Denver is smart to consider building a framework to legalize and tax short-term rentals, because, let’s face it, hundreds of those rentals already exist.
If hotels, bed-and-breakfasts and other accommodations must pay a lodging tax, so should people who rent out their homes for short stays.
But city officials should step carefully. Making the licensing process too wieldy or expensive or imposing too many regulations won’t work. People will just continue to ignore the rules and rent out their primary residences through online sites like Airbnb and VRBO.
Under Denver’s zoning laws, renting your room or house for fewer than 30 days is illegal. But that hasn’t stopped many people from doing just that.
Cities around the world are waking up to the short-term rental phenomenon, and tax collectors are trying to find a way to get their share.
In just a few months of collecting taxes for Airbnb rentals in Portland, Ore., and San Francisco, the two cities generated about $5 million, according to The Washington Post.
Denver, thankfully, isn’t thinking of using Portland’s model, where hosts not only must apply for permits but also allow health and safety inspections of their residences. An analysis found that of the more than 2,000 online rentals in Portland, only 93 — or 4.7 percent — had a permit to operate legally, according to the Willamette Week.
We agree with Amie Mayhew, president of the Colorado Hotel and Lodging Association, who says Denver’s system should be “simplistic and streamlined.”
The city’s licensing process should be inexpensive and easy to navigate. And it should be simple for the businesses to remit the 10.75 percent lodger’s tax as well as other sales taxes.
Zoning would have to be changed to allow short-term rentals. City officials say only primary residences should be rented out — defining that as the address on a person’s driver’s license. This will prevent people from buying homes specifically for short-term rental purposes.
Unlike Portland, Denver shouldn’t do exhaustive inspections. That would bog down licensing and be a drag on city coffers. One idea is to have businesses check off boxes indicating they have the proper protections in place.
Some worry short-term rentals could invite more noise and unruliness to their neighborhoods. However, the city has laws on the books to deal with those problems already, which are hardly confined to visitors.
Besides, short-term rentals are already here. Trying to run them out would be extremely short-sighted.
To send a letter to the editor about this article, submit online or check out our guidelines for how to submit by e-mail or mail.
