Philadelphia cracks down on short-term rentals

Philadelphia is putting the squeeze on unlicensed online short-term rental operators.

The city’s Department of Licenses and Inspections has instructed platforms like Airbnb and VRBO to remove properties without the required licensing in the city pursuant to a law that went into effect Jan. 1, the Philadelphia Inquirer reported.

The crackdown is part of efforts to regulate the short-term rental industry, which critics argue grew uncontrollably during the pandemic.

The L&I estimates that around 85 percent of the properties it reviewed are unlicensed, amounting to about 1,500 to 1,700 rentals. 

Industry advocates claim the number is closer to 2,500. While the exact number of properties delisted is not known, several hosts, including Steven Patterson, who manages 60 properties in Philadelphia, reported not receiving warnings yet.

“I wasn’t aware there was this legislation,” Patterson said. “Airbnb didn’t say that this was in place. Otherwise, maybe I would never have done it. But I just wasn’t aware.”

Patterson, for his part, argues that the crackdown overlooks the larger picture. He runs Ur Home in Philly, catering to families visiting for extended stays while their children receive treatment at the Children’s Hospital of Philadelphia. The removal of these rentals could force families to opt for expensive hotels, limiting their ability to cook and do laundry during their stay.

The regulation of short-term rentals in Philadelphia started in 2015, requiring operators to obtain zoning permits or hotel licenses depending on whether the property is the host’s primary residence. 

However, enforcement was lax, leading to the proliferation of unlicensed operators.

After a surge of complaints during the pandemic, the city passed new legislation, requiring operators to obtain “limited lodging operator” licenses for short-term rentals in their primary residences and reinforcing hotel requirements for properties where the host doesn’t reside.

Airbnb, the largest short-term rental company, has been working with the city to enforce the rules, but specific policies regarding delisted properties have not been disclosed.

Obtaining licenses has proven difficult and costly for many operators. Those seeking hotel licenses must go through the city’s Zoning Board of Adjustment, which has faced delays and long wait times, especially during the pandemic.

Critics argue that operators had sufficient time to obtain licenses as the new rules were implemented. While over 450 people have received “limited lodging operators licenses,” the enforcement is seen as a significant blow to the industry, potentially resulting in thousands of job losses.

For those affected, there is the option of renting properties for over 30 days, becoming conventional rental landlords. However, concerns persist about short-term rentals impacting housing prices and availability in certain neighborhoods.

Some operators, like Patterson, said they are discouraged by the process of obtaining licenses due to long wait times and a lack of responsiveness from city agencies.

“I’m just beaten down,” Patterson texted to the outlet. “I heard just yesterday that someone had applied for a variance, and it’s been 15 months and still no answer. … To go through all of this and wait for so long with no real hope is crippling to me.” 

— Ted Glanzer