Short Term Rentals Wri En & Presented By
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Short Term Rentals Wri$en & Presented by title stream A Land Title Company Background • Worldwide • In 2004, Casey Fenton founded CouchSurfing • In 2008, Brian Chesky and Joe Gebbia founded Airbnb • New Orleans • In the past, rentals of fewer than 30 days were illegal (60 days in the Quarter) • December 1, 2016 - the City Council adopted the new STR ordinances • April 1, 2017 – New Ordinances took effect • May 15, 2017 – New Orleans began enforcement • By May 15, the city received approximately 3,000 applicaons, issued 1,210 licenses, and approved 384 more applicaons. 290 applicaons had been rejected. Short Term Rentals | Just How Big is the Industry? What is a Short Term Rental? • The New Orleans Comprehensive Zoning Ordinance defines STRs as a: • Rental of all or any por\on thereof of a residen\al dwelling unit for dwelling, lodging or sleeping purposes to one party with duraon of occupancy of less than thirty (30) consecu\ve days. • Hotels, motels, bed and breakfasts, and other land uses are explicitly defined and regulated separately from short term rentals and are not considered to be short term rentals. • Common bathroom facili\es may be provided rather than private baths for each room. • A short term rental is further defined as Accessory, Temporary, or Commercial. Short Term Rentals | Just How Big is the Industry? Short Term Rentals • Each unique address must be registered (or have a license), but individual lis\ngs within the same address do not need a separate license permit number. • For example, your property at 500 Main St. needs one license permit number, whether you list the en\re space as one rental unit or list mul\ple private rooms at that address. • Must prominently display license on front of house • Use for Commercial or Social Events is prohibited • Shall not adversely affect residen\al character and shall not generate noise, odor, vibraon, glare, or other effects that “unreasonably interfere with any person’s enjoyment of his or her residence” • Cannot be operated outdoors, in an accessory structure, or in a recreaonal vehicle Short Term Rental Permits | Pros VS. Cons Accessory Short Term Rental • Must be owner occupied • Requires Homestead Exemp\on as proof of owner occupancy • May rent spare rooms in single family unit OR the other half of a double • Cannot rent the en\re dwelling! • Limited to 3 bedrooms and up to 6 guests • No limit on rental nights/year • License - $200 Temporary Short Term Rental • Not required to own the property OR be present • May rent a whole one family unit or one side of a double • Limited to 90 nights per year • Limited to 5 bedrooms and up to 10 guests • License • With homestead exemp\on - $50 • Without homestead exemp\on - $150 Commercial Short Term Rental • Must be in a Non-residen\al district • Limited to 5 rooms and up to 10 guests • 1 parking space required per 2 rooms • No limit on rental nights/year • License - $500 What is a Bed & Breakfast? • A residen\al structure that provides sleeping rooms for overnight paid occupancy. • Accessory - An owner-occupied building which provides no more than four (4) guest rooms for overnight paid occupancy of up to thirty (30) nights. • Principal - An owner- or operator-occupied residen\al structure that provides no more than nine (9) guest rooms for overnight paid occupancy of up to thirty (30) nights. • Common bathroom facili\es may be provided. • Only one permied per block. What is a Hotel or Motel? • An establishment providing a room for sleeping accommodaons for a fee • Requires private bathroom facili\es • Allows related ancillary uses like conference and mee\ng rooms, restaurants, sale of convenience items, bars, and recreaonal facili\es • Allows units for sale or for permanent residen\al use in some districts What is a Hostel? • An establishment providing sleeping accommodaons for a fee in a sociable accommodaon where guests can rent a bed in a dormitory and share bathroom, lounge, and kitchen facili\es. Short Term Rental Fees and Taxes • ANNUAL LICENSE FEE • Accessory License: $200 • Temporary License: $50 with homestead or $150 without • Commercial License: $500 • HOTEL/MOTEL SALES TAX • 4% of rental rate • Example: If you rent for $100, the hotel/motel tax due to the City is $4 • HOTEL OCCUPANCY PRIVILEGE TAX • $0.50 per night of rental and assessed according to the number of rooms available • CITY OF NEW ORLEANS FEE • $1.00 fee for every night of rental occupancy Bed & Breakfast Fees and Taxes • Similar to Accessory Short Term Rental but requires an Occupaonal License • ANNUAL LICENSE FEE • 1 - 2 rooms - $200.25 • 3 - 5 rooms - $600.25 • 6 - 9 rooms - $0.00 • OCCUPATIONAL LICENSE TAX • $2.00 for each sleeping room per year if six (6) or more sleeping rooms • SALES TAX • 4% sales tax OR if less than 6 rooms, sales tax does not apply • HOTEL OCCUPANCY PRIVILEGE TAX • 3 to 9 rooms w private bathrooms - $0.50 per room per 24-hour period Short Term Rental ReporJng Requirements • Taxes and Fees are reported to the Bureau of Revenue on a monthly basis using Form 8010 • Reports must be submi$ed by the 20th of the month following the month of collecon • The $1.00 per night fee is remi$ed separately • AirBnB offers “pass-through” registraon where the company will collect and pay all the fees for you • AirBnB also shares the following info with the city: • Host name, contact info, and Tax Assessment address • Type of Permit • Number of bedrooms in the lis\ng • Address of Unit being registered Short Term Rental PenalJes • Penal\es may include (but are not limited to): • Revocaon of the short term rental license permit • Daily fines • Property liens, and/or • Discon\nuance of electrical service EnForcement Updates Short Term Rental Homeowners Insurance • Requirement: Must have $500,000 in liability insurance • Other Requirements: • Smoke detectors, fire ex\nguisher, emergency contact info, floor plan, no\fy neighbors, paid taxes • Recommend coverage for: • their building, • their contents, • their income, and • their liability. Homeowner and Condo AssociaJons • If the Associaon is established and does not address rentals à adding new rules will depend on the specific rules governing that Associaons • If the Associaon is established and restricts à not all bylaws that restrict rentals apply to short-term rentals • Short term rentals are classified as license agreements because unlike in the landlord-tenant relaonship, possessory and access rights are not transferred to the renter. • Many Associaons require property to be “single family” and “residen\al,” but many courts have held that short term rentals do not violate the residen\al-purpose requirement. • The city ordinance for Short Term Rentals requires renters to get property owner’s approval but no such requirement for approval from an Associaon HosJng PlaNorms • The Comprehensive Zoning Ordinance defines hos\ng plaorms as any marketplace that facilitates short term rentals through adver\sing, matchmaking or other means, from which the plaorm derives revenues, including booking fees or adver\sing revenues, from or maintaining the marketplace. • Other plaorms besides AirBnB: • VRBO • Mister B&B • Couch Surfing • Hospitality Club • Servas Internaonal • Tripping.com • Workaway • WWOOF Short Term Rentals | The Sharing Economy Short Term Rentals in San Francisco • San Francisco, CA - The city requires a detailed in person applicaon process and has strict rules for permanent occupants. • Permanent occupants must reside in the home being rented for a minimum of 275 nights in a calendar year, and must live in the unit for at least 60 consecu\ve days prior to applying. You may rent the en\re space while you are absent for up to 90 days per year. • Up to 30 consecu\ve nights • $250 Permit Fee • 14% Transient Occupancy Tax • Requires $500,000 Liability insurance • Some hosts in rent-controlled proper\es are limited on the amount they may collect each month • Requires quarterly reports Short Term Rentals in Portland • The city requires short-term rentals have permits and undergo inspec\on. • Up to 30 consecu\ve nights • Duraon of license – 2 years • City of Portland Tax: 6% (5% to City general fund; 1% to Travel Portland) • Multnomah County Tax: 5.5% • Accessory Short Term Rental Permit – requires owner occupancy for at least 270 days per year • Type A Permit – up to 2 rooms; requires a safety inspec\on • Type B Permit – 3 to 5 bedrooms; you will be assigned a case planner and it requires site inspec\on or a self-cer\ficaon for the same safety features as Type A • 6 or more rental rooms require addi\onal commercial building code and zoning code regulaons Short Term Rentals in Other CiJes… • New York, NY • NYS housing law states that Mul\ple Dwelling buildings are for permanent residents only. Law-makers are also moving forward with law banning the adver\sement of illegal short-term rentals. • Aus\n, TX • The city allows for four different categories of short-term rentals, caps the number of permits, requires insurance and occupancy cer\ficates. • Miami, FL • The city has strict zoning districts, many which prohibit vacaon and short-term rentals in all single-family and a majority of mul\-family housing buildings. Lis\ngs must be approved by the city. • Denver, CO • Short-term rentals are currently legal, but the city government is moving forward with law to ban STRs. .