Over-regulation or market correction? Seattle takes on Airbnb

The Seattle City Council knows how to pack its chambers with interested Seattleites: regulation.

Locals crowded the city council’s Affordable Housing, Neighborhoods and Finance Committee meeting to plead with members to carefully consider new regulations on the rental housing market. The public comments lasted longer than an hour.

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The proposed regulations would be on services such as Airbnb or VBRO – apps and websites that allow property owners to rent rooms, apartments, homes and even RVs. Use of the services are wide ranging from, for example, people staying a night while passing through town, or staying much longer while working an internship.

Under the regulations, properties that aren’t occupied by permanent residents would be prohibited from having more than 90 nights of short-term rentals per year. Councilmember Tim Burgess insists the rules are needed to maintain affordable housing in the city by freeing up housing inventory. In other words, Seattle needs more housing and the travel rentals remove units from the long-term housing supply.

The city believes that 80 percent of Airbnb providers would not violate the 90-day rule and therefore would not be affected by any regulation. Those who rent for longer than 90 days would be required to get a business license and pay applicable taxes, as well as share quarterly rental data with the city.

Burgess notes that the discussion over the proposed regulation will likely continue into July while the ordinance is drafted.

Arguments around Airbnb

Some property owners want more city regulation and maintain that condo neighbors are ruining their buildings with short-term stays – cramming in more than double the number of people that should occupy a unit.

But other Seattle property owners argue otherwise, despite the bad apples.

“The city council’s estimation is that this will change, maybe, 300 units – we’re talking one-tenth of 1 percent of housing in the City of Seattle,” said Derek Eaton, who owns Seattle Vacation Oasis Rentals.

Some property owners said that condos should regulate themselves and make rules for the short-term rentals, even ban them if needed. Others argued that the proposed regulations threaten their livelihoods as they need the income while entering retirement, recover from the recession, or as side income. Others pointed out that regulations should target those who are abusing the system and not the Average Joe trying to make ends meet.

Another argument is that rentals on Airbnb or VBRO are not the same types of units the city needs to increase housing.

“I think there is some confusion over the quality of the market introduced from Airbnb,” said Andrew Zita, another concerned property owner. “That inventory has never been a candidate for affordable housing in the first place.”

“The tenancy is much different, therefore, it’s not even the same inventory,” he added. “Even if we had to revert to long term (rentals), it would still be at the high end of any kind of investment.”

Airbnb says its community has contributed $180 million into the Seattle economy, housing nearly 200,000 travelers to the region.

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