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Ed Bendetti change the bed sheets in the Fells Point rowhouse that he rents out on Airbnb. “It's been very busy, a lot more than I expected,” he said.
Ed Bendetti change the bed sheets in the Fells Point rowhouse that he rents out on Airbnb. “It's been very busy, a lot more than I expected,” he said. (Kenneth K. Lam / Baltimore Sun)

Airbnb, an online booking site for home rentals, was still in its infancy when Ed Bendetti splurged on a second property in Fells Point in 2008, drawn to the challenge of a renovation project.

Now, seven years later, with the upgrades complete and its own Web listing, the Dallas Street home has become something he couldn't have imagined: a small star in the city's travel scene.

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"It's been very busy, a lot more than I expected," said Bendetti, 49, a project manager. He posted the property on Airbnb around December and estimates that it's been booked almost every day since.

The Fells Point rowhouse that Ed Bendetti rents out on Airbnb.
The Fells Point rowhouse that Ed Bendetti rents out on Airbnb. (Kenneth K. Lam / Baltimore Sun)

More than 24,000 visitors to Baltimore stayed in an Airbnb rental during the 12 months that ended in March — more than double the year before, according to the company.

Stays through the site remain a tiny sliver of the tourism market in Baltimore, where more than 2 million hotel rooms were booked from April 2015 through March of this year, according to data on the city's central business district from the research firm STR Inc.

But many expect use of the site, which was founded in 2008, to increase as more travelers turn to it in search of affordability, offbeat locations or accommodations for a longer stay.

As the service spreads, governments — often with prodding from hoteliers — around the world are trying to bring the company inside the bounds of traditional regulations, concerned that users of the site are operating in a gray zone shielded from taxes and potentially running health and safety risks.

Airbnb tells hosts and guests they must comply with local regulations, including taxes, but that can be difficult to enforce.

The General Assembly passed a law this year clarifying that online booking companies like Airbnb are subject to the state's sales tax. Another bill, which did not move forward this session, would have authorized Airbnb to collect hotel and sales taxes on behalf of its users and send the revenue to the state, making the process more efficient.

"It's a large company," said Del. Mary Washington, a Democrat who represents Baltimore and worked with Airbnb on that bill. "Our current laws don't accommodate this particular industry."

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The vacation rental site Airbnb boasts more than 2 million worldwide listings ranging from a Scottish castle to a treehouse in the jungles of India. But you don¿t need a passport or a plane ticket to enjoy a getaway in a unique home. Local homeowners are offering up stunning spaces that will have you spending your ¿staycation¿ delighting in the design.

Airbnb has been a partner in many of these efforts, helping to craft tax collection agreements in about 150 jurisdictions around the world.

The recent collaborations make it different from some of its peers in the so-called sharing economy, firms such as Uber that have had well-publicized battles with local jurisdictions.

Spokesman Christopher Nulty says Airbnb thinks "good regulation" can make managing the taxes associated with the visits easier for hosts.

"We believe very strongly that to be regulated is to be recognized," he said.

The firm is in discussions in Baltimore, where Mayor Stephanie Rawlings-Blake and Visit Baltimore, the city's convention and tourism bureau, have said they want the firm's bookings to be subject to the city's 9.5 percent hotel tax and possibly other rules, such as inspections.

Under the current city code, a building must sleep more than five people to be considered a hotel.

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Airbnb is also in negotiations in Montgomery County, which last year changed the law to make Airbnb bookings subject to the hotel tax.

But Airbnb's participation in such regulations doesn't mean all of the company's hosts and customers are on board.

Several guests and hosts said they do not object to paying taxes, but it's unreasonable to consider them the equals of Baltimore's large hotels like the Marriott, some of which have received significant tax benefits from the city. And they said 9.5 percent is too steep and will discourage use, given that price is a key part of Airbnb's appeal.

"It's a bit of taking a cut from people that don't really have the money," said Claire Strock, 37, a teacher, who lists a room in her home near Wyman Park on Airbnb instead of having a roommate. She also uses the service as a visitor, saying Airbnb's affordability enabled her to take trips to Iceland and Philadelphia that might otherwise have been too expensive.

