This innovative company tapped into the hearts of millennials with its user-friendly platform and enticing marketing. Why stay in a hotel when you can rent an entire house for the same price? Gone are the days of picking up the phone to make a reservation. Now, it’s as simple as opening the app, skimming through a couple of professional photos, and hitting the “pay now” button.
You have likely found yourself wondering whether or not Airbnb negatively affects our unique Truckee/Tahoe community. You are not alone in your curiosity. Below I’ll address some of the most common concerns I’ve heard and let you be the judge.
1) Does Airbnb allow owners to bypass paying our local Transient Occupancy Tax (TOT)?
Transient Occupancy Tax, also known as bed tax, is a lodging fee paid by short-term renters/lodgers, collected by property owners, and remitted to the appropriate entity — such as Placer County or the Town of Truckee.
Many local property management companies collect and pay TOT on the owner’s behalf, but if an owner is renting the property through their own channel, who ensures they’re paying the tax? Well, according to an employee I spoke with on the phone, Airbnb does not enforce tax regulations on their hosts. While they do encourage owners to take responsibility, Airbnb has no way to regulate what the property owners do (or don’t do) with the money being earned on rentals (See Host Compliance).
Airbnb’s website does have a section labeled “Responsible hosting in the United States,” where you can learn about the associated responsibilities attached to a rental property, including how to allocate those important tax dollars. In fact, Airbnb has created an entire section regarding Truckee in particular and its specific TOT regulations. Outside of Placer County and Truckee, Airbnb has contracts in place with both unincorporated Nevada and Washoe counties in an effort to create a more streamlined system and to ensure taxes are being paid. Airbnb collects TOT funds on the owner’s behalf and remits payment to the county directly. I see this as a win-win — out of sight, out of mind for the owners, and as a county, we reap the benefits from having additional funds placed aside for improvements.
2) Are Airbnb properties hurting our already challenging housing market?
The answer to this question is inherently subjective, but let’s dive in.
While the Truckee/Tahoe market has always been saturated with rental properties, Airbnb provides an option for owners to skip the property management requirements (and fees) to rent on their own. With its theme of ease for all parties utilizing the app, why would owners pay a property management company when they can rent it on their own?
Through this model, the 1,000 square foot 2 bedroom/2 bathroom property that could (and in the past, more likely would) have been a full time rental can now be rented every weekend by the owner directly. Landlords no longer need to adhere to a rental program’s fees, property maintenance, or design requirements. Instead, the small(er) home is now perfect for a skier’s weekend getaway.
Now you’re probably wondering what the difference between Airbnb and our established vacation rental companies is, right? My thought is that although some well-established local rental companies have many homes in their rental program, would a lakefront property really have been a full time rental? Seems doubtful. The difference is the caliber of the properties in each catalog.
Lacking a solidified set of guidelines for each property owner to abide by, Airbnb essentially allows anyone to rent their property through the platform. However, you can utilize the page titled “hosting standards” as a guideline to receiving 5 star reviews, which, in turn, results in more bookings.
3) Does Airbnb’s business model offer an opportunity for long-term or full-time rentals?
Through an unfortunate turn of events, residents in the Truckee/Tahoe area have had to get creative as of late. Due to the severe lack of housing in our area, locals have turned to Airbnb in search of long-term rentals and according to our local social media lifeline (Truckee/Tahoe people), some have seen success. Just last week, I read a testimonial to the unofficial subletting potential of Airbnb. A local woman was being kicked out of her home with nowhere to go and procured a unique solution to her problem. The woman was able to temporarily rent an Airbnb for two months, allowing her ample time to secure a long-term rental, without having to live in her car while doing so.
While the Airbnb employee I spoke with did mention they are in the midst of conducting a study regarding the potential rollout of a program that will focus on subletting, the creators did not intend for the property to be used as a source for full time renters.
Will the progression of Airbnb, and other DIY vacation rental programs, end up hurting our area, or helping? You be the judge.