All Philadelphia hosts running the legal gauntlet

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hi everyone.
i came to the board to see if anyone else had posted about this, but found nothing so wanted to update people in other cities on what we are dealing with here in philadelphia.
mid-march all philadelphia hosts received an email from airbnb telling us we would be required to acquire a littany of licenses and permits by april 1st - literally an impossible amount of time given how slow city bureaucracy works. VERY shortly before that deadline, with hosts turning guests away & cancelling reservations from april 1st on, we were notified our deadline had been extended to July 1st.

everyone hosting thru airbnb is being required to get a “commercial activity license,” a business tax ID, then, if they are only renting a room in a single family home that is also their primary residence, they can get a “limited lodging operators license” which for many people also requires a zoning overlay. these are the people that have it easy.

however, many of the old houses in philadelphia are large, from a time when families had huge families, servants (and servant quarters - separate 3rd fl apartments), and many of these large houses have operated as rooming houses for many many many decades - like my house, which was zoned as a rooming house going back to the 30’s, then was zoned as 3 units in the late 90s (as the city pushed to reduce rooming houses and convert them to apartments.) My house is very much my home - it has a beautiful garden, im active in local citizens meetings, i vote in every local election, i know all my neighbors… and all my neighbors know i airbnb a 1 bedroom unit on the back of my house. im careful about who i host - i make it clear i live here, events are not allowed, and ask people to confirm they read my rules about being respectful to neighbors. no neighbor has ever complained or had an issue with my airbnbers, but lots of times ive hosted friends and family of neighbors.

after TEN YEARS OF HOSTING, it looks like i will not be able to continue hosting with the new rules. any buildings zoned muti unit, even if owner occupied, must get HOTEL STATUS. yes, really. and they’ve made it basically impossible for us to get that. ive been going from city office to city office, filing and waiting, paying fees, filing and waiting, step by step. the last thing i filed, i was told i would get rejected, then have to file an appeal, and that would be scheduled months out.
hosts in a philadelphia airbnb hosts facebook group have said they feel like the city designed the laws to shut down airbnb entirely - and the people working in the city office confirmed that. they are rejecting almost everyone, and have even being rescinding permits that were previously issued (seems theyre making the rules more narrow as they go.)

the local narrative that pushed these laws thru was that airbnbs were party houses (see link below.) but the laws are not designed to actually stop that at all.
https://www.inquirer.com/news/airbnb-regulations-philadelphia-party-houses-20220206.html

it just feels sad to see the city come down so hard with such strict laws that home owners like myself, who are good responsible hosts, who use the money to improve our houses, who recommend local businesses to our guests- we will be shut out, and visitors to our city wont have these opportunities to stay in our unique homey historic houses after july 1st.

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Looks like this was pasted 6/21, almost a year ago.

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I’m sorry to read this. Your place sounds like just the sort of place I’d like to stay. I’ve stayed in similar places and have a booking in Baltimore upcoming. Sadly I think more and more urban hosts will face this same challenge. Maybe you’ll get some sort of reprieve.

Thanks for sharing your story.

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i read all airbnb emails, messages and notices sent to me - even if this was posted somewhere, i assure you airbnb hosts were not directly notified by airbnb until mid-march a couple weeks before. maybe airbnb thought they could beat it? and chose not to tell us directly to avoid alarm? hosts in the group im in did not know til mid march - and this is why the city had to extend the deadline to july 1st.

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@HostAirbnbVRBO was being sarcastic and trying to make a point using your post. He won’t be replying for a few days as a consequence.

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MJF, I know Philly bureaucracy is so challenging. I spent an entire day wandering the bowels of the JFK city building to get my first commercial activity and long term rental licenses there.

I agree the STR requirements have been on the books for awhile, probably just not enforced, given the number of real estate listings I’ve seen that say “previously used as an Airbnb investment property for $x,xxx monthly income.”

I assume you’ve looked into this, but would it be possible to file for rezoning from multi family to single family home, or is that equally problematic? This is from the city’s website: “If your proposal meets code requirements, you are granted permits as a matter of right. If your proposal does not meet code requirements, you’ll need a special exception or variance . . .” Decreasing the number of residential units on a property is one of the permitted actions listed.

Or get the long term rental license instead? You could then do either corporate monthly rentals, or maybe thread the regulatory needle by setting a minimum 2 or 3 week stay, but having only one guest per month and calling it their “monthly rate.” This would still create a small risk of tenant’s rights, as they would be paying for the entire month on paper, but as there is no rent control in Philly, my understanding is that a month-to-month lease can be terminated with 15 days notice. Also keeping in mind that charging a less than market rate for a monthly rental will affect your expense deduction ability.

That nuance would not be communicated by listing on Airbnb or VRBO platforms and might bring the city knocking at your door, so you would probably best have another mechanism to find potential guests.

Not ideal, but maybe something to do while you continue to fight your way through the licensing and permitting process.

Not professional advice, for discussion purposes only.

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I have an old Victorian and put up with quite a few requirements but not as strict as those you note. It is a shame that our beautiful old homes will be probably be neglected by those currently in them who depend on Airbnb for the heavy upkeep expense. Restrictions and COVID have been a double gut punch for many of us. That doesn’t even begin to touch the surface of how difficult the insurance market has become for us. Sorry to hear that you will quite likely not be able to host if nothing else changes.

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@mjfmjfmjf I’m sorry for you- that’s sad. It sounds like you have a great rental- one that is easy to manage as you are onsite to oversee, and which disturbs no one.

