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Seaside inks tax deal with Airbnb

Vacation rental firm to collect lodging taxes
By R.J. Marx

The Daily Astorian

Published on June 13, 2017 9:21AM

Last changed on June 13, 2017 9:22AM

City Manager Mark Winstanley and City Attorney Dan Van Thiel at Monday’s discussion of Airbnb’s voluntary tax collection agreement.

R.J. Marx/The Daily Astorian

City Manager Mark Winstanley and City Attorney Dan Van Thiel at Monday’s discussion of Airbnb’s voluntary tax collection agreement.

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Terry Bichsel asked city councilors to postpone a decision on Airbnb’s voluntary tax collection agreement.

R.J. Marx/The Daily Astorian

Terry Bichsel asked city councilors to postpone a decision on Airbnb’s voluntary tax collection agreement.

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SEASIDE — Few companies come to the city asking to pay taxes.

But that’s what Airbnb did, presenting a voluntary agreement to collect thousands of dollars of lodging taxes on Seaside vacation rentals.

“Right now, unless the host is going to collect from the individual staying at the property individually, there’s really no other way to collect bed tax from Airbnb stays in Seaside,” said Jon Rahl, the city’s assistant general manager and tourism marketing director.

According to the agreement, City Manager Mark Winstanley said, Airbnb will act as agent for the properties they represent. Airbnb will send collections to the city — money previously untapped.

“Up until now they’ve kind of flown under the radar screen,” Winstanley said. “Now they’re saying they’re willing to identify themselves and that’s certainly advantageous to us.”

Collection would be aided by a short-term rental software program that would “help make sure Seaside is properly collecting lodging tax from those renting any housing unit as a short-term rental,” according to Rahl in a May staff report.

There are no costs for the agreement, Winstanley said. If short-term rental-tracking software is purchased, first-year setup would be $8,000 with a cost of $5,000 per year the following year.

“I believe the agreement with the city is OK,” City Attorney Dan Thiel said. “There’s money out there, a revenue stream, and I want this community to take advantage of it.”

Van Thiel said the city could opt out of the agreement by providing 90 days notice.


Terms questioned


At a public hearing in May, Cynthia and Stephen Malkowski, husband-and-wife owners of the Arch Cape Inn and Retreat, called the Airbnb voluntary agreement a “red herring” that will give the company an unfair advantage over other hotel owners, and ultimately drain affordable long-term housing units to the vacation rental market.

The couple’s concerns led to a tabling of the discussion until Monday night’s reopening of the public hearing.

Terry Bichsel, owner of the Seaside Best Western Ocean View Resort and Rivertide Suites and a member of the Best Western International Board of Directors, urged councilors to delay a decision on the agreement.

“They (Airbnb) operate illegally in most jurisdictions and where they’ve been regulated is where they begin operating legally,” Bichsel said. “It’s a $30 billion company. It’s bigger than Hilton. It’s bigger than Marriott. It’s huge. This is not some little mom-and-pop organization.”

Bichsel objected to terms of the agreement that would limit the city’s ability to audit Airbnb’s reporting for only one year out of four.

“That doesn’t make sense to me,” he said.

Bichsel said all rental properties — whether managed by Airbnb or others — should be required to register with the city in the same way as hotels, with the same degree of oversight and responsibility.

“I would just ask that we have a level playing field and make sure that Airbnb is treated the same way as the hotel requirements, whether it’s requirements for safety, accessibility or collection of rents,” Bichsel said.

He asked councilors to look at things “long term, not short term.”

“I’d encourage you not to sign this tonight,” Bichsel said. “Spend a little more time to get it right.”


Split council


City Councilor Tom Horning said the issue could provide an opportunity to lay out goals for affordable housing and the impacts of Airbnb and other vacation rental companies. According to one study, in Venice, California, rents rose 12 percent due to a shortage of housing caused by a surge of Airbnb rentals, Horning said.

“It expels a lot of people from their homes,” he said. “People are choosing to evict in exchange for higher-paying vacation rentals. I think we need to explore this and see where this trend is going.”

Along with Horning, Councilor Tita Montero urged postponement of the decision until more data on the impacts of rentals can be collected. “I think there a lot of policy considerations that we need to talk out,” Montero said. “What all will they find in the community that we don’t know about?”

But postponing the vote could lead to lost revenue, Councilor Steve Wright said.

The ability to terminate the contract within 90 days swayed Councilors Randy Frank and Dana Phillips to vote for the agreement. They were joined by Wright and Mayor Jay Barber in the 4-2 adoption.

Collections begin in July. Airbnb will not be liable or required to produce any personally identifiable information relating to any host or guest regarding any booking transaction. As discussed by councilors, Seaside or Airbnb may provide 90 days written notification for termination of the agreement.

“I am frankly stunned by the actions of the Seaside City Council in voting to sign a contract with Airbnb that creates a double preferential standard for Airbnb, one that greatly discriminates against local law-abiding businesses and continues to exacerbate our housing crisis,” Cynthia Malkowski said in a statement after the meeting.


Airbnb hosts


Laura Spanjian, Airbnb public policy director for the Northwest, said 140 active Airbnb hosts in Seaside welcomed 14,000 guests over the past year, with the typical host renting their home for two nights a month.

In Cannon Beach, 30 active hosts welcomed 6,000 guests over the past year, with the typical host renting their home for fewer than 30 nights a year. In Astoria, 50 active hosts welcomed 6,000 guests over the past year, with 80 percent of hosts renting their home for fewer than 90 nights a year, Spanjian said.

Portland and Lane County have signed similar lodging tax collection agreements with Airbnb.



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