Airbnb Hosts Get Nervous As Columbus Considers Stricter Regulations
With a wide front porch and soft chairs gazing onto the front yard, Scott Haskett’s Airbnb looks like other houses on his tree-lined street in the Short North.
Haskett has been in the Airbnb business for a few months. After being laid off from his data analytics job in 2015, Haskett moved to California. Last fall, he returned to Columbus to renovate his house, sell it and move back to the west coast.
Working on the house would consume his hours, until one day he realized he’d worked 25 days in a row without catching a break.
“Then I also realized, ‘Wow, I could Airbnb the house for the weekend so that way it will force me to be out of the house,’ which would be great,” Haskett says.
His first Airbnb guest stayed in October. Haskett expected to host guests maybe twice a month, but his listing took off. With guests filling the house 60 percent of the time, he says he could earn more than $20,000 a year. And when he finishes the renovations, he expects that occupancy figure could increase.
As the popularity of short term rental websites like Airbnb grow, the rentals of private rooms or homes is drawing the attention of local governments. Now, Columbus officials are looking at regulating and taxing Airbnb-type rentals. That's a matter of concern to owners like Haskett, who put his plans to sell and move on hold.
“I would love to stay here to finish school, but if there are restrictions imposed in terms of the number of days we’re able to host, then it means I have to sell my home,” Haskitt says.
According to travel and tourism researcher Longwoods International, 9.1 million visitors made overnight trips to Columbus in 2016. Overall, Columbus’ visitor volume grew from 39.3 million visitors in 2015 to 39.9 million visitors in 2016 - a 1.5 percent increase.
That's coinciding with an Airbnb boom here in Central Ohio. In 2017, Columbus was the number one Ohio market for Airbnb, with 57,780 guests using the rental site last year. Right now, private short-term rentals like Airbnb in Columbus have no rules: no permits, no limits on rental days and no hotel taxes.
But the city is considering regulating them by requiring them to get permits, setting number of rental days per year at 90, and making owners live at the property at least 51 percent of the year.
A legislative briefing from September says the application fee for a permit would cost $10, and the permit fee itself would be $75 annually. This is the same cost and schedule as the city's hotel/motel permit.
Though registration isn't too pricey, the regulations on rentals could have a bigger impact: after enforcing new restrictions, San Francisco saw its Airbnb listings drop by half.
Columbus City Council member Michael Stinziano says they are modeling the regulations of other cities and collecting community feedback.
“There’s clearly some things that require additional research and additional consideration," Stinziano said. "There’s some things people didn’t feel made a lot of sense and wasn’t actually capturing the economic activity."
Host Compliance is a company that helps local governments manage challenges associated with the growth of short-term rental sites. It has more than 100 clients, including Denver, Colo., and Seattle, Wash. Founder and CEO Ulrik Binzer says most cities considering 90-day caps are trying to prevent the mass conversion of long-term rental units into short-term rentals.
“What ends up happening is people put out ads on multiple different websites. You could, for example, have the house advertised on Airbnb and VRBO (Vacation Rentals by Owner) and FlipKey,” Binzer says. “It’s very difficult for the city to figure out what’s going out on all these different sites.”
Taxed Like Hotels
The Ohio Hotel and Lodging Association is deeply involved in the new Airbnb regulations. Executive director Joe Savarise says the 90-day hosting limit would have to be written carefully so as to not accidentally impact small professional lodging operations.
“That’s potentially an issue for some of our members who run professional bed and breakfast operations as well, because they could be included, depending on how that’s defined,” Savarise says.
Savarise says Airbnb guests should pay the same taxes hotel and motel guests pay. In Columbus, the tax charged on a hotel stay is 17.5 percent, which includes 7.5 percent in sales taxes and 10 percent in lodging taxes.
According to Savarise, the tax is one of the higher rates in the nation. In Ohio, hotels pay sales tax levied at both the state and local levels, and lodging taxes only on the local level.
“Lodging taxes help support the work the visitor’s bureau does by bringing in more visitors, it supports the arts and other community programming, and it supports things such as the convention facilities authority,” Savarise says.
Hotel occupancy in Columbus was 68.8 percent in 2017, which was almost identical to 2016’s figure. According to Savarise, the average daily rate for hotel accommodation in Columbus was $103.63, which is up from $101.71 in 2016. In 2017, Columbus had the highest occupancy rate of all the Ohio local markets.
In a statement, Experience Columbus says it recognizes Airbnb is a part of the future of Columbus, and that it wants to be able to give a whole array of options to visitors to the city.
Leveling The Playing Field
Haskett says he's fine with paying hotel taxes on his Airbnb.
“If these hotels get a benefit from Experience Columbus by being referred, they’re on their website, will we have a similar advantage?" Haskett says. "If you want a level playing field, we would love a level playing field as well."
Zach James, a Airbnb host in Weinland Park, says he's also willing to pay taxes. James’ short-term rental is full around 80 percent of the year - far above the 90 day limit considered by Columbus.
"I'm self-employed, so my income kind of tends to wax and wane throughout the year as well. It's been a wonderful supplemental income for us," James says. "It's allowed us to increase our quality of life."
But James says he's been involved in talks with the city and is happy to see some regulations being discussed.
“It’ll set some standards for guest safety and for the licensing process," James says. "To me, that’s a tide that raises all ships."
The City expects to start public hearings on the proposed short-term rental regulations next month. There will be another conversation with interested parties sometime in the spring.