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City forfeits $1 million in Airbnb taxes

Original post made on Apr 14, 2017

Airbnb and other short-term rental companies have become a fixture of Mountain View.

Read the full story here Web Link posted Friday, April 14, 2017, 12:00 AM

Comments (24)

Posted by SRB
a resident of St. Francis Acres
on Apr 14, 2017 at 8:06 am

SRB is a registered user.

Palo Alto didn't have the same qualms about appearing to condone that unregulated cottage industry.

Airbnb has been collecting TOT (14%) on any Palo Alto listing. Yet to date, Palo Alto doesn't have any regulation in place (see: Web Link ).

There is also plenty of precedents for requiring an unauthorized (or even illicit) industry to pay taxes. To wit, wasn't Al Capone caught for tax evasion?


Posted by Uber Alles
a resident of North Whisman
on Apr 14, 2017 at 9:43 am

"We want to pay our fair share and work with cities to enact clear and fair legislation,"

The main difference between AirB&B and Uber which thinks it's special and doesn't need to follow the law.


Posted by Resident
a resident of Old Mountain View
on Apr 14, 2017 at 11:11 am

Bah! The city forfeited nothing. We residents are part of the city as well, and whatever the city government didn't take for themselves remained in the hands of the residents. I've never used AirBnb as a guest or a host, so this hasn't impacted me, but I'm really dismayed that every conceivable human interaction is something the city sees as a revenue stream.


Posted by Free $?
a resident of Cuernavaca
on Apr 14, 2017 at 3:29 pm

Seems like a no brainer to collect taxes. Let's follow PA's lead and start collecting. We can use the $1M on traffic relief efforts!


Posted by William Hitchens
a resident of Waverly Park
on Apr 14, 2017 at 5:16 pm

"City finance staff members said they would be happy to levy taxes on Airbnb rentals, but taking that step opens up a tangled mess of other city policies that would need to be updated."

Is this the bureaucrats (and politicians) who run MV admitting that they're just marking time until they can collect their very, very fat pensions? If it needs fixing, then fix it and don't make lame excuses. That's what you collect fat paychecks for. Meh!


Posted by Seriously? Wake up!
a resident of North Whisman
on Apr 14, 2017 at 5:49 pm

I guess We've all forgotten about right to lease. Landlords are required to offer multiple lease options. LMAO. You can't have it both ways. Seems like some people and this publication wants one rule for themselves and one for everyone else.

It seems this publication favors big business since all of your articles about housing shortage seem to support lots of new, expensive housing, which in general cannibalizes lower cost existsting housing. Then when people offer up housing that is affordable, you're worried the city might not get their cut? Make it burdensome for private parties to offer housing and you lose more housing. Remember, local businesses created this transient market, not homeowners.

Instead of discouraging, this publication and the city should be encouraging homeowners to open their homes as a way to help with the affordable housing. This is virtually THE ONLY WAY additional affordable using can be vested inMountain Viiew.


Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Apr 15, 2017 at 3:26 pm

The Business Man is a registered user.

This is where I am in total agreement with apartment owners and the City. This business IS illegal. This is something that does need specific language written into the City ordinance to forbid this practice. Also, significant fines or licensing must be imposed so that there will be consequences for violations. There should be no way to avoid noncompliance. If the city issues licenses for the practice, then the listings will have to demonstrate they ARE legal. The reason is that this is costing inventory that should be used for more residential inventory for city residents. As well as it IS theft of wealth that is due the apartment owners.


Posted by Name hidden
a resident of Another Mountain View Neighborhood

on Apr 15, 2017 at 9:29 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Posted by Blame Measure V
a resident of Old Mountain View
on Apr 15, 2017 at 10:26 pm

What apartment owner with a vacant unit will want to rent it conventionally and be subject to Measure V if they can rent by the day to visitors and thus earn a free market rate of return and have control of their property like they once did? Done correctly, nobody is the wiser, both price and community policing in air b-n-b would regulate. It would be a waste of money for the city to enforce the un-enforeceble current ordinance, they should just take the hotel taxes and pay for the new City staff that will be hired to manage the awful Measure V.

A true "business man" would never re-let a vacant unit and would use air b-n-b or do 30 day corp housing leases with corporations housing employees (those are allowed by current rules).

