New short-term rental law takes effect in Philadelphia

(Getty; Illustration by The Real Deal)

The new year also brings new laws that come into effect in various parts of the country.

A new Philadelphia law, which goes into effect today, significant impact on Airbnb and similar online brokers by requiring short-term hosts who live in their rental units to obtain “a ‘limited accommodation operator’ license,” the Philadelphia Inquirer reported.

While inexpensive, licensing also means hosts must meet other requirements to ensure their units are up to code. Landlords who do not live in the accommodations they rent must obtain a hotel license.

Owners must then provide their license numbers to online brokers such as Airbnb. Online companies will be responsible for violations, which means they are responsible for enforcing licensing provisions that allow owners to list their properties.

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 law was passed in 2021 to provide more control after a series of issues arose over short-term rentals, the outlet reported. Since 2015, the city has required owners of short-term rentals to obtain zoning permits for businesses that were short of homes. And it has always been illegal for landlords who live off-site to rent out their properties without a hotel license. But those rules weren’t enforced often, if at all, according to the Inquirer.

The delay in the entry into force of the current law was intended to give owners time to adapt to the new law. To date, less than 250 people have obtained a limited accommodation operator license and about 164 people have received a hotel license, the Inquirer said. That’s out of thousands of hosts in the city listed on Airbnb alone, the outlet said.

Unsurprisingly, not everyone is happy with the layout.

“It really impacts me financially because it’s 100% of my income,” owner Angela Romero told the outlet. “I don’t know how I’m going to be able to live, and that leaves us very little time to figure out how to pivot.”

“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 the Philadelphia STR Association. “People try to ask for a waiver, but [the Zoning Board of Adjustments is] couldn’t see anyone until February or later. If something doesn’t change, these people will lose their business.

Philadelphia isn’t the only city to tighten regulations on short-term rentals starting in 2023.

In New York, a new short-term rental registration law similar to Philadelphia’s could remove up to 10,000 Airbnb listings from the market, according to NRP.

Instead of requiring licenses, the law — which could go into effect this month — requires hosts to register their short-term rentals in the city’s database. Hosts who don’t comply could face fines ranging from $1,000 to $5,000, according to NPR.

—Ted Glanzer

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