News

Most Airbnb hosts are ignoring city rules

Only 1 in 14 short-term rentals complying with new registry and business license requirements

Mountain View's new regulations on Airbnb and other short-term rental services are off to a sluggish start.

Under the new rules launched in September, hundreds of short-term rental hosts in Mountain View were supposed to obtain business licenses and register with the city. But new numbers provided by the city indicate most Airbnb operators are not complying: Only 56 hosts have registered, according to the city's database.

This fall, city staff reported there were about 850 short-term rental listings in Mountain View spread across platforms including Airbnb, VRBO and Booking.com. For years, these services have been tacitly allowed to proliferate with no oversight or tax burden as city officials waited to adopt formal regulations. As the cottage industry grew, Mountain View was essentially forgoing about $1 million annually by not collecting any taxes.

After years of consideration, city officials in 2018 passed a short-term rental ordinance meant to rein in hosts who were subverting the city's housing supply by turning homes into de facto hotels. Effective in September, short-term rental hosts are supposed to register with the city, obtain business licenses and pay a 10% fee on bookings.

Following a public records request by the Voice, city officials last week provided initial data showing that not many hosts are registering with the city. The city's listings show a total of 61 units, all of which are owned by small operators running one or two rentals.

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In recent years, certain types of short-term rental operations have riled up neighborhoods in Mountain View, spurring complaints of noise, garbage and loss of parking. Some neighbors have criticized hosts who convert residences into cheap "hacker house" dormitories for dozens of tech workers. Other landlords have converted swaths of older apartments into Airbnb rentals to circumvent the city's rent control rules. There is no sign that any of these large-scale hosts have signed up with the city, according to the city's data.

City officials familiar with the short-term rental program could not be immediately reached for comment. Previously, the city manager's office reported that staff would focus on educating hosts rather than enforcement at this early stage.

Additionally, hosts are supposed to comply with rules to ensure they aren't taking affordable housing off the market in order to turn an easy buck. Unoccupied housing can be rented out through Airbnb and other services for no more than 60 days per year under the city rules. Under the city's ordinance, any hosts who fail to abide by the regulations will be given a warning, and then fines of $500 or more could be imposed.

Other cities have also experienced tremendous difficulty getting Airbnb hosts to comply with regulations. In San Francisco, fewer than 1 in 4 Airbnb hosts signed up and paid mandatory fees after the city launched a similar registry system in 2015. Significant compliance came about only after San Francisco had issued more than $1 million in fines and legally forced Airbnb and other short-term rental companies to delist hosts who weren't following the city's rules.

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Most Airbnb hosts are ignoring city rules

Only 1 in 14 short-term rentals complying with new registry and business license requirements

by / Mountain View Voice

Uploaded: Fri, Jan 3, 2020, 9:52 am

Mountain View's new regulations on Airbnb and other short-term rental services are off to a sluggish start.

Under the new rules launched in September, hundreds of short-term rental hosts in Mountain View were supposed to obtain business licenses and register with the city. But new numbers provided by the city indicate most Airbnb operators are not complying: Only 56 hosts have registered, according to the city's database.

This fall, city staff reported there were about 850 short-term rental listings in Mountain View spread across platforms including Airbnb, VRBO and Booking.com. For years, these services have been tacitly allowed to proliferate with no oversight or tax burden as city officials waited to adopt formal regulations. As the cottage industry grew, Mountain View was essentially forgoing about $1 million annually by not collecting any taxes.

After years of consideration, city officials in 2018 passed a short-term rental ordinance meant to rein in hosts who were subverting the city's housing supply by turning homes into de facto hotels. Effective in September, short-term rental hosts are supposed to register with the city, obtain business licenses and pay a 10% fee on bookings.

Following a public records request by the Voice, city officials last week provided initial data showing that not many hosts are registering with the city. The city's listings show a total of 61 units, all of which are owned by small operators running one or two rentals.

