Last updated: December 23, 2020

Can a City Ban Airbnb? Reviewing Its Problems & Benefits

Proper and fair regulations can help local governments mitigate the challenges caused by short-term rentals.
Posted by GovOS Team

Can a city ban Airbnb? When you are planning for an extended vacation, one thing you must consider is accommodation. It is normal to find yourself searching through the internet for affordable, convenient and comfortable housing. To avoid all the hassle and uncertainty of finding excellent accommodation, travel and accommodation agencies are preferred. You are likely to find a better deal if you use a reputable accommodation agency such as Airbnb.

Airbnb is an American vacation rental online marketing company based in San Francisco, California. It is one of the most widely used companies in searching for accommodation in different parts of the world. Airbnb allows homeowners and landlords to offer available units to tourists as short-term rentals. In major cities, property owners prefer this kind of arrangement as it is more profitable than a permanent tenancy.

Airbnb operates internationally in 191 countries and in more than 81,000 cities. The company offers vacation rentals to millions of clients annually, generating massive revenue for the government and itself. Airbnb hosts more than 6,000 workers scattered in different cities.

Can a City Ban Airbnb? Why Cities Are Against Airbnb

As landlords and homeowners reap huge gains from Airbnb, a long-term problem on housing is slowly creeping in. For instance, some property owners have evicted tenants to accommodate short-term vacation renters. Different states have also reported fear of skyrocketing housing prices.

The citizens are also complaining of unavailable housing and the high cost of accommodation in major cities since many landlords prefer short-term vacation rentals. Other cities have a fear of transforming quiet neighborhoods into noisy vacation districts.

U.S Cities That Have Limited Airbnb Operations

New York City is the largest tourist destination in the U.S. and the leading market share for Airbnb. The city has raised concerns that two-thirds of the rental listings on Airbnb are illegal. To curb this trend, NYC introduced laws that necessitated Airbnb and other home-sharing companies to provide details of all rental units in their database. However, Airbnb challenged this policy in court, citing violation of privacy.

San Francisco, which hosts Airbnb, has also implemented even more stringent laws than those in NYC. Only full-time residents can list their units with Airbnb. This policy has helped them see a significant decline in Airbnb rentals.

Moreover, the hosts must register their units with the city officials to facilitate licensing. Those found in violation of these policies have to pay huge fines depending on the number of days rented.

Santa Monica in Southern California has instigated even stricter measures than those in San Francisco. The rules have seen the delisting of 80% of vacation rental units on the Airbnb website.

The laws obligate the host to be living in the residence during the vacation renting. The host must also register with the city officials and remit 14% occupancy tax. These measures have been in effect since 2015 and have adversely affected Airbnb operations in Santa Monica.

Should a City Ban Airbnb?

Local governments have an obligation to safeguard and protect the interests of the public. Through regulations, they can decide whether or not to ban the operations of any company. However, companies also have rights that local governments ought to uphold.

Before banning a company, the adverse effects need to surpass the greater good. Local governments should weigh the benefits a company has against its harmful effects. They also need to look further and see if these adverse effects can be mitigated.

What Questions Should We Ask Ourselves?

Does Airbnb benefit the government and the residents? The answer to this question is a big yes. Airbnb has brought numerous benefits to property owners and tenants who have unoccupied rental units.

The company has also created a boom in local and international tourism, increasing taxes for the government. It has employed thousands of workers in different parts of the word. Additionally, the agency acts as a trustworthy tax collector for the government.

Has Airbnb brought challenges in the housing sector? The answer to this question is also yes. The company has created problems, such as cases of illegal listing and rising costs of housing. These are the two significant challenges identified by various states. However, the benefits for locals and the government far outweigh the problems Airbnb poses.

Can we mitigate the challenges brought by Airbnb? Absolutely. Through proper and fair regulations, local governments can mitigate the challenges caused by Airbnb.

Implementing guidelines that regulate the listing of rental units will help eliminate illegal listing, and introducing pricing caps policies for housing will ensure the housing cost is controlled.

There is an Alternative

The benefits of home-sharing and short-term rentals cannot be overlooked. Cities and local governments should understand that completely banning short-term rentals is not the way to go. Allowing tourists to access convenient and affordable accommodation for less than 30 days is a significant step that boosts local and international tourism.

The City of Los Angeles serves as an excellent example that is ready to mitigate the flaws and enjoy the significant benefits of Airbnb. Through fair regulations, the city has collaborated with Airbnb to boost tourism, employment and revenue collection. For responsible home sharing, individuals have a limit of 120 days per year to host clients.

Through technology, several cities have been able to oversee and regulate short-term renting. Cities in Colorado and North Carolina have successfully utilized technology to enjoy compliance and growth in revenue collection. These cities have also outlined workable regulations for hosts and tourists that have been quite successful.

A city council can use regulations and policies to ban Airbnb operations. However, it should acknowledge the significant benefits in addition to the flaws. The answer is to manage and implement fair laws that allow Airbnb to operate legally and impartially.

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