New Philly Airbnb regulations take effect January 1

Starting Sunday, Philadelphia will have a new regulatory regime for Airbnb and other short-term rental properties.

Since 2015, the city has required many owners of short-term rentals to obtain zoning permits for businesses operating from their own homes. Investment properties where a host does not live have always been illegal without a hotel license, although countless people have broken this law without knowing it.

In both cases, the rules were rarely enforced.

Then in 2021, as controversy swirled around bad actors in the sector, the city council passed a bill to strengthen oversight. Now, many people who have built businesses around short-term rentals say the change, coupled with a slow schedule at the Zoning Board of Adjustments (ZBA), will ruin their livelihoods.

“It has a financial impact on me because it represents 100% of my income,” said Angela Romero, who owns a triplex in East Kensington where she lives in one unit and rents out the other two.

“I don’t know how I’m going to be able to live, and it gives us very little time to figure out how to pivot,” Romero said.

Previously, landlords who lived in the same building as their rental space needed to get a zoning permit only if they rented the space more than 90 days a year. Regulations were not strictly enforced, including for landlords who illegally operated short-term rental units where they did not live.

The new law requires a “limited accommodation operator” license for short-term rental hosts who live in the unit. The paperwork is inexpensive, but that means hosts must comply with a variety of other requirements, such as obtaining lead paint certifications and ensuring their properties are up to code.

Landlords who rent properties where they do not live must also obtain a hotel license. In either case, hosts will need to provide a license number confirming that these permits have been secured with online brokers like Airbnb and VRBO. Companies will be liable for any violations. The city expects this to mean tech platforms won’t allow those without a license to list their properties.

The bill was introduced by Council Member Mark Squilla in February 2021 and signed into law by Mayor Jim Kenney in June of that year. It was supposed to go into effect in April 2022, but city policymakers agreed to delay its implementation until the summer and then again until 2023.

“Eventually this has to come into effect,” Squilla said. “We spent this [over a year ago] and gave them until July. Then we gave them another six months. If we start again, in six months we will say that there are still people who did not know. It’s just going to go on and on and on and on.

The short-term rental industry pushed the city to push back on implementation last year, arguing that some hosts weren’t notified and that delays at the ZBA would prevent many hosts from legalizing before the deadline. deadline.

A trip to the ZBA is often necessary because, under zoning code, short-term rentals in units where owners do not live can only operate in areas of the city where hotels are permitted, which are located usually in denser commercial areas like downtown or University City. In other areas, they must request a zoning exception to obtain their newly required licenses.

Wait times at the ZBA have skyrocketed during the pandemic, with appeals taking five to six months. If a hearing continues, as it often does, it can add months to the process. So far, only 247 people have received a “limited accommodation operator license” and 164 have received a hotel license, out of Airbnb hosts numbering in the thousands.

“What comes to mind right now is whether we’re on the verge of banning 70% or more of short-term rentals,” said Theron Lewis, founder of lobby group Philadelphia STR Association. . “People try to ask for a waiver, but [the ZBA is] couldn’t see anyone until February or later. If something doesn’t change, these people will lose their business.

According to Lewis, at least 2,000 of its members are struggling to comply with the new law. He said STR association members are 70% women-owned, 60% non-white-owned and 40% retired.

“It’s really the most vulnerable people who have been affected by this,” Lewis said.

But Squilla said options are available for those unable to meet the new requirements in time. They could become traditional landlords, renting out their properties to those looking for accommodation. They can rent for 30 days or more at a time, although the demand for such a period is admittedly lower.

Squilla said these changes need to be put in place. For too long the market has been functionally unregulated, which has allowed bad actors to thrive. While there may be a bit of pain now, he said, getting everyone fired and up to code will ensure there will be enough safe and adequate housing for the national half-century of 2026 and the World Cup.

“We’re not anti-rentals; we want more rentals,” Squilla said. “We want everyone to be compliant because we have these big events coming up. If there are any issues, we can fix them before they happen. We can’t keep pushing the ball down the road.