Housing Advisory Commission passes recommendations regulating short-term rentals

Jiahao Huang/Staff

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At a Thursday meeting, the Housing Advisory Commission passed a set of recommendations regulating short-term rentals and including listings on platforms such as Airbnb and Flipkey.

The commission passed six proposals that are in accordance with seven of nine guidelines referred to it by Berkeley City Council. It chose to take no action on whether a unit may be rented for more than 90 days without a host present or how to penalize hosts for regulation violations. Before returning to the council, the recommendations will come before the city Planning Commission on Oct. 21.

Currently, all short-term rentals are illegal in Berkeley because of an ordinance passed in 2003 – with the exception of 12 bed-and-breakfasts. Even so, there are hundreds of short-term rentals in Berkeley listed on Airbnb for an average of $119 a night, according to the Airbnb website. The site also provides links to specific ordinances regarding short-term rentals in particular cities.

To legally operate a short-term rental in Berkeley, the commission decided that owners must obtain a business license and list their license number in their rental listing. The hosts must also carry a minimum of $500,000 in liability insurance, which is offered by Airbnb. In line with hotels, hosts must collect a transient occupancy tax on their guests as well.

But this is not the only tax hosts pay. According to David Willis, a Berkeley resident who has hosted on Airbnb for three years, Airbnb requires hosts to file a 1099 form to report self-employment income taxes. Willis said he understands the city needs revenue, but has issue with how the hotel tax is collected by the city.

“I would like to be able to see that our tax money goes directly to affordable housing, as opposed to bleeding through the city,” Willis said.

In addition, commissioners voted to exclude units currently subject to the Rent Stabilization and Good Cause for Eviction Ordinance from changing their long-term rental units into short-term ones. According to Igor Tregub, the commission’s vice chair, anything rented out 15 days or longer is considered long term as 14 days and fewer is considered short term.

The commission decided to defer to a pre-existing ordinance regarding subletting — as opposed to creating new regulations specific to short-term rentals — to determine who is eligible for short-term rentals. It recommends that tenants abide by the rules set in their rental contracts and consult with their property owners before short-term renting.

One council guideline stipulated that hosts should notify neighbors before renting out, but the commission decided that pre-existing ordinances already address nuisance behavior regulations. For instance, a passed proposal would require hosts to fill out standardized forms to provide information about city regulations that would apply to guests, including Berkeley’s noise ordinance, smoking regulations and social host ordinance, among others. Hosts must also supply guests with safety information such as emergency numbers and secondary points of contact.

Another approved recommendation would bar owners or tenants from offering their space as a short-term rental if they live in a building with three or more units.

“In my view… the simplest thing would be to make a rule that you can only rent out portions of your permanent dwelling of where you live,” said Bren Darrow, chair of the Housing Advisory Commission. “That way, people can’t take apartments off the market and rent out the entire property.”

The Housing Advisory Commision will reconvene Nov. 5.

Contact Jamie Nguyen and Brenna Smith at [email protected].

A previous version of this article incorrectly stated that the Housing Advisory Commission decided to uphold pre-existing ordinances regarding subletting in order to determine who would be eligible for short-term rentals. In fact, there is only one pre-existing ordinance regarding subletting. Additionally, because the commission does not have the power to uphold or otherwise alter the ordinance beyond technical updates or corrections, the commission did not decide to uphold the pre-existing ordinance; it decided to defer to it.