Columbus closer to regulating Airbnb rentals, generating more revenues for the city

Columbus took a major step toward regulating short-term property rentals — such as those listed on the popular Airbnb website — during its council meeting Wednesday evening.

The city received a unanimous verbal vote from council members favoring adoption of an amended unified development ordinance that will require short-term property renters — referred to as “hosts” by Airbnb — to complete a number steps before doing business, including licensing and background checks, while also collecting tax revenue for Columbus.

“What this amendment does is it requires a background check on the owner of the property, and if there is a short-term agent affiliated with the property, that person also has a background check,” said councilor Judy Thomas. “This is the same kind of background check that our Inspections and Codes Department does with other types of businesses in Columbus.”

During the previous Sept. 11 council meeting, Thomas had expressed concern about some of the ordinance regulations not truly being necessary. At the time, she had questions about the need for background checks, as well as the requirement that a short-term property renter — which is classified as renting less than 30 days — be available within two hours of being called by city staff or law enforcement during an emergency or for major complaint.

After meeting last week with city planning and code enforcement staff, the councilor said she was assured that the background checks were necessary for safety reasons, and that most of the requirements under the amended ordinance were already being demanded of businesses in the city.

She said the rule calling for rental owners to be on site within two hours will not be included, but there will be a requirement that a document be posted in short-term rental units listing the name and phone number of someone to call if a concern or emergency arose. That can include loud noise, music and other disruptions by guests, or perhaps neighbors disturbing the Airbnb customers.

“I believe that we are to the point now where we can adopt this proposal, this ordinance, and it will do what we need to have done,” Thomas said during Wednesday’s council meeting. “It will make sure that those people who have short-term rentals in Columbus have a business license and pay the property taxes, the hotel-motel tax and any sales tax.”

The amended ordinance is expected to return before Columbus Council at its next meeting in October for a second reading, followed by a formal vote of record on its adoption into city regulations. No other councilors have spoken out against the proposed rules to regulate such rentals that are popular with users of online sites such as Airbnb and VRBO.

The city’s Finance Department, along with the Building Inspections and Code Enforcement Department, developed the requirements aimed at getting a handle on the online lodging marketplace that connects individuals wishing to rent their home, cottage or bedroom to those visiting the city and needing a place to stay.

The Columbus area has nearly 100 listings on the Airbnb site, including properties 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 about $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. 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.

The Finance Department also will be collecting income that it is not already doing, with city staff saying an annual background check will cost $20 per person. The administrative fee to process the business license will be $75, while Airbnb hosts will 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.

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.

Hugley, in the previous council meeting on the matter, read a statement from the Georgia Municipal Association on the need to regulate short-term rentals for quality of life and public safety reasons, as well as to maintain a competitive lodging marketplace.

“Unregulated, unlicensed short-term rental providers are undermining the hotels, motels and traditional bed and breakfasts around the state by not paying taxes or following health and safety standards,” said the GMA statement, which also notes the issue will be on the association’s legislative agenda in the General Assembly session in January, with any laws passed there creating statewide rules and regulations.

The short-term rentals already are a very sore point for bed and breakfast owners in general, with Mamie Pound, owner of the Rothschild-Pound House Inn bed and breakfast, which she opened in 1995 with three rooms, calling for the need to bring them under the same requirements that she has faced for years.

Appearing at the Sept. 11 council meeting, Pound ticked off the city’s requirements for her lodging establishment to include inspections by the fire marshal and health department, with combined fees of about $700 per year. There’s a $300 annual fire alarm inspection, as well as $25 per month for a fire monitoring system. She also purchases business licenses totaling $3,200 per year, while also collecting hotel-motel taxes and sales tax for the city.

“If I do not collect hotel-motel taxes and pay them in a timely manner, I can be dragged into court,” she said. “If I fail on any of the above, my business can be shuttered. I have an employee ID number with the IRS. I have to have workman’s comp. I have to file and pay the Georgia Department of Labor quarterly and yearly even though I only have two employees. I have to pay commercial rates for water, power, gas and insurance.”

Pound said her bed and breakfast business has generated nearly $1 million in hotel-motel taxes for Columbus since opening more than two decades ago. She asked at the meeting if the city is “so wealthy” that it has no need for additional tax revenue it could receive from the short-term property rentals.

“Airbnbs in our city, operating a business just like mine, can sell rooms for $40 to $60 a night,” she said. “They have no regulatory fees. That hurts my business. It’s almost impossible to compete with that.”

Ernie Smallman, a Columbus real-estate broker who has four Airbnb properties and plans more, said at the meeting that he has looked at regulations for short-term rentals in Nashville, Tenn., and found some rules that they might work locally. They include breaking the rentals into two classifications, investors and homeowners, and applying appropriate regulations such as background checks for the latter group.

“Another thing Nashville requires is that you notify all your neighbors of your contact information and what you’re doing, and that will allow neighbors to call you instead of calling the police if there’s an incident, or just call you if there’s a nuisance,” he said.

This story was originally published September 26, 2018 at 6:35 PM with the headline "Columbus closer to regulating Airbnb rentals, generating more revenues for the city."