After years of consideration, Mountain View officials are finally ready to begin regulating the fast-growing cottage industry of Airbnb and other short-term rental services.
Under a new registry system that launched last month, city officials will begin enforcing new rules on the hundreds of bedrooms, apartments and homes that have been converted into short-term lodgings within the city. All hosts will soon be required to pay for fees for business licenses, registration and hotel taxes.
"We firmly believe that people operating short-term rentals in Mountain View want to be compliant with the city's rules," said Melvin Gaines, city management analyst. "At this point, we are really trying to be educational, and not punitive."
It's fair to say these fees and rules have been a long time coming. For more than a decade, Airbnb and its rivals have faced minimal taxes and scrutiny from city officials. By taking this approach, the city essentially waived more than $1 million in annual taxes. In turn, the number of short-term rentals has ballooned, growing to about 850 listings spread across platforms such as Airbnb, VRBO and Bookings.com, according to city estimates.
The new regulations are expected to clamp down on reports of apartments being converted into de facto hotels, creating a variety of problems. For some neighborhoods, unregulated Airbnb homes have generated noise, parking and garbage complaints. Meanwhile, housing advocates blame the unfettered short-term rental industry for exacerbating the regional housing shortage.
To give one example, Prometheus Real Estate Group has been using short-term rental sites to fill unoccupied apartments in at least three of its Mountain View residential properties. These apartments, some of which are rent-controlled units, are listed for between $200 to $300 a night.
A resident at Prometheus' Madrone Apartments told the Voice she recently found that several units at her complex were being leased out like hotel rooms on short-term rental sites. She was disturbed by the practice, saying it seemed like a shady trick to pull amid the brutal housing crisis. She asked for her name to be withheld over fears of retaliation.
"It seems like because they have rent stabilization, they're trying to get a higher price," she said. "I just don't trust that they're following the rules, and these apartments already aren't worth what they're making us pay."
Prometheus representatives did not respond to a request for comment.
Under the new city rules going into effect, landlords will be prohibited from renting out homes or apartments on sites like Airbnb for more than 60 days per year. City officials say they wanted to give some flexibility for homeowners to temporarily rent out their properties if they leave the area, such as for an extended vacation. The 60-day cap, they believe, will make it unprofitable for speculators to buy up homes just to convert them to Airbnb rentals.
If hosts are living at their property while taking in guests, by renting out a spare bedroom or granny unit, then they will face no limit and they can operate it 365 days a year.
Surprisingly, some Airbnb hosts are welcoming the new regulations. For years, Mountain View resident David Haedtler has taken in Airbnb guests at his Slater neighborhood house as a way to make ends meet. His children moved out years ago, so it made sense to rent out his two spare bedrooms and an unused backyard cottage, he said.
Haedtler said he was sanguine about the new rules, and other local Airbnb hosts whom he's chatted with generally feel the same way.
"It took them a while, but I think the city of Mountain View did it right," he said. "This solves the problem of people buying up properties and reducing our housing stock."
When it comes to enforcing these regulations, the city will be treading lightly. The emphasis for now would be on educating hosts to register and comply, according to city staffers.
Any hosts who fail to register with the city will be given a warning. After that point, they could receive a $500 fine, or $1,000 if it takes three warnings. Any absent hosts who rent out their houses or apartments for more than 60 days per year could be fined $500 per day.
San Francisco-based company Host Compliance has been hired by the city of Mountain View to handle enforcement and analyze the local rental listings to single out any hosts who are skirting the rules. The company will also operate a 24-hour-a-day hotline for complaints or concerns.
City staffers say that drafting a contract with Host Compliance took longer than expected, which forced them to push back their deadline for when full enforcement will begin. All short-term rental hosts are now expected to be registered and fully compliant with city rules by Sept. 1.
When the new regulations fully come online, all short-term rental hosts will be expected to operate like independent businesses, paying fees similar to those levied on hotels and other lodgings. Mountain View is expected to receive at least $1.26 million in hotel taxes from Airbnb and similar services.
Clarification: An earlier version of this story reported a city estimate from last year that there were about 1,000 short-term rentals in Mountain View. City officials now say they their latest numbers indicate there are about 850.