricey tourist hotels using Airbnb, VRBO and other short-term rental services.

DiLullo agrees with LaMattina: Airbnb should be regulated.

“I think that within the sharing economy products – although they’re different formatting and target a different demographic – they should fall under the same regulations,” DiLullo said. “They shouldn’t have special treatment.”

Photo by Alex Melagrano

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