Columbus looks to place new rules and fees, collect revenue on Airbnb rentals

Columbus is moving toward regulating the popular online lodging marketplace called Airbnb, which connects individuals wishing to rent their home, cottage or bedroom to those visiting the city and needing a place to stay.

The city’s Finance Department, along with the Building Inspections and Code Enforcement Department, has developed recommendations to amend a unified development ordinance that would require short-term property renters — referred to as hosts by Airbnb — to complete a number of steps before doing business.

“Georgia is just getting in play with this. This is a hot topic across the nation and every city is trying to wrap their heads around what do we do and how can we be fair to our other business owners who operate hotels,” city revenue manager Yvonne Ivey said during a recent Columbus Planning Advisory Commission meeting.

“We looked at other cities, Savannah and even New Orleans, and we tried to mimic what they put into play because it’s already in action,” she said. “Everything is a work in progress as we go along and try to better this.”

The Columbus area has about 140 listings on the Airbnb site, including homes and cottages in the downtown Historic District and the Midtown area. Some are entire houses for rent, with others a private room with a bed. Prices can range from around $40 upward to more than $100 nightly, with Airbnb tacking on its own fee to guests and hosts.

The proposed rules for the short-term rentals include requiring hosts to complete a permit application and criminal background check. They also must purchase a business license, which will be renewed annually, while also listing someone as a 24/7 contact person should city officials or law enforcement need any information in an emergency.

The amended ordinance also would require short-term rental properties to have proper insurance, smoke detectors, fire extinguishers and an exit escape plan in place for guests staying in rental homes. Hosts also would be required to have no unpaid financial obligations to the city before renting, while also notifying property owners of the rentals taking place should the host not own the dwelling themselves.

“If they are renting a house from somebody and they want to sublease a bedroom in that house, we make sure that the property owner’s notified and that they know that’s going on at that property before we’ll accept the application,” said John Hudgison, director of Codes and Enforcement.

Those in violation of any codes would go before Recorder’s Court, with first violations drawing a $500 fine, escalating to $750 for a second and $1,000 for a third violation within the preceding 12 months. There would be an appeals process, which would be heard by City Manager Isaiah Hugley or another authorized person.

The Finance Department also will be collecting income that it is not already doing, said Ivey, pointing out an annual permit will cost $40 and an annual background check $20 per person. The administrative fee to process the business license would be $75, while Airbnb hosts would be required to pay a gross receipts tax. The current rate in the city for transient lodging and hotel operators is $3.21 per $1,000 in taxable gross receipts.

“Right now, we’re trying to manage the Airbnb craze that is going on. So we just want to get ahead of it,” John Renfroe, principal planner with the city’s Planning Department, said of the reason for the ordinance change and new rules being sought by the city.

San Francisco-based Airbnb Inc. was launched in August 2008 to help connect travelers with places to stay and find a restaurant or tourism activity such as a walking tour. It has grown to more than 5 million listings in 81,000 cities and 191 countries around the world, with more than 300 million “guest arrivals,” according to its website.

Airbnb also provides information on its website for those wishing to be hosts, advising them to be aware of legal and regulatory issues within the cities and areas that they are renting to people.

“Some cities have laws that restrict your ability to host paying guests for short periods,” Airbnb says. “These laws are often part of a city’s zoning or administrative codes. In many cities, you must register, get a permit, or obtain a license before you list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement.”

Hudgison said Columbus Council already received a briefing on the new rules in early July, with a first reading of the amended unified development ordinance scheduled before council on Aug. 28. Any changes would need approval of the city’s elected body.

The new requirements received a mostly cold shoulder from the Columbus Planning Advisory Commission on Aug. 1. Eight members unanimously denied its approval of the ordinance change along the lines that it was being somewhat heavy-handed and placing another layer of regulation and costs on what now is simply a cottage industry in the city. The PAC vote up or down is non-binding, with council the ultimate authority for approving or denying any changes to city regulations.

“This is not against you guys. We’re looking at the policy,” commission member Teddy Reese explained to Ivey and Hudgison. “It just seems like it’s unnecessarily overly burdensome for someone trying to engage in a small rental of their property for under 30 days.”

PAC member Michael Greenblatt took issue between the difference in rules for those renting their homes short term through Airbnb and property owners who lease their dwellings to individuals for longer than the 30 days, often a year or more. He noted some Columbus landlords have multiple rental houses that they lease long term routinely, but aren’t required to go through the same rigorous permit and background check process, and other rules and financial obligations that are on the table.

“They have scores of rental houses and that is a commercial enterprise for them. I would argue if I were trying to rent a house, it is a commercial (entity) whether I rent one or 10,” he said.

Ivey’s response was the short-term rentals are in competition with hoteliers operating in the city, and that they already abide by the regulations in place. Columbus has more than 4,000 hotel rooms in its lodging inventory.

“They have a true argument,” she said. “We’re having to pay sales tax, we’re having to pay 8 percent lodging tax, we’re having to pay occupation tax. I might as well go underground myself and do the same thing. So that’s what we’re trying to do is make this as equitable across the board as much as we can.”

Commission member Joseph Brannan questioned if there was some sort of rampant Airbnb problem in which unsafe homes needed to be scrutinized more with background checks and an overzealous permitting process. He also asked if perhaps Columbus Consolidated Government should go after Airbnb when it comes to collecting any gross receipts tax money owed the city.

“I just have a problem with it restricting an economy. It’s another layer of bureaucracy and red tape,” Brannan said. “If somebody in Columbus (is) trying to get ahead and they want to rent out their room on a short-term basis because they’ve got a nice place downtown and it helps them get ahead, this is just one more thing. … There are already laws. If you’re (renting) under 30 days, you’re supposed to be following the hotel laws. So this is just adding another layer to what already exists.”

Whether or not short-term rentals through Airbnb or any similar entity should be regulated aggressively drew comments from both sides of the issue online.

“Let’s be this heavy handed on regular rental property,” Dorris Bishop posted on the Ledger-Enquirer’s Facebook page, while James Bezner agreed. “Exactly, regulate the slumlords out of business!”

On the other hand, Chris Walter voiced his approval on the L-E website that the city is “finally” moving to exercise control over the budding enterprise in residential neighborhoods. He described noise and multiple cars parked on the street, with police being called at times “due to the chaos.”

“We’ve had two Airbnb’s right next to us for over a year. One was finally sold last month to a nice family,” he said. “I am so happy to have a ‘real’ neighbor again. That particular Airbnb was such a nuisance with its parties and ‘house raves.’ You would never know, day to day, what you would have to deal with ... I feel it’s the neighbors that really pay for having an Airbnb next to them, while the people running them just collect all the money. If I wanted to live next to a hotel/motel, I wouldn’t have moved into a nice, historic neighborhood.”

This story was originally published August 19, 2018 at 7:51 AM.