Home-sharing companies such as Airbnb talk taxes, regulation at Capitol

Several pending bills seek to regulate the growing short-term rental industry

Lawmakers grilled representatives from short-term rental companies Airbnb and Homeaway on taxes, regulation and safety concerns Wednesday, previewing what will likely be a hot debate in the Capitol this year.

The companies appeared before a joint hearing of the Assembly committees on local government and revenue and taxation to discuss the implications of the increasing popularity of home-sharing services. 



A previous version of this post incorrectly stated that Homeaway was a member of the Internet Assn.


The rapid expansion of such companies has prompted new scrutiny surrounding their impact on housing markets and debate over local governments collecting taxes on the short-term rentals as they do for traditional hotels, which has been advocated for by the hotel industry.

"Regardless of who the competitor is, it’s only right that everyone who participates in this business follows the same rules and pays their fair share," said John Caldwell, a lobbyist for the California Hotel and Lodging Assn.

Airbnb has struck deals with individual cities such as San Francisco and San Jose to collect taxes; Los Angeles is exploring its own agreement with the company.

"The sharing economy is here to stay and we should be working together on progressive rules that help regular Californians pay their bills and pursue their dreams," said Christopher Nulty, a spokesman for the company.

No specific legislation was discussed at the hearing, but there are several pending bills that concern short-term rentals. A bill by Sen. Mike McGuire (D-Healdsburg) would require online vacation rental companies to disclose short-term rental information to cities and counties. Sen. Isadore Hall (D-Compton) is carrying a measure that would require companies to make more clear to their users that rentals could be in violation of their lease.

Another bill by Assemblyman Matthew Harper (R-Huntington Beach) would exempt short-term rentals from local hotel taxes.

Still, some lawmakers urged caution in crafting statewide regulations for these emerging businesses.

"When you try to get ahead of the curve with regulations, it really becomes not only over-burdensome, but also becomes not relevant to the issues at hand as this technology develops and enters the marketplace," said Assemblyman Matt Dabaneh (D-Encino).

Robert Callahan, a lobbyist for the Internet Assn., a trade group that includes Airbnb, praised the Assembly's "information-gathering approach" to the issue.

"Home-sharing companies like Airbnb have become a key part of the California economy and our state's public policy approach should be focused on fostering their continued growth, rather than limiting it," Callahan said.

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