A letter from Mike Signer, North America Policy Director
I’ve been excited about Airbnb ever since the platform enabled my youngest sister to live in Brooklyn as a freelance writer. And as a former mayor, I saw the benefits of short-term rentals for local folks looking to make a few extra dollars from a room in their house or a second home, and the value of local tax revenue for our government’s priorities and tourist dollars for our restaurants and small businesses.
The best illustration of how travel has transformed during the pandemic can be found in the many thousands of towns across the U.S. that have welcomed their first Airbnb guests. Since March 2020, more than 1,300 cities and towns have received their first-ever Airbnb booking in the US. From Lake View, Iowa, to Wells, Maine, towns across the country and the Hosts who live in them are benefitting from a travel revolution, born from people becoming untethered from offices and having the ability to travel everywhere and stay for weeks, months, or even longer.
In recent years, Airbnb has worked to help destinations benefit from this travel revolution, by both offering new tools to work with cities and by sharing our singular knowledge of consumer travel trends. Our team of policy professionals work every day with mayors, city managers, economic development directors, and city attorneys to craft regulations that meet the needs of their communities.
I hope this new policy tool kit, designed to help local leaders meet the opportunities of today and tomorrow, can be useful in your community as you consider how to best craft fair and balanced short-term rental rules that preserve the benefits they offer to residents and local economies across the country. Please don’t hesitate to contact me at publicpolicy@airbnb.com. We are here to work with you.
Mike Signer
North America Policy Director, Airbnb
Former Mayor of Charlottesville, VA
Introduction
From the very beginning, we approached policymakers as allies, not adversaries. At Airbnb, we’ve collaborated with governments around the world to enable responsible tourism that keeps more of the economic benefits in the places where it happens.
Airbnb is committed to working with policymakers to develop best-practice regulatory frameworks and balanced solutions to meet the unique needs of each community and allow residents to benefit from home sharing.
This toolkit offers best practices in partnering with local jurisdictions in the areas of STR registration, transient occupancy tax, trust and safety and data and resource sharing.
Short-term rental registration
Many local governments opt for a registration system to support compliance and enforcement of their short-term rental rules. After working with jurisdictions across the world, we have found the following guiding principles best form the foundation of a successful government administered registration system:
Easy and accessible registration process: A streamlined, online registration system that allows Hosts to complete every step of the application process quickly and easily helps promote compliance. Further, we have found that compliance is higher when Hosts are required to complete a single application process that incorporates all license requirements into one.
Data minimization: Consistent with data protection best practices, Hosts should only be required to provide the minimum data necessary to process an application. For example, when a Host registers their listing with the government, they provide basic contact information for which the local government gives the Host a permit number. Together, the government and Airbnb are able to ensure compliance by comparing the registration numbers and listing urls, successfully minimizing the data needed to be shared between Airbnb and the local government.
Automatic renewal: To reduce administrative burdens on cities, registration should be automatically renewed by the local government unless a Host decides to stop hosting short-term stays, or if the short-term rental is the subject of multiple violations of local code.
Reasonable fees: All Hosts should pay a reasonable fee upon registration. Registration fees and the number of requirements should be proportional to the space and type of accommodation they share with guests.
Reasonable onboarding period: Governments can help boost compliance by offering Hosts a reasonable timeline to get registered. There should be ample time between the enactment of new short-term rules and enforcement to allow Hosts to complete the registration process.
Simple online registration programs that provide local governments with the information they need to enforce their short-term rental rules without creating undue burdens for regular people who share their homes are a win-win scenario for all parties. Airbnb can help support governments who follow these best practices with a permit field that allows registered Hosts to include their license number on their listing page. When entering a number, the Host attests that the number entered is valid and accurate. The registration number is displayed publicly on the Host’s listing page in a designated field, giving guests peace of mind and regulators the opportunity to enforce, as needed.
We also partner with local governments to educate our Host community on compliance. Airbnb will work with you to build out our “Responsible Hosting” page to include detailed information on how to register a short term rental specifically in your jurisdiction.
Transient occupancy tax
Since 2014, Airbnb has been a leader in platform-based transient occupancy tax (TOT) collection and remittance.1 During this time, Airbnb has collected and remitted more than $7.9 billion to local governments around the world. Airbnb first began collecting and remitting taxes on behalf of our Host community in 2014. Now, we collect and remit taxes in tens of thousands of jurisdictions around the world and the number continues to grow. Those taxes help fund, among other things, public services, with many jurisdictions choosing to dedicate TOT revenue to support housing, tourism promotion, and economic development.
