New short-term rental law takes effect in Philadelphia

The new year also brings new laws that take effect in various parts of the country.

A new Philadelphia law, which goes into effect today, will significantly impact Airbnb and similar online brokers by requiring short-term hosts who live in their rental units to obtain “a “limited lodging operator” license, the Philadelphia Inquirer reported.

While inexpensive, the license also means hosts have to adhere to other requirements to ensure their units are up to code. Owners who don’t live in the units they’re renting have to obtain a hotel license.

Owners then have to provide their license numbers to online brokers such as Airbnb. The online companies will be liable for violations, meaning they’re responsible for enforcement of the license provisions for owners to list their properties.

The companies will be liable for any violations. The city expects that means the tech platforms will not allow those without licenses to list their properties.

The law was passed in 2021 to provide more oversight after a series of issues arose concerning short-term rentals, the outlet reported. The city since 2015 has required owners of short-term rentals to obtain zoning permits for businesses that were run out of their homes. And it’s always been illegal for owners who live offsite to rent out their properties without a hotel license. But those rules weren’t enforced often, if at all, according to the Inquirer.

The delay in the current law going into effect was to provide owners with time to adjust to the new law. To date, fewer than 250 people have obtained a limited lodging operators license, and about 164 people have received a hotel permit, the Inquirer said. That’s out of thousands of city hosts listing on Airbnb alone, the outlet said.

Not surprisingly, not everyone is pleased with the provision.

“This is financially really impacting me because this is 100 percent of my income,” property owner Angela Romero told the outlet. “I don’t know how I’m going to be able to live, and it’s giving us a very short time frame for us to figure out how to pivot.”

“What’s coming to a head right now is whether we are about to ban 70 percent or more of short-term rentals,” Theron Lewis, founder of Philadelphia STR Association, told the outlet. “People are trying to apply for a variance, but [the Zoning Board of Adjustments is] not able to see anybody until February or later. If something doesn’t change, these people are going to lose their businesses.”

Philadelphia isn’t the only city to tighten regulations around short-term rentals beginning in 2023.

In New York City, a new short-term rental registration law similar to Philadelphia’s could remove up to 10,000 Airbnb listings from the market, according to NPR.

Instead of requiring licenses, the law — which could go into effect this month — requires hosts to register their short-term rentals with the city’s database. Hosts who fail to comply could face fines of between $1,000 and $5,000, according to NPR.

— Ted Glanzer