Quantcast

Ground Up

The Daily Record's real estate blog

Baltimore festivals set Airbnb records as lawmakers debate regulations

Freshly laundered white fluffy towels in bedroom interior (springfield / Depositphotos.com)

Freshly laundered white fluffy towels in bedroom interior (springfield / Depositphotos.com)

Airbnb’s business in Baltimore continues growing as city legislators consider regulating and taxing the short-term rental service.

Both the Moonrise music festival and the AFRAM Festival, the free annual African-American cultural event, are slated to start Saturday in the city. The influx of visitors for those gatherings is projected to beat Airbnb’s previous single-day booking record with 2,960 guests set to arrive the day the festivals begin.

“Home-sharing continues to provide Baltimore with an easy way to host major events and thousands of visitors year-round,” Will Burns, director of public policy for Airbnb in Maryland, said in a statement. “And Baltimore’s flagship music festivals are the perfect opportunity for our local hosts to make supplemental income, open their homes to visitors, and serve as ambassadors for this great city.”

Airbnb’s previous single-day booking record of 2,320 guests was set on May 11 of this year. That was the day of the 143rd running of the Preakness Stakes. Airbnb expected hosts renting space over Preakness weekend to earn more than $372,000 between Thursday and Saturday. That figure represented a 60 percent increase from the same time period from the weeks before the race.

Between Friday and Sunday Airbnb hosts in the city are expected to earn $290,000 from visitors renting space via the online rental platform, the company said. That represents an 84 percent increase in earnings from the same time the week before. Since 2017, Airbnb hosts in Baltimore have made a combined $506,000 renting space to visitors for the two festivals.

Most of the guests staying with Baltimore’s 670 Airbnb hosts are from Philadelphia, New York and Washington, according to the company. The majority of the city’s hosts, 59 percent, are women, 5 percent are first-time hosts and 10 percent of hosts are at least 60 years old.

Due to the surge in popularity of short-term rentals, such as Airbnb, which the city assumes captures 95 percent of the market share, HomeAway, and VBRO the Baltimore City Council is debating a bill to tax and regulate the industry.

Sagamore Development Co. has been urging the Baltimore City Council to take up its request for a $535 million tax increment financing package to provide public infrastructure for its sprawling Port Covington project before the end of the year. (File photo)

The Bltimore City Council is considering legislation to tax and regulate short-term rentals through firms, such as Airbnb. (File photo)

The bill, sponsored by Councilman Eric Costello and co-sponsored by nine other council members, calls for licensing hosts as well as applying the city’s 9.5 percent hotel tax on transactions made through San-Francisco based Airbnb and its competitors.

Hospitality industry interests in Baltimore have pushed for the city to regulate and tax short-term rental disruptors. Hotel operators argue that not having the hotel tax and lack of licensing give the short-term rentals a competitive advantage.

Several jurisdictions, including Montgomery County, have already approved laws to apply their hotel tax to short-term rentals.

There are 1,263 active short-term rental hosts in Baltimore, according to Baltimore’s Department of Finance, providing 2,105 rental units, with an average daily rate of $120, If the legislation passes it could generate roughly $1 million a year in revenue.

But the licensing requirements are the part of the bill that Airbnb representatives object to. The bill would require a short term rental host to prove the property is their primary residence, restrict rentals to two dwelling units, require an annual license renewal, and charge a licensing fee of $100.

“‘We believe a lighter regulatory touch for home-sharing is best for our community and the city, and look forward to further conversations on this issue,” Crystal Davis, a spokeswoman for Airbnb, said last month after a committee hearing on the bill.

Visit Baltimore has named Al Hutchinson its new president & CEO. (submitted photo)

Al Hutchinson, president & CEO of Visit Baltimore, backs legislation taxing short-term rentals. (submitted photo)

Supporting the legislation are Baltimore Development Corp., the city’s quasi-public economic development agency, and Visit Baltimore, the nonprofit tasked with attracting visitors that is funded with a 40 percent cut of hotel tax revenues. But they also urged the city to consider regulations that wouldn’t be a burden on the emerging short-term rental market.

“Visit Baltimore believes (the legislation) is a step in this direction and encourages continued dialogue among all stakeholder groups –the local host community, the hotel industry, the broader tourism community and city agencies – around the proposed legislation,” Al Hutchinson, president and CEO of Visit Baltimore, wrote in his letter to the council.

To purchase a reprint of this article, contact reprints@thedailyrecord.com.

2 comments

  1. Since the City of Baltimore owns a number of Hotels in the convention center area, I do believe this is a conflict of interest.

    Like the scooters that arrived because of the City’s failed bike program, the city only tends to get involved if it can squeeze out profit for itself.

    They should have a set number of days they can short term rent and not have it included as a business/taxable as such. no more then 7 days in a row and 15/25 days a year.

    Maybe all the City employees that have a car for usage should have to report the number of days being used and tax them for that at standard rental rates or be forced to add them to Income tax as a gift.

  2. Greetings!

    We have a petition started and we want to work with council and PAY the TAX, GET the FACTS.

    That is, let’s start having Airbnb collect the 9.5% tax from Airbnb guests through the platform to avoid any unnecessary overhead for hosts who are already paying income and property taxes. Airbnb will remit to Baltimore immediately. They do this in DC and many other jurisdictions. We’ll use that as the baseline of revenue before any regulations are passed.

    In the meantime, let’s get the facts and study the impact of Airbnb across the city district by district instead of passing the very restrictive bill in place now that will most likely have very dire unintended consequences for the city.

    The petition can be found by searching: Vote NO on Short-Term Housing Bill Regulations and Yes to Tax on GoPetition.

    Thanks

Leave a Reply

Your email address will not be published. Required fields are marked *

*