In this uncertain economic climate, this tax revenue is more important than ever. Airbnb collects applicable taxes directly from guests, then remits those taxes to the relevant government jurisdiction. This streamlines the process for our Host community, improves the process for travelers, and has helped ensure that communities are receiving this critical tax revenue.
As tourism continues to grow, Airbnb remains committed to ensuring that communities can benefit fully from it, both through tax revenue and the spending that Airbnb guests drive into neighborhoods all over the world.
In order to achieve these objectives, thoughtful consideration must be given to creating clear, modern and simple tax collection systems. As our experience in countries around the world has shown, tax systems that are complicated, costly, and fail to apply to all online and offline actors, regardless of platform, risk doing more harm than good. Complicated tax systems also discourage full compliance from all providers in the travel sector, leading to less tax revenue for jurisdictions.
Since 2014, Airbnb has worked with local governments in reforming existing, and implementing new TOT legislation which achieves the goals and objectives of the government, the Host community and Airbnb. To that end, Airbnb is prepared to be a responsible and dependable partner to governments thinking about implementing tax systems and to our Host community in achieving compliance with relevant tax laws.
What makes an effective transient occupancy tax system
A centrally collected, broadly-applicable TOT system provides an industry-wide approach to collecting and remitting transient occupancy taxes to a local government. There are a number of considerations policy-makers need to consider when designing a TOT system, including:
Broad and equal application to online/offline transactions: TOT should apply equally to all online and offline business models (e.g., Airbnb, Booking, Expedia, newspapers). The simplest way to do this is to enact a broad definition of marketplace facilitator (or at local level, “platform” “booking agent”, or “operator”), with the intention of capturing the entire accommodation industry. It is important to bear in mind that many of the platforms in the accommodations space operate differing business models (e.g. some process payments and some do not). Therefore, it is crucial that the law captures all models.
Platform parity is essential for effective collection and remittance of TOT. Policy-makers must ensure platform parity is not only written into law but is also effectively enforced with actions taken against non-compliant booking platforms who are subverting the rules. This helps to avoid platform shopping from a compliant booking platform to a non-compliant booking platform by preventing people from subverting the rules by simply switching their listing to another booking platform operator.
If platform parity is not possible, jurisdictions should, at a minimum, require price display parity whereby all advertisements, offline or online, are required to display the tax within the final total price before checkout, even if the particular platform does not have the obligation to collect the tax. This maintains competitive parity between various players and, more importantly, acts as a consumer protection for would-be guests against “surprise” taxes after they have completed their transaction.
Centralized collection (State): TOT collection should be centralized as much as possible to reduce compliance burdens and minimize costs for industry and government alike. Platforms can still provide the state government with a local breakdown of taxes collected and remitted on the return so that the central government can distribute the funds accordingly. Centralization of tax administration is the key in driving full compliance by all parties in the travel sector, leading to the maximization of revenue generated from TOT collection in each locality within the state.
Equal treatment of STRs and “traditional” hospitality: STRs should pay the same TOT rate as “traditional” accommodation providers such as hotels, motels, and bed and breakfasts. This is not only fair, but it will improve compliance for platforms given that many have various types of accommodations listed.
Minimize compliance burdens for Hosts and platforms: Best in practice systems avoid adding administrative burdens to hosts and platforms, such as tax account registration, multiple tax filings, and/or the sharing of large amounts of information including personally identifiable information (PII).
Carve out for professional Hosts: If the law requires platforms to collect and remit taxes for all hosts, (i.e. it does not allow for certain types of hosts to be exempt), then all hosts, including hotels and professional operators, will be forced to amend their normal collection and remittance processes and associated tax compliance to reflect the fact that we’ve collected and remitted on their behalf. This creates havoc for them with their own internal processes and administration. A carefully crafted TOT ordinance will allow for certain hosts to continue to collect and remit the TOT from their guests without impacting the overall amount of tax remitted.
Impose tax on appropriate base: Ensure that the tax base is based on the amount charged for the stay by the operator, not on the amount the guest pays to complete the transaction, which includes fees imposed by the platforms/managers. This helps keep the cost of tourism down.