This is another case of Measure V actually reducing affordable rental housing and making a bad situation worse. A free market will resolve itself over the long run, the absence of it leads to distortions, the members of the tenants coalition don't care and just want their rollbacks and artificial price controls at the expense of everyone else. The whole thing is unfortunate.


Posted by It's OK
a resident of Another Mountain View Neighborhood
on Apr 17, 2017 at 1:44 pm

Man, some can't let go of their lost fight and will blame everything on V^^^^^

Back to the issue though, it seems likes it's just a matter of time before the taxes are levied. Doesn't seem like any major issue but something that should be addressed.


Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Apr 17, 2017 at 4:08 pm

The Business Man is a registered user.

Here is a good solution for the affordable housing problem in Mountain View:
Step 1: require all Air BnB to be licensed, and charge a $30. Night fee for each unit for any Air BnB transaction. This can be tracked by having a script track all Air BnB transactions off the Air BnB website. Since it does facilitate the financial transactions. As for Corporate 30 day agreements, same deal, and require all agreements to be registered to the City and have a $500. Per month fee charged to each unit.

These fees will be saved into a fund to be used to systemically use eminent domain to seize all private apartments in the City of Mountain View. The just compensation for such takeover will be the City Assessed property tax value only. This is a scientifically valid determination of value because if it wasn’t the City would be in a world of trouble. Thus the private ownership of apartments in Mountain View would systemically be removed. In place will be city managed apartments that are not for profit. Thus the cost of living in Mountain View will in the long term, be under control.

The CAA and the Apartment owners want the City to take over the apartment business. But their desire will have the unintended consequence of removing any possibility of making speculative profit in the City ever again. They have said so so many times in arguments against Measure V. As the process progresses, the revenues collected in rent from city properties can be used to establish large increases in apartment inventory because it will not be requiring that the projects be for profit. The costs will be much lower than if it were performed by private interests because every part of the project is a profit center, and investors simply pass the cost to the eventual consumer.

This process is completely constitutional because there is no public taking without compensation. But it will kill the private apartment business in Mountain View if the CAA and apartment owners do not take action to increase the city apartment inventories on their own. The taken over properties can simply be redeveloped, cheaply because of the fact that eminent domain does NOT require the compensation to resulting in a profit to the land owners.

So, does the CAA wish to be systemically removed from the City of Mountain View?


Posted by Gee
a resident of Monta Loma
on Apr 17, 2017 at 4:51 pm

[Post removed due to disrespectful comment or offensive language]


Posted by LOL
a resident of Blossom Valley
on Apr 17, 2017 at 5:09 pm

[Post removed due to disrespectful comment or offensive language]


Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Apr 18, 2017 at 3:09 pm

The Business Man is a registered user.

Now that Measure V has passed, it is time for the next step.

We, the Citizens of Mountain View, should pass another City Charter Amendment to establish Air BnB and Corporate Housing Fees.

First all Corporate Contracts and Air BnB units must be registered and licensed.

Failure to do so would be penalized by a $1000./unit/night penalty for Air BnB and $10,000/unit Corporate Housing unit/month.

The fees collected would be. $30.00/unit/night for Air BnB and $500/unit/month for corporate residences..

This will be collected into a segregated fund used to compensate for Eminent Domain actions and used for collateral for public housing projects only. It will not be accessible for use in the general fund.

Why, to eliminate a legal loophole that exists at this time. The current measure did not address the


Posted by The Truth
a resident of North Whisman
on Apr 18, 2017 at 4:00 pm

The Truth is a registered user.

Corporate fully furnished apartment rentals fall under the same rules as conventional apartments provided they are leased >=30 days, if they were occupied prior to Feb '95, they are subject to Measure V, of course if the tenant wanted to stay at the rate of $6K per month, no landlord would have a problem with that.

[Portion removed due to disrespectful comment or offensive language]



Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Apr 18, 2017 at 4:57 pm

The Business Man is a registered user.

I am not trying to make Air BnB or Corporate Housing rent controlled. They can be charged without restraint. All I am trying to do is make sure that it is licensed and legal. From what I know at this time, they are not currently legal,the city never established a legal market.