In recent years, certain types of short-term rental operations have riled up neighborhoods in Mountain View, spurring complaints of noise, garbage and loss of parking. Some neighbors have criticized hosts who convert residences into cheap "hacker house" dormitories for dozens of tech workers. Other landlords have converted swaths of older apartments into Airbnb rentals to circumvent the city's rent control rules. There is no sign that any of these large-scale hosts have signed up with the city, according to the city's data.

City officials familiar with the short-term rental program could not be immediately reached for comment. Previously, the city manager's office reported that staff would focus on educating hosts rather than enforcement at this early stage.

Additionally, hosts are supposed to comply with rules to ensure they aren't taking affordable housing off the market in order to turn an easy buck. Unoccupied housing can be rented out through Airbnb and other services for no more than 60 days per year under the city rules. Under the city's ordinance, any hosts who fail to abide by the regulations will be given a warning, and then fines of $500 or more could be imposed.

Other cities have also experienced tremendous difficulty getting Airbnb hosts to comply with regulations. In San Francisco, fewer than 1 in 4 Airbnb hosts signed up and paid mandatory fees after the city launched a similar registry system in 2015. Significant compliance came about only after San Francisco had issued more than $1 million in fines and legally forced Airbnb and other short-term rental companies to delist hosts who weren't following the city's rules.

Comments

resident
Old Mountain View
on Jan 3, 2020 at 10:28 am
resident, Old Mountain View
on Jan 3, 2020 at 10:28 am
35 people like this

Doesn't AirBNB list the properties by city? How hard is it for tax collectors to contact the property owners through AirBNB and demand payment? Charge late fees and collection fees if that is helpful.


JMBMV
Registered user
Another Mountain View Neighborhood
on Jan 3, 2020 at 10:35 am
JMBMV, Another Mountain View Neighborhood
Registered user
on Jan 3, 2020 at 10:35 am
24 people like this

Residents who have a problem Air BnB near them can contact the city and let them know what's going on. We had an unlawful hacker house and worked with the city frequently, letting them know about issues. The house has now been delisted and our block has improved tremendously. The city has a ton of these to stay on top of so residents can and should be their eyes and ears.


Slumlord
North Bayshore
on Jan 3, 2020 at 10:53 am
Slumlord, North Bayshore
on Jan 3, 2020 at 10:53 am
4 people like this

If I'm running one of these hacker houses and renting out for more than 60 days per year then I pretty much can't sign up, can I?


MV Resident, LASD
Registered user
Blossom Valley
on Jan 3, 2020 at 2:31 pm
MV Resident, LASD, Blossom Valley
Registered user
on Jan 3, 2020 at 2:31 pm
1 person likes this

His registration should apply to “hacker houses“ in which the owner does not reside in the residence and multiple rooms per home or being rented out. It should not apply to people renting out single rooms in their homes.


Seize them
Another Mountain View Neighborhood
on Jan 3, 2020 at 2:59 pm
Seize them, Another Mountain View Neighborhood
on Jan 3, 2020 at 2:59 pm
5 people like this

Yet more landlords evading taxes and gouging people on rents. The city should not seize the properties and use them to house the homeless.


AirBnB operator
Another Mountain View Neighborhood
on Jan 3, 2020 at 3:14 pm
AirBnB operator, Another Mountain View Neighborhood
on Jan 3, 2020 at 3:14 pm
8 people like this

I operate small backyard cottage AirBnB and registered (and now pay the city 10.3% of the revenue).

I had been expecting the amount we could charge/night for this cottage unit to increase, since all the "full apartment" AirBnB units should be taken off the market.

The price we can charge hasn't gone up, now I know why, the apartment AirBnB units are still in business.


AirBnB operator
Another Mountain View Neighborhood
on Jan 3, 2020 at 3:26 pm
AirBnB operator, Another Mountain View Neighborhood
on Jan 3, 2020 at 3:26 pm
10 people like this

Just as a note. When the apartment AirBnBs are shut down the amount of tax money the city collects will go down considerably. Now everyone pays, registered or not. Not sure of the numbers, but if 1/2 of the units are apartments, then the city probably will end up getting only 1/2 of the "$1M in fees" quoted in this article.

