Bidar-Sielaff (center): "I think that we've gotten to a reasonable place."
The city's Plan Commission has recommended legalizing and regulating tourist rooming houses in Madison.
The recommendation to add tourist rooming houses -- like those advertised on Airbnb.com and other room-sharing websites -- to the Madison zoning code passed narrowly by a vote of 4-3. If approved by the Common Council, the amendment would limit hosts to renting 30 days per year, and would require that they be licensed by Public Health Madison & Dane County. Hosts would also need to register with the city treasurer's office and pay room tax.
Although many room-sharing services like VRBO and Couchsurfing exist, Airbnb has seen huge spikes in use, making it the focus of legal discussions. According to an Airbnb promotional timeline, rental listings have grown from 120,000 at the start of 2012, to 300,000 listings today. Over 4 million people have booked rooms on the site since it began in 2008.
As room-sharing sites continue to grow in popularity, cities across the country are wondering how to deal with the legality of hosting. In May 2013, a New York judge fined Airbnb host Nigel Warren $2,400 for violating city laws. Airbnb's legal team appealed the case, and won. Still, New York City prosecutors are questioning whether or not residents are breaking state sublet laws. Even with one small win, the future of room-sharing sites is unknown.
The proposed amendment to Madison's zoning code states that rooming houses must be the primary residence of the owner. In order for renters to offer boarding to tourists their lease must explicitly say that hosting is allowed.
Three alders voted against the amendment, including Ald. Scott Resnick, who said it "guts Airbnb."
"If you look at how cities are battling this, I have not found a city that actually works to ban it properly. There have been many attempts that go too far with the regulation, and I think that's what this one does here."
Resnick referenced the price of a public health license, which would cost hosts $595 upfront -- $375 for an initial health inspection plus $220 for the cost of a yearlong permit -- as being potentially debilitating to hosts. He also said that the 30-day limit is unrealistic, and would likely make hosting economically unfeasible.
James Lloyd, a local Airbnb host, agreed.
"If we're only allowed to rent our houses for 30 days a year, most of us are charging on the order of $50-$75 per night, this no longer becomes a financially sustainable model for us," said Lloyd.
Lloyd also offered that Airbnb benefits Madison as a whole. "What my friends and I do here is very valuable to the Madison community. Many of us are very strong ambassadors for the city of Madison... and making Airbnb unfeasible for all of these folks is going to cut out that ambassadorship."
Still, not all Madison residents view Airbnb hosts as ambassadors. Madison resident John Jacobs said that legalizing tourist rooming houses "will allow a hotel to be operated anywhere in a single-family residential neighborhood for 30 days, or 15 weekends a year."
Ald. Shiva Bidar-Sielaff, one of the amendment sponsors, said it was important to be able to expect predictability in neighborhoods. "The majority of [complaints] are like the ones Mr. Jacobs pointed out -- predictability and expectation in a residential neighborhood of who your neighbors are and who you're going to see on a daily basis."
Bidar-Sielaff said that the proposed amendment is not that different from current law. Both the public health licensing and room taxes are state requirements for hotels, motels and tourist rooming houses that have been in place for some time. She says the only additional requirement being created is the 30-day ceiling on renting. "I think that we've gotten to a reasonable place. It is not a lot of rules."
Lloyd, however, says the ideal solution does not involve government regulation at all.
"I would recommend any host reach out to their neighbors, discuss the situation, and ensure that the neighbor will contact the host before contacting authorities. Airbnb is a self-regulating economy... the wiser approach would be to significantly lower the barrier to entry and make doing the right thing the easiest thing for Airbnb hosts."
The Common Council could review the zoning change amendment as early as Oct. 29, but no date has been set yet.