Trending: These are the cities where Redfin and Zillow are directly buying and selling the most homes
Tim Burgess.
Tim Burgess.

Over the past decade, the tech boom has both elevated and strained hubs like Seattle and San Francisco. In many ways, Airbnb — the multi-billion dollar startup that allows property owners to rent out rooms or entire units on a short-term basis — is at the intersection of the evolving gig economy, housing affordability issues, and demands on regulators to keep up.

Now Seattle City Councilmember Tim Burgess and Mayor Ed Murray are proposing new regulations to address concerns about controversial short-term rentals that companies like Airbnb facilitate.

Under the new rules, short-term rentals (non-hotel bookings of 30 or fewer nights) would be restricted to owners using the property as a primary residence. If an owner is not using the property, he or she would not be allowed to rent the home for more than 90 total nights per year.

[Follow up: Airbnb and VRBO raise concerns with Seattle’s proposed short-term rental regulations]

All property owners — including those using the unit as their primary residence — would need to provide liability insurance, a local contact for guests, safety information posted in the home, and a declaration of compliance with safety codes.

The regulations are designed to discourage landlords from operating hotel-like businesses where they would otherwise provide long-term rentals for residents. They would apply to Airbnb and other short-term rental services like VRBO and HomeAway.

Airbnb critics say the service strains already-competitive rental markets by removing inventory. Supporters, on the other hand, claim that Airbnb helps lower-income residents bring in extra cash, allowing them to remain in their homes.

Burgess wrote about the importance of regulating the short-term rental market in a blog post this past January:

Left unchecked, there is concern that online rental platforms, like Airbnb and VRBO, just might provide enough financial incentives to cause homeowners to switch long-term rentals to short-term vacation rentals. The number of short-term rentals available through these platforms has been rapidly increasing and there are now spin-off businesses that make it easier for individuals to manage short-term rentals. At a time when we face a shortage of affordable rental housing, this issue deserves a closer look.

Airbnb locations in Seattle.
Airbnb locations in Seattle.

Around the same time, Airbnb released a 29-page report touting the positive impact the service has had in Seattle. The company claimed that Airbnb generated $178 million in “total economic activity” between August 2014 and July 2015. The report also said the typical Airbnb host in Seattle earns $8,000 per year, renting their space for an average of 79 nights per year.

If those numbers represent the majority of Airbnb owners in Seattle, they would not be affected by the regulations Burgess is proposing, as they fall within the 90-day maximum. Still, Burgess believes the new rules would have a significant impact on Seattle’s rental market.

“Imagine if we put 300 homes back on the long-term rental housing market,” he told The Seattle Times. “That would be worth a lot. To build 300 new units would cost more than $70 million.”

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