Seaside city councilors approved a no cost, voluntary deal with Airbnb last week to allow the short-term vacation rental giant to act as an agent for the properties they represent to collect lodging taxes and send collections to the city. The deal has that good for some, maybe not so good for others kind of feel.
For the city, it’s a good deal because those taxes — thousands of dollars annually — weren’t previously collected and represent an untapped revenue stream. Collections will be aided by software that tracks Airbnb short-term rentals and City Manager Mark Winstanley said there are no costs for the agreement.
Of course the elephant in the room is the question of why those taxes weren’t previously collected, and whether deals with other vacation rental firms will now be in the offing. Airbnb has deals with the state and 14 other cities and counties in Oregon.
But the Airbnb contract also raises the question of whether the accord will give the multibillion dollar company an unfair advantage over its commercial competitors, the area’s hotels and inns.
Terry Bichsel, owner of the Seaside Best Western Ocean View Resort and Rivertide Suites and a member of the Best Western International Board of Directors, asked councilors to delay deciding because he doesn’t believe the deal’s terms are equitable.
Bichsel advocated that all rental properties, whether managed by Airbnb or not, should have to register with the city the same as hotels, collect lodging taxes and abide by the same regulations and oversight. The agreement doesn’t do all of that, he said, which creates an unlevel playing field. He pointed out that the contract also limits the city’s ability to audit Airbnb’s reporting to only one year out of four. Bichsel urged the city to take time “to get it right.”
Cynthia Malkowski, who with her husband owns the Arch Cape Inn and Retreat, echoed Bichsel’s comments, After the council’s 4-2 approval of the deal, Malkowski said she was “stunned” the agreement was approved, and that the “contract with Airbnb creates a double preferential standard for Airbnb, one that greatly discriminates against local law-abiding businesses and exacerbates our housing crisis.”
Seaside has the highest number of Airbnb rentals across the region.
According to Airbnb’s public policy director for the Northwest, Laura Spanjian, 140 active Airbnb hosts in Seaside welcomed 14,000 guests during the past year. The typical host rents their home for two nights a month, she said. In Cannon Beach there are 30 active hosts who welcomed 6,000 guests in the past year, with the typical host renting fewer than 30 nights a year. In Astoria there are 50 active hosts with 6,000 guests over the past year with 80 percent of the hosts renting their home for fewer than 90 nights a year, she said.
The Airbnb agreement goes into effect July 1 and has a 90-day termination clause. Councilors shouldn’t hesitate to exercise it if the deal shows any signs of inequity that Bichsel and Malkowski referred to.
The issue of vacation rentals has been extremely divisive between year-round homeowners, vacation rental owners and their commercial competitors across the region.
The issue, however, isn’t whether vacation rentals should be allowed, they already exist, with limitations. What’s really at stake is fairness and recognition that vacation rentals are a business — especially when the large rental facilitators like Airbnb are involved. Dollars are changing hands between owners and visitors each time the homes are rented. Those transactions should be subject to similar lodging taxes and oversight as hotels and inns face so all are on a fair playing field. They need to be efficiently monitored so cities benefit from the tax collections with the least amount of overhead and bureaucracy.
Fairness is key, though, and it should be closely watched.