Privacy and data minimization: Consistent with data protection best practices and public safety, there is no justification for a public database of registered hosts or listings. Data protection laws must be followed strictly. Data collected for tax purposes should not be shared within a government for other purposes (e.g. immigration checks, short-term rental investigations, etc).
Trust and safety
We understand the need for robust trust and safety policies in order to help people trust one another. Airbnb has heavily invested in strengthening our platform policies and technology to help people trust one another. Promoting the online and offline safety and privacy of our community is Airbnb’s priority. Behind this work are cross-functional teams made up of experienced professionals with backgrounds spanning risk intelligence, law enforcement, military, and social work.
To promote community safety, we have implemented a series of initiatives and programs:
Ongoing identity verification for Hosts and guests. Airbnb requires every booking guest and every listing Host to be verified. When you book a stay or when you become a Host, we may need to verify your personal information, such as your legal name, address, phone number and other contact details. We may also ask for a photo of your government ID and a selfie.
Although no identification process is foolproof and we cannot guarantee someone’s identity, we take steps to help everyone to feel confident that guests and Hosts on Airbnb are genuine. This is why we have procedures in place to attempt to verify the identity of our users. Verifying the identity of guests and Hosts helps us to:
Scan for fraudulent behavior
Do background checks where permitted under applicable laws
Understand if a malicious actor has taken control of an account
Investigate safety and security issues such as assault, robbery or fraudulent activity.
Background checks in the United States. Keeping our Airbnb community safe is one of our top priorities. If we have at least an accurate first name, last name, and date of birth for a Host or guest, we’ll perform a background check in the US at certain times. More information can be found here.
Reservation screening technology to try to reduce the risk of disruptive and unauthorized parties, as well as enhanced measures around holidays.
Partnering with expert organizations through our Trust and Safety Advisory Coalition (TSAC) to advise on our policies, processes, training and community education. More information can be found here.
To promote consumer safety, we have implemented a series of initiatives and programs:
Secure messaging and account protection measures. We do our best to keep you safe by employing anti-abuse technology on the Airbnb platform. We’ll block potentially dangerous messages that contain words or numbers that might include contact information or references to other sites, including external links.
Secure payments through our platform, which helps to deter scams and financial fraud. Airbnb controls payments, and we do not release a Host’s payout for a booking until 24 hours after a guest has checked into a listing, so there’s recourse – including through our Guest Refund Policy – in case something isn’t as expected. This is a significant deterrent for anyone seeking to engage in scam listings or fraudulent behavior.
Extensive fraud and scam prevention efforts, including specialized fraud prevention agents and 24/7 support teams. We strive for zero tolerance for fraud, and use sophisticated technologies and behavioral analysis techniques to help prevent fraudsters from utilizing Airbnb. This includes a real-time risk detection system that uses machine learning and predictive analytics to instantly evaluate hundreds of risk signals to flag and stop fraudsters. When we detect potentially concerning behavior or such behavior is brought to our attention, we take action, including removing users and listings from the platform. More here.
A dedicated safety-focused Solo Traveler safety feature for guests traveling solo in a private or shared room on Airbnb. More information can be found here.
A double-blind review system — Hosts review guests, and guests review Hosts, with the reviews written before the other side of the review is revealed, providing more incentives to behave the right way.
To give Hosts tools to help keep their properties and communities safer, we have implemented:
Giving Hosts the ability to assess reviews of guests before accepting bookings and to limit bookings only to guests with positive reviews.
Offering Hosts free or discounted noise sensors to help deter noise and nuisance while respecting guest privacy, as well as free combination carbon monoxide detectors and smoke alarms to active, qualifying Hosts.
Education campaigns, such as our campaign on pool safety, in partnership with members of the TSAC, that includes expert tips and guidance for Hosts.
To promote neighborhood safety and quality of life, we have partnered with cities and implemented:
A ban on disruptive and unauthorized parties, pursuant to our community disturbance policy as well as maintained a prohibition on party houses.2
Partnering with Vrbo, an Expedia Group company, to develop the Community Integrity Program, an industry collaboration to strengthen action on the community threat of repeat “party house” offenders. Airbnb and Vrbo developed a process that identifies properties permanently removed from each platform due to repeated violations of respective policies, so each company can take appropriate action.
Support for policymakers and law enforcement to take action on problematic party houses.
A 24/7 Neighborhood Support Line to give neighbors the ability to communicate directly with us.