"It's a very different animal," said host Barbara Zektik, 36, a lawyer who lives in Fells Point who started listing her spare room on Airbnb this winter instead of having a roommate.

Ed Bendetti, who rents out this Fells Point rowhouse on Airbnb, said that if further taxes are imposed, he would hope to see Airbnb reduce its take from each transaction.
Ed Bendetti, who rents out this Fells Point rowhouse on Airbnb, said that if further taxes are imposed, he would hope to see Airbnb reduce its take from each transaction. (Kenneth K. Lam / Baltimore Sun)

A typical host in Baltimore earns about $5,200 annually and receives guests about 60 nights a year, according to Airbnb. Hosts are already responsible for paying income taxes on Airbnb earnings if they are booked more than 14 nights a year.

"There are a lot of hosts, myself included, who are just doing this to make ends meet," Zektik said. "I'm not an income-generation machine. I'm just paying my mortgage."

It's difficult to gauge Airbnb's impact on the hospitality market because the firm keeps much of its data private and the travel industry remains strong, said Jan Freitag, senior vice president at STR. A number of studies have reached different conclusions about whether the firm has affected demand for hotels or limited price growth in different markets.

Listings in Baltimore topped 1,000 at the end of March, increasing about 46 percent since the start of April 2015, according to Airdna, a firm that scrapes data from Airbnb's site. About 650 are frequently booked.

Secondary markets like Baltimore, where Airbnb was slower to catch on, are driving the company's expansion globally, said Scott Shatford, founder and CEO of Airdna. In mature markets, Airbnb bookings represent about 10 percent of total room nights, he said.

"Anything lower than that still has a lot of room to grow," Shatford said.

Amy Rohrer, president and CEO of the Maryland Hotel and Lodging Association, said urban markets seem to be more affected by the surge of Airbnb, but it remains unclear. Still, the organization is concerned that many hosts on the site are running mini-businesses with multiple listings.

The group wants Airbnb stays to be subject to taxes but opposed this year's General Assembly bill on the grounds that it established a separate process for Airbnb, allowing the company to deal directly with the state and not face the same disclosure and audit requirements as hotels.

"Short-term rental hosts, especially commercial operators, should not be able to hide behind these platforms and skirt regulations that give them a competitive advantage over Maryland hotels and bed and breakfasts," Rohrer said.

Tourism industry presses harder for support

Members of Baltimore's tourist industry are pressing harder for public support for advertising and new facilities, sounding a familiar refrain with new urgency as they face a downturn in visitors in the aftermath of April's riots.

While the average daily rate for an Airbnb listing in Baltimore is comparable to a hotel room, the Airbnb accommodation is typically larger, according to Airdna. About 43 percent of the Airbnb listings in Baltimore are entire properties, according to Airbnb.

Bendetti said that if further taxes are imposed, he would hope to see Airbnb reduce its take from each transaction.

Airbnb, which Bloomberg recently reported has established subsidiaries as offshore tax havens, earns money from the service fees attached to each booking, charging guests between 6 percent and 12 percent and hosts about 3 percent of the reservation, according to its website.

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"Airbnb is so big now that it would seem like they would try to cover some of the cost," said Bendetti, who estimated that he's made about $2,100 a month so far and recently decided his home's popularity merited a price increase. It's now listed for about $108 a night.

Airbnb's growth in other cities has led to concerns about its impact on neighborhoods and on housing affordability, but those issues have not come to the fore in Baltimore.

Washington, the state delegate, said she expects the issue to return during next year's legislative session, after input from a wider range of stakeholders and potentially creating tiers with different rules for less- frequent operators.

"I'm learning more about the issue," she said, "Certainly, as people are looking at alternative ways to deliver tradtional services, whether it's car rentals, taxi services or whether it's short-term housing and lodging, we really need to update our existing law to accommodate that, not to limit it."

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