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State eyes regulation of short-term rentals

Greene and Columbia county officials are keeping an eye on a state Assembly bill they hope will allow them to recover more sales tax revenue from short-term rentals.
October 16, 2019 05:21 pm

CATSKILL — Greene County lawmakers Tuesday discussed a state bill that would make the business of Airbnb more akin to other forms of lodging.

The bill, introduced in the state Assembly by Assemblywoman Patricia Fahy, D-109, would require short-term rental apps such as Airbnb collect sales tax, the hosts to register their rentals with the Department of State and be subject to the same types of inspections and safety standards as other forms of lodging.

The bill is in the Housing committees of both the Assembly and Senate but does not have a senate sponsor.

Because there is no sales tax collection mechanism in place, $112.7 million in taxes goes uncollected annually for Airbnb rooms, according to the state Hospitality & Tourism Association.

The Greene County Economic Development and Tourism Committee passed a resolution in support of the bill. Legislators Michael Bulich, R-Catskill, and Ed Bloomer, R-Athens, opposed the resolution. Legislator Larry Gardner, D-Hunter, was absent.

Bloomer found the inspections to be excessive.

“If it was just the sales tax collection, I would vote for it in a heartbeat,” he said. “If you’re staying in a single family home, isn’t an evacuation plan redundant? There’s the door.”

Legislator Patricia Handel, R-Durham, who owns Blackthorne Resort, supports the bill.

“I’m all for this one,” she said. “I know I have the health department breathing down my neck. Why shouldn’t they?”

Bloomer thought because it was people’s homes, it was different, he said.

“They’re bringing people there,” Handel said.

“I’m not opening my home up for inspection,” Bloomer said.

“Don’t run a business there,” Harry Lennon, D-Cairo said.

The rise of short-term rentals in the area is impacting local resorts, as well as the county’s revenue from tourism-related sales tax, Greene County Deputy Administrator Warren Hart said.

“In Greene County there were 45,300 guest arrivals [through Airbnb] in summer 2019,” Hart said.

Greene ranked the third largest for guest arrivals in the Capital Region, Hart said.

Greene County and Columbia County have more than 1,000 Airbnb units each, according to the state Hospitality & Tourism Association.

“Those overnight stays generated $7.6 million to the hosts,” Hart said. “The county was unable to capture $300,000 in revenue [from sales tax].”

The state Hospitality & Tourism Association estimates that Airbnb hosts in Greene County make $25 million annually — a loss of $1 million in sales tax, Hart said.

About 30% of the homes in Greene County are second homes, making Airbnb a lucrative business.

A 2018 economics report through I Love New York estimated that Airbnb represents 50% of the county’s lodging income. The county’s current lodging income, which does not include Airbnb, is $60 million.

“This is an important statewide issue,” Hart said. “It is a necessary form of overnight lodging. The bill wouldn’t make it illegal, just level the playing field.”

There is already similar legislation in place in New York City, Hart said.

In Hudson, questions remain whether the state bill will mean double taxation for short-term renters there. The city already collects a 4% tax on lodging and requires short-term rental operators to register for a yearly fee. About 150 short-term rentals in Hudson were registered through the city as part of the Lodging Tax as of July.

As chair of the Legal Committee, 4th Ward Alderman John Rosenthal has taken up the torch in discussions on how best to regulate short-term rentals, which has been ongoing for several months.

“I think the bill reinforces and supports a short-term rental moratorium in the city,” Rosenthal said. “Whether or not it causes a double tax or more work for short-term rental operators in the city we have to investigate.”

A nine-month moratorium for short-term rentals is on the alderman’s desk and is awaiting a recommendation from the county before it is likely voted on next month. The moratorium will not affect hotels and bed and breakfasts and will have a hardship clause that will allow short-term renters to plead their case to the Common Council, Rosenthal said. The moratorium will give the Legal Committee of the Common Council room to draft a detailed law on regulating the short-term rentals.

“It [short-term rentals] is a phenomenon happening across the country and reflecting trends in the wider economy,” Rosenthal said. “Internet platforms present good opportunities in an area to create some sort of income off of their property. The problem is when they are operated as quasi-hotels and without the same safety regulations.”

Assemblywoman Didi Barrett’s, D-106, office did not immediately return a request for comment Wednesday on whether she would support the legislation.