I do agree with limitations that have been put on AirBnB units in Mountain View. I hope though they will never be extended to owner occupied properties.

If for instance backyard cottage AirBnBs could only be rented out 60 days a year, we would not turn it into a full time rental. Since we want the use of the cottage for large family visits and also just times when we want the full backyard to ourselves. Also keeping it open in case a grown child ever wants to move here.

Many times (maybe 1/4 of the rentals) we do, go to parents visiting their children who live in the area. Since many live in small apartments they don't have room for their parents to stay with them. They are grateful the AirBnB option is available, since it is only ~1/2 the cost of a hotel, they can afford to visit their resident children longer.

Just making these comments so people hear from another angle.


Old Mtn View
Old Mountain View
on Jan 3, 2020 at 3:33 pm
Old Mtn View, Old Mountain View
on Jan 3, 2020 at 3:33 pm
50 people like this

A rather strange article leaving more questions.

How many people got the warning letter? Also $500 is a small fine for second violation given the money here. Many people will take their chance and see if it’s worth it to keep renting.

Also “turn an easy buck” is not a phrase you normally see in a newspaper unless it’s quoting someone. Use of slang not something you learn in journalism...


Polomom
Registered user
Waverly Park
on Jan 3, 2020 at 4:11 pm
Polomom, Waverly Park
Registered user
on Jan 3, 2020 at 4:11 pm
9 people like this

San Francisco was mentioned: Platform liability is used in San Francisco, where only permanent residents can host vacation rentals, and they’re required to register with the city. Hosting platforms are fined if they do not remove listings that are unregistered – and therefore illegal. Peter Byrne, senior analyst in San Francisco’s Office of Short-Term Rentals, says the platforms have been cooperative and the city now has fewer than 4,000 short-term rental listings on major platforms, compared to 12,00 to 15,000 before platform liability was required.
Are we requiring the platform liability?


The Business Man
Registered user
Another Mountain View Neighborhood
on Jan 3, 2020 at 4:25 pm
The Business Man, Another Mountain View Neighborhood
Registered user
on Jan 3, 2020 at 4:25 pm
1 person likes this

In response to AirBnB operator you said:

“I operate small backyard cottage AirBnB and registered (and now pay the city 10.3% of the revenue).

I had been expecting the amount we could charge/night for this cottage unit to increase, since all the "full apartment" AirBnB units should be taken off the market.”

That has not occurred in Mountain View yet. In fact there is little enforcement to prevent AirBnB abuse in the city. And in fact that is allowed because you also stated:

“Just as a note. When the apartment AirBnBs are shut down the amount of tax money the city collects will go down considerably. Now everyone pays, registered or not. Not sure of the numbers, but if 1/2 of the units are apartments, then the city probably will end up getting only 1/2 of the "$1M in fees" quoted in this article.”

So there is in effect an incentive to the City to avoid enforcement of the new regulations. That is why the initial cost is as small as $500. You also said:

“If for instance backyard cottage AirBnBs could only be rented out 60 days a year, we would not turn it into a full time rental. Since we want the use of the cottage for large family visits and also just times when we want the full backyard to ourselves. Also keeping it open in case a grown child ever wants to move here.

Many times (maybe 1/4 of the rentals) we do, go to parents visiting their children who live in the area. Since many live in small apartments they don't have room for their parents to stay with them. They are grateful the AirBnB option is available, since it is only ~1/2 the cost of a hotel, they can afford to visit their resident children longer.”

So if what you said is accurate you rent your unit for 15 days out of 60 to the parents, only 2 weeks? You also state that you charge ½ the cost of a hotel. Given that the average hotel in Mountain view is about $175 a night you claim to charger $85 a night. Multiply that by 60 comes to only $3200 a year. That does seem reasonable.