A dedicated portal for law enforcement to submit valid legal requests for information from us, available in nine languages.
And in the extremely rare case that something goes wrong, we try to act quickly and decisively:
Our 24/7 Safety Line offers assistance to Hosts and guests
Our in-app Local Emergency Services feature quickly connects users to local emergency services.
We may suspend or ban people who violate our policies, such as by throwing a disruptive party in a listing, and in some cases, we take legal action.
We may suspend or remove listings that fail to meet quality standards or cause severe neighborhood disturbances.
Our global community support team serves Hosts and guests in multiple languages, and we have a specialized team to work with local law enforcement when necessary.
Data and resource sharing via the City Portal
With Hosts in more than 100,000 cities and towns around the world, one of Airbnb’s priorities is to work with governments on fair, balanced short-term rental regulations that both protect the benefits of home sharing and help meet the unique needs of each community. To build on these efforts, Airbnb introduced the City Portal in 2020 – a first-of-its-kind resource for local governments and tourism organizations informed by years of work with governments around the world.
We launched the City Portal with 18 pilot partners. Today, more than 350 cities and tourism organizations – from Sacramento to Raleigh – have partnered with Airbnb to access this unique resource. The City Portal offers local leaders insights into Airbnb in their community and tools to help enforce their laws. Specifically, the City Portal’s technology offers governments and tourism organizations the following:
Local and global Airbnb data insights into short-term rental market characteristics. For example, tourism organization partners can see where guests are coming from and adjust marketing accordingly.
TOT revenue data in jurisdictions where Airbnb is collecting and remitting on behalf of the Host.
Centralized access to the Airbnb Neighborhood Support hotline and Law Enforcement portal. An official who needs to reach our law enforcement support team because of a safety incident can more easily find the applicable tool via the Portal.
In addition, the City Portal offers government and tourism partners access to an Airbnb team member that can help provide one-to-one support with the City Portal or issues that arise locally. For example, if an official has a question about our rules against both parties and “party houses,” they can easily reach Airbnb staff.
Case studies and model ordinances
Alexandria, VA
In Alexandria, every STR property must be registered annually with the Department of Finance within 30 days of the property being offered for rental. The registration process is simple and free. If the STR operator has revenue greater than $10,000 annually, and they rent more than four separate dwelling units, they must obtain an additional Business, Professional and Occupational License (BPOL). This approach empowers residents who share their home on an occasional basis to earn supplemental income without unnecessary regulatory barriers. Typical zoning or permitting provisions like maximum occupancy rules apply to STRs however, there are no zoning or permitting approvals specific to STRs. Alexandria’s STR ordinance can be found here.
Raleigh, NC
Raleigh, NC has embraced STRs as a way to boost tourism and their local economy. The City’s registration system requires STR Hosts to procure a zoning permit from the City. The zoning permit number authorizing the STR must be posted on all advertisements. STRs are allowed in all residential zoning districts and there is no limit to how often Hosts can rent space in their homes. The City also allows STRs in accessory dwelling units (ADUs), and enforces short-term rental rules on a “complaint basis”. Within six months of the regulations going into effect, the City reported having received only one complaint.
Tulsa, OK
Tulsa, OK recognizes that STRs play a substantial and positive role in the community. The ordinance requires an annual license for each short-term rental with a total fee of $375 renewed annually and classifies STR’s into two categories: Principal Use STR and Accessory Use STR. A Principal Use STR is a dwelling unit that is not the primary residence of a household and an Accessory Use STR is the primary residence of the household. The ordinance requires a local contact person who can be reached by the City 24 hours a day. Under the law in Tulsa, it is the responsibility of the STR operator to prevent nuisance behavior and maintain neighborhood peace and quiet. They require the license to be posted within the interior of the rental. STR operators who have properties with 5 or more rooms are required to collect a lodging tax of 5% from guests and remit to the city. Before this ordinance, all short-term rentals were required to go before the City Board of Adjustment for approval.
Midland, TX
Midland, TX passed a simple ordinance that only requires STR operators to collect and remit an 7% occupancy tax on the price of the rental.
Richardson, TX
Richardson defines a STR as a residential property that is rented wholly or partly for a fee for a period of less than 30 consecutive days. They require an annual registration with a fee of $75. They require materials to be posted at the STR location including this helpful neighborhood information guide. Visitors must comply with the existing noise ordinance and the city has a 24-hour response line for neighbors to report issues.
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