It’s such a shame when things go this way- blanket rules which make no distinction between a small home-based business and faceless entire home rentals run by property managers, which remove housing from the market for locals and often disturb the neighbors.

I would never depend on Airbnb to notify hosts of local regulation changes, though. With millions of listings all over the world, I don’t see how they could always be expected to be aware of such things. If hosts want to make sure they don’t get caught unaware, probably best to check once a year as to whether anything has changed re local licensing, taxes, etc.

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I’m very sorry this is happening to you. So upsetting when they make new regulations around things and use a machete when they should have used a scalpel to solve the issue. :cry:

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Hi @mjfmjfmjf

I’m sorry you’re facing this difficulty.

But a little confused that the first you heard of your local government STR restrictions was from Airbnb.

Was there nothing in your local media or in your local host discussion groups about the introduction of the legislation. ?

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No, that’s not what the sarcasm is referring to. I was out of line, for which I am sorry, and my post here was appropriately deleted.

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I am so sorry to hear this. Hope Airbnb can do something to help hosts in Philadelphia.

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the first i heard of it was from the airbnb email telling us we had two weeks. this seemed to be the case for everyone in the local airbnb forum as well (a lot of alarm, confusion, upset, disbelief.)

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airbnb should be absolutely be notifying hosts of a city of a city wide change in Airbnb specific rules? they do this for many things - when we had hotel tax %'s added, when the pope was coming to town, when theres risk of natural diaster, etc.
its absurd to think they shouldnt. you wouldnt tell a student at a university they shouldnt expect the university to notify them of major policy changes that will dramatically impact them, that the university itself will be enforcing. this was a case of laws that named / targeted airbnb specifically, that airbnb lobbied against, & were required to get all these license numbers and then enter them into the airbnb system on the airbnb website. its absolutely airbnbs business to tell their hosts with reasonable notice.

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my house is multi unit. it physically is, and it cant be zoned as a single family house unless i… rip out many kitchens, walls, etc. and then end up with a house that is far too big for any single family, and in the process devalue my house tens if not hundreds of thousands of dollars.

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That isn’t a very good analogy. That is one university informing their students of a policy change, not one university informing all students globally of policy changes at universities all over the world.

In any case, I think you misunderstood me. I wasn’t saying Airbnb shouldn’t inform hosts if they are aware of licensing changes and regulations in a host’s area, I meant that I wouldn’t depend on them to do so.

They screw up the opposite way, too. I have gotten about 6 reminders to add my Canadian GST number (equivalent of VAT), but while I am Canadian, my listing is in Mexico and not subject to Canadian tax, I pay VAT in Mexico. When I inquired as to why I was getting them, when that tax isn’t applicable, they told me to just ignore it.

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I absolutely wouldn’t expect a marketing channel for my business ie Airbnb to advise me about legislational changes affecting local STR regulations.

Where I live the local council has been talking about introducing changes for a year or so, so I keep an eye on this and have Google alerts set up to track on a online chatter about this.?

Yes Airbnb may update information to hosts on its website about local area changes it’s aware of - but it’s your business and your responsibility to track legal changes that will impact on your business

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Airbnb is a booking agency. Many act like it is a business partner or an employer, not so. Anyone that deludes themselves to think otherwise is destined to disappointment.

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I agree with you.

I did read – if the reporting is accurate – that Airbnb fought the law in Philadelphia. So Airbnb knew about it. It’s surprising that Airbnb would not have rallied their Airbnb hosts in the area to talk with their Councilmember.

@Helsi’s suggestion about Google Alerts is a good one.

We’ve seen all sorts of legislation restricting short-term rentals. It’s worth our while to keep up on developments in our geographic area. What I suppose we really should do is be proactive. Talk with our local representative BEFORE any legislative attempts are made so that they are up to speed on the issue and your viewpoint.

It seems to me that human nature is such that once a legislator is approached with a specific legislative proposal and agrees to it, even tentatively, that it will be much more difficult to get that legislator to change their mind.

Having said that I haven’t done that (yet). I wonder what an effective meeting might look like, what statistics I might need to gather and be able to gather to show that STRs in my area can be/are a good thing and what effective STR laws might look like depending on the local concerns (e.g., gentrification, parking, lack of housing, etc). It seems to me that this might be an interesting project, though a bit daunting.

By the way, MA has the law that Philadelphia just enacted that you can’t have more than three unrelated individuals in a rental, but it is not generally enforced here. This councilman in Worcester says a husband and wife with two adopted children would violate this ‘4 or more rule’ because adopted children don’t count as ‘related’ and – get this – neither do spouses. [There’s a really good joke somewhere here.]

Bottom Line: It’s our business. We need to be listening to what’s happening in our area (Google Alerts). Our plan cannot be to hope that Airbnb or others protect our business. We might want to think about how to be more proactive, whether there are groups/organizations aligned with our interests talking with local political leaders/legislators.

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I hear ya. The variance to be an SFH on an RM zoned property could be just as much a pain as the variance for a hotel rental license, right? And if you are already doing LTR in the third unit you don’t want that, plus the possible property value dimunition you mention.

I understand it is pro forma for special exception and variance filings to be denied and proceed to hearing, plus collecting non-objections from the neighbors & getting an OK from your community org. It sounds like you have the connections and goodwill built up to succeed.

The variance goes with the property, right? Would increase your future sale value. I am interested in hearing your progress, in case I ever go that route.

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