But I can argue that the lack of registration means that others are not in compliance with the regulations. That is why they do not self identify. They are renting for longer periods of time and not paying their taxes on it.


Polomom
Registered user
Waverly Park
on Jan 3, 2020 at 4:46 pm
Polomom, Waverly Park
Registered user
on Jan 3, 2020 at 4:46 pm
37 people like this

Hawaii only started to enforce illegal AirBnb rentals in August: Airbnb hosts must obtain a Certificate of Registration, as required by Hawaii state law. After successfully obtaining the Certificate of Registration, Airbnb hosts are required to post that ID on their online listing. Any listing not showing their number is in violation. Daily fine is $ 1,000.00.
MV should require this from the registered AirBnB hosts. Makes it easy for the city to ID the non registered hosts.


The Business Man
Registered user
Another Mountain View Neighborhood
on Jan 4, 2020 at 7:36 am
The Business Man, Another Mountain View Neighborhood
Registered user
on Jan 4, 2020 at 7:36 am
3 people like this

Polomom:

All I can say is I concurr


Steven Nelson
Registered user
Cuesta Park
on Jan 4, 2020 at 10:09 am
Steven Nelson, Cuesta Park
Registered user
on Jan 4, 2020 at 10:09 am
5 people like this

Very good investigative reporting on governmental function. Thanks Mark.

Please note that this DEPENDED on the use of a strong California state law on 'transparency' of government records. The California Public Records Act. Some local governments will try to thwart collection of public records. I have usually found the City of MV (through it's City Clerk) to be extremely good and helpful !

... While the local school district administration (Superintendent Rudolph's office in the MVWSD) is often uninformed, uncooperative and rude. I do not think the City Clerk would tell you, or Mark, that they could just hold up fulfilling a records request for "4 or 5 months"!!! It happens though, in the local MVWSD.


Carol C
Registered user
Old Mountain View
on Jan 5, 2020 at 11:26 am
Carol C, Old Mountain View
Registered user
on Jan 5, 2020 at 11:26 am
14 people like this

this is pathetic. San Francisco solved this problem a couple of years ago! Nobody can list their property until they have receieved a registration code from the city. How easy can things get? Come on City of Mountain View - get your act together.


SRB
Registered user
St. Francis Acres
on Jan 5, 2020 at 3:21 pm
SRB, St. Francis Acres
Registered user
on Jan 5, 2020 at 3:21 pm
2 people like this

Wondering if the City is also looking at services like Pillow.

see this link for details of arrangement with apartment buildings in Cupertino
Web Link

"With Pillow, landlords can rent out their empty units for a few nights at a time to make the most of this valuable asset. Pillow charges an 8 percent fee per completed reservation: the average property manager can make 10-30 percent more than typical market value by offering short-term rentals in addition to traditional leases. "


CatalinaonErnestineLn
Registered user
St. Francis Acres
on Jan 5, 2020 at 10:18 pm
CatalinaonErnestineLn, St. Francis Acres
Registered user
on Jan 5, 2020 at 10:18 pm
2 people like this

This article makes most hosts sound like bad people who do not want to comply with the law. I am an Airbnb host. I rent a room in my house since it is hard to live in htis area on a teacher's salary. There are several incorrect facts in thsi article. For example a business license has to be obtained before one can register to rent, the city has been collecting the 10% fee since January 2019 directly from Airbnb has been paying the city directly regardless of whetehr the hosts have a license or have been registered. I was informed of the new law in a letter that stated that I had 30 days from the day the letter was printed to register my room. Not a lot of time considering how confusing the instructions were and how much paperwork and steps were involved. When I applied for a business license I could not obtain one because I had a building permit since I was having my roof replaced and other minor upgrades. A building permit is good for 180 days from the last inspection. It was impossible for me to register my Airbnb rental in 30 days while I have an open Building permit. It has not helped that the city has been slow in processing the paperwork I have submitted.


