Check out what happened last week in Portland: The city council there approved a resolution directing the city's budget office to take $1.2 million in taxes it gets from short-term rentals (like those listed on Airbnb) and direct that money toward affordable housing.
What's more, according to The Oregonian's editorial board, that will be the first dedicated stream of money for the affordable housing fund in question, and having that dedicated source of funding will allow the city to issue bonds. If issued, those bonds would mean even more money would become available to build affordable housing projects.
Seattle could be next.
In Portland, like in Seattle, rents are high and vacancy rates are low. The plan approved by the Portland City Council draws a direct connection between short-term rentals and the availability of housing for locals. If apartments and houses are being rented out to tourists, the thinking goes, those apartments and houses aren't available for locals. (As Shelby King has reported over at our sister paper, the Portland Mercury, that idea is complicated. While it's true that any apartment rented full-time to Airbnb users isn't available in the regular long-term rental market, the total number of units on Airbnb is just a small fraction of the city's total housing stock.)
A similar taxing scheme to Portland's was one of the 65 recommendations from Seattle's Housing Affordability and Livability Agenda (HALA) committee, which released its ideas earlier this year. The HALA committee didn't stake out a position on how much the tax should be (Portland's is 5 percent), but said the funds should be dedicated to affordable housing.
The city council will start talking about new regulations on Airbnb and similar short-term rentals early next year. They'll vote by the end of 2016, according to their HALA work plan. While that plan doesn't explicitly say those regulations will include a new tax, the idea is likely to at least generate some discussion since it was one of the committee's recommendations.
Council Member Mike O'Brien has been shepherding those recommendations through the council, but I couldn't immediately reach anyone at his office. (The whole council is on recess through the end of the year.) Council Member Tim Burgess told Publicola last month that Airbnb and other short-term rentals should follow local laws "and contribute to promotion of the hospitality and tourism sector... just like hotels and others in that sector do.”
Currently, Seattle hotels pay a 15.6 percent hotel tax. Airbnb announced this October it would collect the necessary taxes from its guests in Washington state and then pay those taxes, including local lodging taxes. But, unlike Portland, Seattle doesn't have a separate tax specifically on short-term rentals. That's what HALA recommended and what some housing advocates want, too.
Sharon Lee, director of the Low Income Housing Institute, nudged the city council on the issue again on Thursday, tying it to Seattle's homeless crisis.
"Given the state of emergency on homelessness," she wrote to council members, "we urge you to consider this dedicated funding source to produce much needed housing for homeless families and individuals."
According to Inside Airbnb, a site that analyzes listings on the site, Airbnb has about 2,700 listings in Seattle and about 41 percent of hosts have multiple listings, which means they're more likely to be running the rental as a business rather than just, say, renting out their apartment when they're out of town. (That's key to figuring out whether Airbnb is truly taking rentals off the market.)
The Portland City Council first took up its idea last year but rejected it. Some of the concerns from then bubbled up again this time, including fears that the earmark could end up taking money from other things and should have been handled during the council's regular budgeting process. As Seattle takes up Airbnb regulations and taxes, the discussion here could face similar hangups (or our very own San Francisco-style passive-aggressive ad campaign). Luckily, Seattle will have a whole year of process to figure it out—and we are great at process.