BUT WHAT THE CITY OF MOUNTAIN VIEW NEEDS IS A LONG TERM PLAN FOR INCREASING APARTMENT INVENTORY.

That is the purpose of this initiative I propose. Measure V is a short term and band aid solution for the short term. WE NEED AT LEAST A 20% INCREASE IN APARTMENTS IN THE CITY OF MOUNTAIN VIEW IN 5 YEARS.


The only way to get it done is to create a template of buildings, thus you can get them built faster. They can be decorated individually, but their parking, foundation, amenities, and floor layouts should be standardized so that they can be built without delay on any free land that comes available.

That kind of increase will cause a significant reduction in rent because there will be far more supply, which in economics drives down costs.

So, the truth, if you feel this is unfair, please describe how?


Posted by Dave77
a resident of Another Mountain View Neighborhood
on Apr 29, 2017 at 9:15 pm

Dave77 is a registered user.

I live in a 20 unit apartment building in Mountain View and I recently found out that the landlord has been renting out 3 units thru AirBnB for the last several months. In fact, he is waiting for any long-term tenants to move out, so he can convert more units into AirBnB rentals. How can this be legal?


Posted by The Truth
a resident of North Whisman
on Apr 30, 2017 at 8:07 am

The Truth is a registered user.

AirBNB resides in a practical term gray area similar to Lyft and Uber when they started up. Although explicitly in conflict with the city ordinance, AirBNB in previous situations like Lyft and Uber were ultimately allowed to operate formally being regulated and taxed.

You reap what you sow applies here to the supporters of Measure V. Of course property owners will seek market rates of return when they are able to, they are especially motivated to search for these opportunities when they are being artificially restricted, Measure V has now super charged this behavior, highlighting the farce that Measure V is, it only conferred rights to a limited group of existing tenants and basically gave the shaft to everyone else. Many of the existing tenants (highly paid tech workers) did not need the help, further highlighting the lack of sense in the logically unsound redistribution of rents.

To the property owners hosed by Measure V who are worried about a potential AirBNB crack down, remember, you can always rent short term for more than 30 days (think 30 days plus one day free) and you are not subject to transient tax and are fully compliant with the ordinance. If you have a vacancy, why put it back on the market conventionally when you can get a sustained market rate of return directly (without petitioning the rental housing committee) in real time without hassle? Such a move is the essence of a free market economy and the exercising of one's rights as a property owner, go ahead and send a message by standing up for yourselves.

You will have to furnish the unit and manage more frequent turns, but it is worth it, you already have free time on your hands from the lack of turnover now that tenants have below market rents and are less likely to move out. One unit rented in this manner will offset the loss of market rent from 1.5 to 2.0 of your rent controlled units.

Persons visiting from out of town on an extended basis have the right to seek quality lodging with more amenities in a local neighborhood that costs less than a hotel, I don't see that ever changing. Such properly executed arrangements do not affect the quality of life for existing tenants.

Let the free market reign once again.


Posted by Dave77
a resident of Another Mountain View Neighborhood
on Apr 30, 2017 at 11:28 am

Dave77 is a registered user.

@The Truth, does that mean there is an existing Mountain View ordinance saying that landlords have to rent their apartments for a minimum of 31 days?


Posted by The Truth
a resident of North Whisman
on Apr 30, 2017 at 4:31 pm

The Truth is a registered user.

In order to not be subject to lodging/hotel tax, the rental period must exceed 30 days, so a landlord doing Airbnb for 30 days or less per stay on a property not zoned for hotel use is technically breaking the law, enforcement of this is another matter as the City has not done anything about it. To put another way, more than 30 day rental is not hotel use and is zoned into residential, 30 or under needs to be zoned for hotel, so paying the tax is not the issue, it is zoning compliance. If the city accepted the taxes that were remitted by residential zoned apartments, the city would be giving implied consent which they don't want to do.

I don't blame landlords bending the rules as a result of measure V, the cost of maintaining an older building per square foot is much higher than a modern building, rent control has done significant damage to their ability to operate in a solvent and safe manner, those are facts that cannot be denied. To be fully compliant, all the landlord needs to do if property is zoned residential is rent for minimum of 31 days, no hotel tax and no noncompliance with ordinance.