The Business Man
Registered user
Another Mountain View Neighborhood
on Jan 6, 2020 at 9:37 am
The Business Man, Another Mountain View Neighborhood
Registered user
on Jan 6, 2020 at 9:37 am
4 people like this

In response to CatalinaonErnestineLn you said:

“This article makes most hosts sound like bad people who do not want to comply with the law. I am an Airbnb host.”

The statistics it presents does support their claim you said:

“I rent a room in my house since it is hard to live in htis area on a teacher's salary.”

Are you a teacher, or are you renting to a teacher? Your comment seems to be deceptive. Do you in fact fully own your house, how long, and to what degree do you have been able to make use of Prop. 13? You said:

“There are several incorrect facts in thsi article. For example a business license has to be obtained before one can register to rent, the city has been collecting the 10% fee since January 2019 directly from Airbnb has been paying the city directly regardless of whetehr the hosts have a license or have been registered.”

That appears to be inaccurate if you look at the City regulations Website. It states:

“Registration

Registration - properties being used or advertised as STRs must start to register with the City. A grace period will be given through September 1, 2019 before compliance warnings will be issued.

STEPS TO REGISTER YOUR STR:

Get a business license.

* Complete the business license application form Use NAICS Code: 531110 Use Mountain View Business Code: 6800

* AND Complete the Self-certification Affidavit Form for Short-Term Rentals

Complete the Transient Occupancy Tax Registration

Submit all 3 forms to the City.

Bring the forms in to the Community Development Department on the 1st Floor of City Hall (500 Castro St., Mountain View OR Mail all of the completed forms to: City of Mountain View, Finance & Admin Services Department, PO Box 7540 Mountain View, California, 94039 OR email them to [email protected]

NOTE: It may take four-to-five business days for the City to process and return with your new business license number.

Once you have your business license number, submit an STR Registration Application online here: STR Registration Portal. You will need to upload copies of your business license and the self-certification affidavit to the STR registration portal.

NOTE: TOT collection is the responsibility of the STR host/operator and is due quarterly. See TOT information page.

ONGOING EACH QUARTER: Complete a Transient Occupancy Tax (TOT) Return and mail it with your payment to City of Mountain View, Finance & Admin Services Department, PO Box 7540, Mountain View, California, 94039 or bring them in person to the City Hall Finance and Admin Services on the Second Floor at 500 Castro St., Mountain View. “

Since when does AirBnB pay the TOT payments? It makes me think your operating a room not through AirBnB but another group. You simply didn’t do any homework prior to getting into the AirBnB business it appears you said:

“I was informed of the new law in a letter that stated that I had 30 days from the day the letter was printed to register my room. Not a lot of time considering how confusing the instructions were and how much paperwork and steps were involved.”

Who issued that letter? It appears the City is not complying with its own regulations. That may be a serious problem because the city cannot make exceptions unless they are disclosed on the City website. Again, you had fair notice of what you are required to do since September 2019. You said:

“When I applied for a business license I could not obtain one because I had a building permit since I was having my roof replaced and other minor upgrades.”

Who made this claim? Because there is no information on the city website that makes this condition a requirement. To me this looks like another problem with the City not complying with the regulations it established. You went on to say:

“ A building permit is good for 180 days from the last inspection. It was impossible for me to register my Airbnb rental in 30 days while I have an open Building permit.”

What law or regulation are you talking about? So far I cannot find any public records that support this claim. Please provide the code the city used to require this? You said:

“It has not helped that the city has been slow in processing the paperwork I have submitted.”

That is a good complaint, but so far you have not proved your claims. I am simply skeptical that the City would arbitrarily and capriciously make up road blocks out of the blue.


St Francis Acres Neighbor
St. Francis Acres
on Feb 8, 2020 at 12:28 pm
St Francis Acres Neighbor, St. Francis Acres
on Feb 8, 2020 at 12:28 pm
3 people like this

Where can I report a neighbor's house that hosts airbnb? I don't like that they do it as it disrupts our quiet cul-de-sac. But if he has a legal right to do so, I want to make sure he's following the rules and paying his share fair of taxes to our city.


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