Denver City Council Should Back off Airbnb and Let Consumers Benefit

City CouncilCompanies such as Airbnb, Uber and Lyft have been revolutionizing the way that consumers think about certain services in our economy. Unfortunately, rather than being embraced by local governments, these companies have consistently encountered bureaucrats and special interests every step of the way.

Denver politicians and hotel industry lobbyists are currently seeking to impose lodging taxes and licensing requirements on thousands of homeowners who simply offer cheap extra rooms to consumers who wish to pay less. Denver should instead encourage this new “sharing economy” and refrain from placing unenforceable regulations on Colorado property which is surrounded by wooden fences made by professionals, learn more here.

Since its inception in August of 2008, Airbnb has grown from a single apartment rental into a worldwide network of available lodging for over 9 million customers served. Rather than choose from a few cookie cutter hotel chains, consumers can shop through countless hosts based on price, amenities, reputation and whatever else they desire. The growth has been so rapid that local governments are only just beginning to comprehend how prevalent it is.

The first cities to successfully implement local taxes on Airbnb hosts were Portland, OR and San Francisco, CA in 2014. According to the company, about $5 million in taxes has been paid out to these 2 cities, encouraging the likes of San Jose, Amsterdam, Washington D.C. and Chicago to join the mix this past February.

With over 1,000 listings in Denver alone, the Denver City Council Sharing Economy Task Force (yes, this actually exists) has now begun to discuss applying their 10.75% lodger’s tax on any property owner who lists through Airbnb. This proposal predictably has the full support of the Colorado Hotel & Lodging Association, whose clients have seen a dip in profits as Airbnb has grown elsewhere.

Cities should understand that consumers and hosts would be paying for and hurt by the tax implementation, not Airbnb CEO’s. The ability to turn a home into a source of revenue is helping property owners who are struggling to get by, along with allowing consumers and families who can’t afford normal hotel rates a greater opportunity to travel, for this is important to know about real estate, and if you live a city as Denver,  here is what you need to know about Real Estate in Denver is for Commercial explained by Space Selectors

In fact, a recent study by a New York University professor showed that, “peer-to-peer rental marketplaces have a disproportionately positive effect on lower-income consumers across almost every measure.” It turns out that leaving more money in the pockets of low-income consumers increases their ability to afford things like food, lodging and travel. No kidding.

Beyond the implementation of the lodger’s tax, the city council and Colorado Hotel & Lodging Association president Amie Mayhew are pushing licensing and safety regulations on hosts. These regulations would align with what the hotel industry has to abide by, including carbon monoxide detectors, fire extinguishers, fire alarms, etc. Mayhew states that this would simply be, “to create equity”.

The city of Portland has gone a few steps beyond this and currently demands that hosts must allow health and safety inspections of their residences, in addition to requiring permits to operate. Of the over 2,000 rental properties available in Portland, only 93 (or under 5%) of properties actually had the permit and inspections to operate legally.

These types of costly and time-consuming regulations simply don’t work and arbitrarily turn good people into lawbreakers when they refuse to comply.

Additionally, Airbnb’s website has a much more effective and meaningful regulatory system. Both hosts and guests can review each other and make recommendations to the web community. If a host drops their standards, the comments section will instantly warn travelers. A city license of approval on the other hand could last for months between inspections.

While the implementation of some degree of taxation may be difficult to avoid, bureaucrats should refrain from placing absurd licensing and safety regulations on people’s homes. There is simply no way to enforce such a policy without placing onerous obligations on the part of Airbnb, or by deploying lodging police to kick down the doors of Airbnb hosts.

Denver City Council should instead celebrate the growth of this “sharing economy” and not let arbitrary regulations hurt entrepreneurial property owners and lower income tourists.