By fully furnishing with utilities, the rental rate per 30 days would be at least 2x vs. renting it conventionally and that is still cheaper than a hotel with better amenities, this is a no brainer whose growth has been encouraged by Measure V.


Posted by The Business Man
a resident of Another Mountain View Neighborhood
on May 1, 2017 at 10:18 pm

The Business Man is a registered user.

osted by Dave77
a resident of Another Mountain View Neighborhood
on Apr 29, 2017 at 9:15 pm
Dave77 is a registered user.

I live in a 20 unit apartment building in Mountain View and I recently found out that the landlord has been renting out 3 units thru AirBnB for the last several months. In fact, he is waiting for any long-term tenants to move out, so he can convert more units into AirBnB rentals. How can this be legal?

I just read a story that states that Air BnB only allows 1 unit per 1 host. Thus you should report it to Air BnB and Air BnB will delist him.

The news article is right here (Web Link

It states:

"Home-sharing company Airbnb says it has evicted 923 listings in San Francisco for violating its “One Host, One Home” policy.

In a statement this week, Airbnb disclosed the figures of listings it had booted because they “appeared to be shared by hosts with multiple entire unit listings that could impact long-term housing availability.” Many of the listings it has removed (and the hosts it has evicted from the site) shared an address with other properties available on Airbnb.

"Many Airbnb hosts with multiple listings are listing them in the same building. Take, for example, the case of Bartlett’s Bunkhouse, an Airbnber with a record-setting 50 San Francisco listings," Curbed reports."But turns out this case is actually the Bunkhouse on O’Farrell Street, a 133-room registered hotel."

Still, those 923 are just a fraction of the 10,000 listings the company claims to have in the city, a number that has grown substantially from the 8,600 listings reported in 2016. Of those 10,000 listings, only 2,000 of them have actually registered with the Office of Short Term Rentals.

Airbnb has continued to tussle with laws passed by the city to oversee the home-sharing company and its hosts, most notably in a federal lawsuit currently being adjudicated. But the company made a huge overture to the city in December, saying it would now cooperate with a suite of regulations it had previously considered onerous. The most controversial rules involve providing host names, addresses and guest stays."

Air BnB does not want to become a reduction in apartment resources. And in fact is openly opposed to what the Truth has been advocating. I am surprised that the Truth would encourage landlords in Mountain View to act in such a way that would cause them serious legal trouble. If a landlord can be found in violation of the Air BnB terms, the tenants can sue him for damages because their rent will be increased due to illegal reductions of available apartments.



Posted by The Truth
a resident of North Whisman
on May 2, 2017 at 7:58 am

The Truth is a registered user.

Facts in Mountain View:

Occupancies longer than 30 days are exempt from hotel tax.

If your property is zoned residential, you cannot legally engage in short term rentals (30 days or less) whether it is AirBNB or Craigslist or whatever.

Landlords of residential multi-family properties are free to rent on terms with a minimum of 31 days.

Conclusion:

Furnishing a vacant apartment and renting for 31+ days at a rate of at least 2X market is the way to go. It is the only legal way to increase rental income at a market rate if you are subject to Measure V. You still need to comply with V and right to lease ordinance, but if you are getting 2X+ market vs. a conventional rental, they are most certainly welcome to stay as long as they want.

The effect of Measure V was always going to be increasing the existing problem of housing shortage as units will not come back on the market as soon as they had in the past, landlords will exit the business, sell for re-development, or get creative with the few units that do get returned, thus further decreasing lower cost rental housing supply. Once again confirming that measure V was a one-time bonus program for the lynch mob, the complainers will reap what they have sown.


Posted by mvresident2003
a resident of Monta Loma
on May 2, 2017 at 11:26 am

mvresident2003 is a registered user.

ROnn Owens on 810 KGO is having very interesting discussion with an attorney on rent control right now


Posted by mvresident2003
a resident of Monta Loma
on May 2, 2017 at 11:32 am

mvresident2003 is a registered user.

And by the way, the attorney is basically presenting and supporting exactly what Truth has presented. Bottom line, rent control is not a solution, it is a SYMPTOM of housing shortage and ultimately has negative effects for the whole community.


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