Union City City Attorney Ben Reyes said Airbnb is willing to start collecting a tax on any properties rented within the city’s boundaries through its platform and turn that money over to the city every quarter. At its May 9 meeting, the city council unanimously authorized Reyes and the city manager to execute the deal .
The city’s 12.45 percent hotel room tax rate would apply to users of Airbnb services whenever they book a room, home or apartment.
How much money Airbnb taxes generates for the city each year will depend on the volume of bookings, but staff estimates it could range from $69,000 to $172,000. The hotel tax goes into the city’s general fund, which can be used for any operating expenses.
On Monday, there were 81 rental listings in Union City on Airbnb’s platform, according to AirDNA, a website that tracks such data.
Airbnb has struck similar agreements with roughly 275 jurisdictions around the world, including five cities and unincorporated areas in the Bay Area, according to the company’s latest figures. That in turn has generated millions of dollars in revenue for larger cities.
However, the American Hotel and Lodging Association funded a March report that claimed the agreements with Airbnb are too secretive and allow the company to dictate what data it shares with governments about the taxes it collects.
Because Airbnb does not own actual hotels, it claims to be a technology company exempt from hotel taxes, but it has paid them voluntarily beginning a few years ago in places where these agreements are made.
Reyes noted in an interview that Airbnb will only provide the city with aggregated, anonymous data about rentals in Union City, but the company would be subject to an outside audit if needed.
City Councilwoman Emily Duncan suggested at the May 9 meeting the proposed agreement could be a first step toward further regulation of short-term rentals in the city.
“One suggestion has been that anyone who rents out their home out on the Airbnb platform should register for and take out a business license in the city,” Reyes said.
A business license would subject owners to code enforcement checks if complaints are lodged against the property and allow the city to collect fees from them. Because Airbnb won’t share detailed data about its hosts or renters, however, it’s unclear how the city would force people to register and keep track of them. A similar issue led to a major lawsuit between San Francisco and Airbnb, which recently settled.
“There’s really no way of us confirming whether or not people who are engaged in doing temporary tenancy of their homes are ethical, scrupulous people,” Reyes said.
He added that any additional regulation, while it could drive revenue for the city, would be mainly focused on protecting vulnerable people from illegal, unsafe living conditions.
Reyes said at the meeting that the agreement with Airbnb is a “productive way” to follow the council’s directive to find more ways to generate general fund income for the city.
Reyes said he expects the deal to be finalized within 30 days.
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