Dozens of people who host guests in Airbnb-style properties urged the Baltimore City Council Thursday to amend a bill that would impose new regulations and taxes on short-term rentals that hotel owners say have been unfairly exempt from the oversight applied to their businesses.
The hearing pitted the interests of traditional bed-and-breakfasts and hotels against those of hosts who are increasingly renting out spare rooms in their homes — or even their entire properties — on online home-sharing platforms.
The nearly 1,300 hosts who rented out 2,105 units in Baltimore last year generated $11.3 million in revenue that was not subject to the taxes applied to hotels. Hotels paid roughly $30.5 million in taxes in fiscal year 2017.
The bill introduced by Councilman Eric Costello and Council President Bernard C. “Jack” Young would apply Baltimore’s 9.5 percent hotel tax to short-term rentals and introduce licensing requirements for these properties.
Costello said the legislation is necessary to ensure neighborhoods don’t become “overly transient,” to establish a process for the city to swiftly remove problem hosts, and to collect up to $1 million annually in hotel tax revenue from short-term rentals.
Members of the Baltimore Hosts Coalition say they support many of the bill’s provisions, but oppose some of its restrictions. They want the council to remove a two-property limit and eliminate a provision that would allow them to rent units for only 60 days a year in a property that is not their permanent home.
Coalition members said those restrictions would put them out of business and drive more people out of a city struggling to grow.
Rachel Indek owns five rental properties in the city and manages 10 others.
“We’re willing to be licensed like businesses, we’re willing to pay taxes like businesses, but we need to be treated like businesses,” she said. “No one tells Marriott that they can only operate 60 nights a year.”
But others said short-term rentals such as Indek’s are giving Airbnb-style properties an advantage over hotels and bed-and-breakfasts. Without the proposed licensing requirements and tax, short-term rentals can sidestep the regulations that others in the hospitality industry must follow.
Linda Smith owns a small bed-and-breakfast near Camden Yards
“As a small business owner, I don’t think it’s right that I am penalized by all of these laws while others in the neighborhood don’t have to follow them,” she said. “I’m fine with home-sharing. What I don’t like is that there are businesses out there pretending that they’re not. They need to be made accountable.”
The legislation would introduce licensing requirements for short-term rentals. If hosts fail to comply with city building, fire, health and zoning rules, city officials could revoke their licenses.
Smith said her business, Rachael’s Dowry Bed and Breakfast, has seen fewer guests in recent months. She’s normally 100 percent booked during baseball season, she said. She might say the Orioles lackluster season is to blame, she joked, if she hadn’t seen guests pulling up to Airbnb-style properties nearby.
Hosts argue that short-term rentals boost tourism in areas of Baltimore outside the Inner Harbor. There are Airbnb-style properties sprinkled throughout Hampden, Hollins Market, Patterson Park and other neighborhoods. Many guests are traveling medics, summer interns and business people attending conventions.
Hosts — who showed solidarity by dressing in matching bright orange shirts — told the council that they steer guests to neighborhood restaurants and more “authentic” Baltimore experiences beyond downtown.
Brigitte Williams rents out her property on West Baltimore’s Fulton Avenue. She said she’s able to bring out-of-town visitors to a neighborhood they usually wouldn't visit, boosting support for local businesses.
Ridgely’s Delight homeowner Elizabeth Degi DuBois said short-term rental properties in residential areas also present problems for “neighborhood cohesion.”
Her 4-year-old son’s nursery overlooks a short-term rental property next door. The space is sometimes rented for bachelor or bachelorette parties that have awakened the boy late at night.
“If you have people using your house as a hotel, they’re going to act like hotel guests and not neighbors,” Degi BuBois said.
Cities across the country are reckoning with how to regulate the burgeoning home-sharing industry. Several are implementing laws similar to the Baltimore proposal.
The president of the Maryland Hotel Lodging Association has said that reining in commercial Airbnb operators is a top priority for her organization.
During one tense moment in the four-hour hearing Thursday, Costello rejected the assertion of a short-term rental host that he is in the pocket of hotel lobbyists.
An Airbnb representative said the San Francisco-based company is open to working with the city. It supports the tax but opposes the 60-day cap and limitations on licenses.
The short-term rentals would generate between $587,000 and $1 million in hotel tax revenues annually, according to the city’s recent fiscal analysis. If the cap and the licensing limitations were removed, the legislation could generate between $1.6 million and $2.2 million.
At least 40 percent of the revenue would go to Visit Baltimore, the city’s tourism arm.
The council has scheduled another work session before moving forward with the legislation.
“We’re hoping to compromise,” Costello said.