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Taxes and regulations may be coming to Airbnb's in city

Posted at 6:24 AM, Jul 19, 2018

In the age where rentals like Airbnb are becoming more popular, Baltimore hosts say a bill being considered by the city council could put many out of business. Hotels want a level playing field. 

"City residents who have invested and reinvested in properties in our own town will be shut down and corporations and out-of-town investors will be allowed to continue to operate or our expense," said Rachel Indek, from the Baltimore Hosts Coalition.

The bill was introduced to maintain Baltimore neighborhoods and hold members of the hospitality industry across the city to the same standards, but it has instead split the community. 

"We are looking for a fair and level playing field," Bob Haislip, the general manager of Harbor Court Hotel in Baltimore, said. 

The current system has had a negative affect on hotels and traditional bed and breakfasts. 

"I have seen a drop in the occupancy," Linda Smith, the owner of Rachael's Dowry B&B, said. 

Smith wants short-term hosts held to the same standards that she is, in terms of taxes and regulations. 

"As a small business owner, I don’t think it’s right that I am penalized by these laws yet all of these other people, two of whom are larger than me in my neighborhood, are not having to follow," Smith said. 

Those taxes and regulations are part of the bill the city council is considering. 

The legislation would impose a hotel tax on rental sites and put a 60-night limit on how many days a host can rent their property. 

The bill would also allow lawmakers to deny, suspend or revoke short-term residential rental licenses under certain circumstances. 

The bill's sponsor Councilman Eric Costello said the goal is to make a mechanism for removing problem operators and capture lost revenue for the city. They also want to make sure that neighborhoods are not becoming overly transient. The taxation, finance adn economic development committee held a public hearing on it Thursday. Among other city agencies, it's supported by the Department of Housing and the Maryland Hotel and Lodging Association. 

"Many of these unregistered short-term rentals have transformed residential zone properties into places of commercial business," Frank Boston on behalf of the lodging association said. "This balanced approach will help preserve the fabric of the residential neighborhoods and limit the potential for vast disturbance."

Dozens of people from the Baltimore Hosts Association attended the hearing as well. Hosts say they agree to paying taxes and getting licensed but proposed 4 amendments to the bill. THe first, they want the cap on the amount of nights to be removed. 

"We’re willing to be licensed like businesses. We pay taxes like businesses. We’re asking to be allowed to operate like businesses. Nobody tells Marriott when they are licensed and operating legally that they can only operate 60 nights a year. No legitimate business can stay in business for 60 nights per year and sit vacant for 305 nights," Indek said. 

Indek says they also want to remove the limit placed on the amount of properties they can operate. The bill specifies licenses for their home and one other property. Renters like Indek manage 15 and she says she anf other hosts would lose the money they put into their rentals, transforming some of the city's 16,000 vacant properties. 

"These short-term rentals, many of whom are purchasing vacant properties and renovating them, and turning them into affordable short-term housing for people who need it," Indek said. 

Will Burns from Airbnb also spoke at the hearing, concerned about the cap and the limit on properties. 

"At least consideration for hosts who have been engaged in this activity before the city council has taken this action and to look at a potential grandfathering provision," Burns said.

Indek says the coalition also wants to have a say in what happens to the taxes they pay and they want to change teh definition of transient in the bill from 90 days to 30 days because Indek says this could hurt people like travel nurses and patients getting long-term treatment by limiting their housing options. 

Burns said in 2017, there were 1,200 active hosts on Airbnb in Baltimore and the typical hosts earns $6,300 a year, in addition to the tourism dollars they bring to the city.

"There’s restaurants shutting down. Visitors from our surrounding counties don’t want to come here because they are fearful of it. We are bringing tourists into neighborhoods where tourists don’t normally go," Indek said. "If we go away ... all of our guests go away and the money that they are paying to local restaurants goes away."

The owner of a local food tour company says the bill in its current form could also hurt small businesses that count on the tourism the rentals bring to other areas of the city that don't have big hotels. 

"Unfortunately, all that money that goes to support small local businesses like mine and the local neighborhood restaurants, shops and boutiques would definitely dry up and that would be a great impact to a lot of small businesses and a lot of local people that rely on that money," Bite of Baltimore owner Zachary Greene said. 

The council's president says the bill is a good start and it will likely be amended. The committee will meet again for a work session in mid-August. Thursday was just to hear comments from the public. There was no vote.