Our view: Potential benefit for local housing
Airbnb, the popular online rental marketplace, and the city of Steamboat Springs have reached an agreement by which the company will begin collecting sales and lodging taxes on its local rentals.
The city should consider using the additional tax revenues to address the workforce housing shortage
Last week, the city of Steamboat Springs reached an agreement with Airbnb — the popular peer-to-peer, online marketplace that allows users to list and rent short-term lodging in residential properties — by which the company is now collecting and remitting the required sales and lodging taxes on local rentals.
Prior to the agreement, Airbnb only facilitated the process of connecting lodgers to available properties, and the collection and remittance of sales and lodging taxes on such rentals was left up to individual property owners.
The new arrangement garnered immediate praise from city officials, who have long suspected that not all local Airbnb hosts have been collecting and remitting the required taxes. Complicating the issue is the fact that Airbnb doesn’t share addresses or names of property owners who use the service, making it difficult or impossible for the city to determine which hosts weren’t in compliance.
City Finance Director Kim Weber said the arrangement with Airbnb will work to level the playing field for people who list their properties on Steamboat’s short-term rental market.
“It’s a step in the right direction to get them into compliance with our local municipal code,” Weber told Steamboat Pilot & Today last week.
And while the city has no estimate on how much revenue it has been losing in uncollected sales and lodging tax associated with Airbnb rentals, the company reports more than 1,300 local properties have used Airbnb to generate bookings in recent years, so Weber thinks the potential increase may be significant.
“It could be a substantial amount of revenue,” she said.
Considering the potential for a significant increase in local sales tax revenue, we join city officials in praising the agreement.
At the same time, however, it occurs to us that the very existence of Airbnb properties in the city has the potential to act as a drain on the city’s already scant seasonal housing inventory. Only last week, Ski Corp. announced it would supplement the rental rates collected by residential property owners who offer affordable rentals — $500 per month or less — to its seasonal employees with a $200 cash incentive per month.
Ski Corp.’s offer is a tangible demonstration of our continuing shortage of affordable workforce housing in the city, some of which is undoubtedly being consumed by Airbnb rentals.
With that in mind, perhaps the city could consider earmarking a portion of the added sales tax receipts it stands to realize through its agreement with Airbnb to develop additional workforce housing. We realize the city has numerous needs, but few are as pressing as the need for affordable housing, and using the extra tax revenue generated by Airbnb rentals to bolster the local housing inventory that may be consumed by Airbnb rentals seems, to us, like a great tradeoff.
We have a new tax source, but we also have a workforce housing problem. Why not use the former to help alleviate the latter?
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