Seattle City Councilmember Tim Burgess and Mayor Ed Murray are proposing new regulations for short-term home rentals — like those listed on Airbnb.
On Capitol Hill, a new micro-apartment building. On Beacon Hill, a fourplex from 1976. In Eastlake, a 1922 apartment house. In Ballard, a duplex dating to 1911.
What these Seattle properties have in common are multiple listings — 15 at the Capitol Hill building — on the popular, controversial short-term rental platform Airbnb.
The properties are examples of how Airbnb and other online platforms that cater to visitors, such as VRBO, are eating into Seattle’s housing supply and making it harder for local people to find an affordable home, City Councilmember Tim Burgess says.
When an apartment is being used through Airbnb by a family of tourists from Spain, China or Iowa, it can’t be occupied by a family working and going to school in Seattle.
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Keeping homes available for local tenants is what Burgess and Mayor Ed Murray want to accomplish with new regulations they plan to propose Wednesday, Burgess says.
The new regulations would cover all non-hotel bookings of 30 or fewer consecutive nights. Burgess estimates there are 4,000 to 5,000 short-term rentals in Seattle.
“Our goal is to maintain our rental-housing stock while allowing people to take advantage of the opportunities these platforms provide,” he said in an interview.
Under the regulations, only property owners using their primary residence would be allowed to operate short-term rentals year-round, according to Burgess. Those not using their primary residence would be limited to 90 total nights over 12 months.
The distinction would prevent landlords from choosing tourists over tenants, Burgess says.
“We have whole floors of apartment buildings that have been taken off the housing market,” he said. “We have entire buildings that essentially have become hotels.”
Even property owners using a primary residence would need a special new license from the city to rent for more than 90 nights during a 12-month period.
They would need liability insurance, a local contact number for guests, a declaration the unit meets building and safety codes, and safety information posted in the unit.
The 90-day cutoff would affect just 20 percent of listings for entire houses or apartments in Seattle, according to a recent Airbnb report, Burgess says. The December report said almost 80 percent of entire-home listings here are rented for 90 nights or fewer per year.
Even so, Burgess says, the regulations would help local tenants. In December, Airbnb reported 630 entire-home listings being rented for more than 90 nights per year.
“We don’t know how many of those are primary residences,” Burgess said. “But imagine if we put 300 homes back on the long-term rental-housing market. That would be worth a lot. To build 300 new units would cost more than $70 million.”
Seattle isn’t the first U.S. city to consider regulations for Airbnb and other platforms. Some have adopted strict rules. New York prohibits apartment rentals under 30 days, and Santa Monica requires hosts to live at their property while renting.
Others are more permissive: Philadelphia allows 90 nights a year — 180 if hosts live on site, while San Jose, Calif., allows 180 nights, or year-round if hosts live on site.
Burgess began looking into short-term rentals after reading news accounts and hearing from people in Seattle about them. The number of visitors to the city using Airbnb has doubled every year since 2009, according to the company.
The booming business generated $30 million per year in income for Seattle households, according to Airbnb. But how the industry is growing concerns Howard Greenwich, senior policy adviser at Puget Sound Sage, a Seattle think tank. The number of Airbnb hosts with six or more listings grew 50 percent between September and April, while the number with one listing grew only 23 percent, according to Greenwich’s research.
“That’s a sign the short-term rental market is beginning to lead into investment properties, which are more likely to result in Seattle people getting displaced,” he said.
Airbnb hosts and others operating short-term rentals are already supposed to obtain city-issued business licenses. That would still be the case under the new regulations.
Short-term rental hosts are also supposed to pay sales and hotel taxes. In the case of Airbnb, the company collects those for the state on behalf of its hosts. Seattle’s business tax is only for entities with revenue of at least $100,000 per year.
To enforce the Burgess-Murray regulations, Seattle would require Airbnb and other platforms to obtain licenses of their own and share information about their hosts, including names, addresses and the number of nights each host has rented.
The city would need to budget additional money for the new enforcement work, Burgess acknowledged, saying he doesn’t yet have an estimate of how much.
Airbnb isn’t completely on board. In a statement Tuesday, a spokeswoman praised the proposed regulations for distinguishing “between those who share their homes on occasion to help make ends meet” and those who rent more frequently.
“However, we have legal and privacy concerns with any requirement compelling platforms like Airbnb to turn over personal, confidential information about the people who use our service,” said the spokeswoman, Alison Schumer. “We believe there are alternative ways for the city to enforce its regulations without compromising consumer privacy, and remain hopeful we can work together to devise a balanced solution.”
Matt Curtis, government relations director for HomeAway, which owns VRBO, declined to comment on the Burgess-Murray proposal. He said HomeAway supports cities treating short-term landlords the same as long-term landlords. Burdensome regulations can drive short-term rental activity underground, he said.
Airbnb describes its business as part of the new “sharing economy.” Its typical host in Seattle rents 79 nights and earns $8,000 per year, according to the company.
But Greenwich, worried about people making careers out of Airbnb by acquiring multiple properties in Seattle’s gentrifying neighborhoods, says the success of new regulations would depend on the city getting good information from the platform.
Eric Friedland owns Roy Street Commons, a 39-unit Capitol Hill micro-apartment building with shared kitchen space and Airbnb listings. He said 70 percent of his rooms serve the one- to 12-week market, renting for $50 to $79 per night. Friedland said he markets directly to nursing professionals who come to Seattle for training.
“We switched to Airbnb because that’s where those people are. They don’t use Craigslist,” he said, adding, “Some don’t want to stay in hotels or just can’t afford to.”
Friedland said Airbnb is attractive because it vets his short-term tenants, who pay up front.
“The reality is that people are moving to Seattle. And more people are visiting Seattle,” he said. “Micro-apartments like these are filling a housing need.”
In cities such as New York and Miami, hoteliers and unionized hotel workers have pushed politicians to crack down on Airbnb, worried about it and similar platforms cutting in on their business.
Jillian Henze, a spokeswoman for the Washington Lodging Association, applauded Burgess and the mayor for taking action against what are, more or less, “illegal hotels.”
UNITE HERE Local 8, the hotel-workers union, didn’t return a request for comment.
The council’s housing committee, which Burgess chairs, will likely take up his proposal June 15. A council vote has been tentatively scheduled for late July.