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Airbnb grows in Maryland as regulation lags

Operating in a regulatory gray area, Airbnb grew its business in Maryland last year despite relatively few bookings in one of the state’s major vacation destinations.

About 151,000 stays in Maryland were booked through the online room rental service in 2016, bringing more than $25 million to the state’s renters.

Airbnb started in 2008 to create an online marketplace for consumers to rent out extra space in their homes, or the home itself. Competitors include VRBO, HomeAway and FlipKey.

Ocean City

A sign welcomes visitors to Ocean City Maryland. (The Daily Record/Maximilian Franz)

Short-term home rentals, typically those of less than 30 days, are lightly regulated by local municipalities. In Maryland, only a few cities, including Annapolis, Bowie, Easton and Ocean City regulate through licensing.

While Annapolis and Bowie appeared on the Airbnb’s list of the top 20 rental cities in the state, Ocean City was absent.

Rentals remain an issue in Maryland’s beachfront town, which becomes the state’s second-largest city during the summer. Even without the services of Airbnb and its competitors, Ocean City has seen a divide between renters and residents wary of overcrowding and rowdy vacationers.

In the city, property owners must have a rental license to lease out to guests, a city spokesperson said. The license costs $141.

Residents and government officials worry that renting rooms in Ocean City online through Airbnb could cost the city tax revenue.

Tax collection has been a major talking point in discussions over regulating the industry.

In Maryland, applicable taxes include the state’s 6 percent sales and use tax and an additional hotel rental tax. That tax can range between 3 and 9.5 percent, depending on the county.

Airbnb generally does not collect and remit taxes for a municipality until it has reached an agreement with that government to do so.

Last year, Montgomery County reached an agreement to allow Airbnb to collect and remit taxes on behalf of its users, something the company said it has done with more than 220 cities and municipalities around the world.

Airbnb began collecting and remitting taxes in July.

While the agreement effectively allowed Airbnb to operate in the county, some legal gray areas remained.

According to the Montgomery County Planning Commission, short-term rentals are legal if they are longer than one month or designated by the county as a bed and breakfast. But bed and breakfasts are limited to certain areas based on zoning regulations.

The commission is undergoing a public hearing process to create new regulations for online short term rentals.

Statewide, a bill filled by Sen. Joan Conway, D-Baltimore City, would regulate short-term rentals, including requiring the payment of taxes. The legislation would also require that renters be licensed.

The data Airbnb released Monday showed growth in the company’s consumer base in the state.

Stays booked through Airbnb increased 119 percent, the company said while the number of homes rented through the service increased 75 percent. Airbnb estimates that hosts generated $5,300 on average last year.

Baltimore City received the most Airbnb guests last year, with 46,200 guests booking rooms for $7 million.

Outside of Baltimore City, Montgomery County received the most visitors through Airbnb last year. Silver Spring, Bethesda, Takoma Park, Rockville and Gaithersburg accounted for 21,300 visits and more than $5 million.

Property owners in neighboring states have also cashed in on Airbnb’s services.

In Virginia, 6,800 hosts welcomed 280,000 guests, bringing in $41.1 million. In Washington, D.C., 287,000 guests brought hosts $59 million. No data was available for Delaware, Pennsylvania or West Virginia.

The following data is an overview of 2016 Airbnb guest arrivals and total host income, broken down by the top 20 home-sharing cities in Maryland:

 

City

Guest Arrivals

Host Income

Baltimore

46,200

$7 Million

Annapolis

15,000

$2.4 Million

Silver Spring

11,000

$2.4 Million

Hyattsville

4,800

$640,000

Fort Washington

3,900

$694,000

Bethesda

3,600

$1.1 Million

Takoma Park

2,700

$648,000

Rockville

2,400

$647,000

Frostburg

2,400

$264,000

Frederick

2,100

$262,000

Cambridge

1,800

$387,000

Gaithersburg

1,600

$327,000

Mount Rainier

1,600

$193,000

Laurel

1,500

$177,000

Ocean Pines

1,500

$184,000

Riverdale Park

1,400

$122,000

Bowie

1,300

$230,000

Edgewater

1,300

$169,000

Columbia

1,300

$259,000

Ellicott City

1,200

$154,000

Source: Airbnb


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