The City of Oklahoma City is seeking to do what many other American cities have tried in recent years: regulate the home-sharing industry.
It’s no easy task to write an ordinance that allows homeowners to generate extra income by renting their homes through Airbnb, HomeAway, FlipKey and others while also creating a mechanism to cut down on so-called “bad actors” who abuse the home-sharing model. U.S. cities with home-sharing or short-term rental ordinances have produced mixed results, like Austin, where city leaders passed such tight restrictions and later went on to fight a lawsuit.
After three years of work, Oklahoma City’s proposed ordinance to legalize home-sharing is making its way through City Hall. The Oklahoma City ordinance seeks to regulate short-term rentals in owner-occupied listings and whole-home listings and provides tools for enforcement, should home-sharing guests cause nuisances, according to Laura Johnson, an assistant city manager that oversees Development Services.
The city is not trying to prevent use of home-sharing sites but place a “mechanism where it has enforcement in the event that problems and abuses arise,” Johnson said in a late April meeting of the Urban Development Committee of the Planning Commission, which is charged with reviewing the ordinance and sending a recommendation to the Planning Commission.
The ordinance faces pushback, particularly from residents of Historic Preservation Districts, which are often located near desirable commercial districts that attract out-of-town guests. Residents in Heritage Hills and Jefferson Park are expressing concerns about investors renting or buying homes to list on home-sharing platforms as well as travelers creating unwanted neighborhood activity through parking, noise, parties and damage to homes.
What is home-sharing?Home-sharing, also known as short-term rental, has become a big part of the growing sharing economy, a term used to describe the collaborative system in which owners rent out something they are not using, such as a car, house, bicycle or clothing to a stranger, or provide a service to a stranger.
Big names in the sharing economy include Uber, Lyft, Zipcar, TaskRabbit, PoshMark, and Airbnb, which began in 2008 when a trio of young adults decided to rent out air mattresses in their San Francisco apartment as a way to earn some extra money. A decade later, Airbnb lists nearly 5 million rentals both nationally and internationally, serving 300 million travelers.
Through Airbnb, users with extra rooms or homes to rent create profiles to post information about their spaces on the internet. Travelers seeking accommodations in an area view the various profiles to find one that meets their needs. Airbnb collects a portion of each night’s stay while the host nets a majority of the payment.
Home-sharing services can be a cheap alternative to hotel rooms and provide travelers with accommodations that go beyond traditional hotels. It has become a lucrative business. A recent study from Inside Airbnb, an independent website that tracks and monitors the company’s listings, found that in Los Angeles, regardless of neighborhood, it takes an average of 83 nights per year to earn more on Airbnb than renting to a renter for one year.
Airbnb returned more than 300 lodging options in Oklahoma City during a search on April 30. According to the company, 11,000 guests used Airbnb in Oklahoma City in 2016.
Airbnb, as well as other home-sharing programs, are viewed as helpful to residents and travelers alike.
“Home-sharing helps families in Oklahoma City use what’s typically one of their greatest expenses — their homes — as a way to earn a little extra money to help make ends meet,” Laura Spanjian, Airbnb’s public policy director for Oklahoma, wrote in an email to Oklahoma Gazette. “At the same time, Airbnb provides an affordable way for people to visit the city and gives visitors the chance to experience neighborhoods they might otherwise miss. With more than 40 percent of Airbnb guest spending done in neighborhoods in which a guest stays, this delivers an economic boost to businesses that have not traditionally benefitted from tourism.”
"Airbnb provides an affordable way for people to visit the city and gives visitors the chance to experience neighborhoods they might otherwise miss." Laura Spanjian
OKC’s versionCurrently, Oklahoma City does not exactly regulate home-sharing, as its zoning laws don’t allow for short-term rentals. A few years ago, the city posted home-sharing requirements on its website, including the $24 hotel-motel license and levying a 5.5 percent hotel tax. The requirements went largely unnoticed. Oklahoma City Council instructed city staff to craft an ordinance to regulate home-sharing.
The proposed ordinance establishes home-sharing as a conditional use in all zoning districts, PUD (planned unit development) and SPUD (simplified planned unit development) that permit single-family residential. Under the ordinance, local property owners can rent out their homes or rooms to visitors on a short-term basis not to exceed 30 days. Further, the owner or host is required to comply with “any applicable building or fire codes adopted by the city,” obtain a home-sharing license and pay all applicable fees and taxes.
City staff purposefully drafted a broad ordinance in hopes to avoid possible litigation from home-sharing services. The city is also concerned about state leaders using preemption to strip municipalities of their capabilities to address home-sharing, Johnson said.
State legislators in Tennessee and Indiana proposed bills to override local municipal decisions in home-sharing and short-term rentals.
Like other ordinances, code enforcement is compliant-based. Following a complaint against a home-sharing property, an inspector from the Development Services Division would investigate violations sent to the municipal counselor’s office. After review, municipal charges could be filed against the resident with the possibility of losing the home-sharing license.
What is driving other cities to consider home-sharing regulations is absent in Oklahoma City. In cities like Boston and New Orleans, city leaders sought restrictions to protect affordable housing after finding that home-sharing listings were linked to rent increases. Other cities, including Stillwater, pushed ordinances as a means to collect local taxes.
Both the City of Oklahoma City and Oklahoma Tax Commission reached an agreement with Airbnb to ensure the company collects sales and state-collected lodging taxes. Last September, Airbnb began collecting the 5.5 percent hotel occupancy tax for Oklahoma City.
Spanjian, of Airbnb, said the proposed regulations “allow [the] community to continue sharing their homes to make ends meet.” The company is committed to working with the city “to ensure [its] hosts and the city recieve the full economic benefits of home-sharing.”
The city’s Planning Commission most recently debated the ordinances’ merits at a special meeting of the commission’s Urban Development Committee April 26. The ordinance will be revisited for discussion during a special meeting May 10. The ordinance is still several steps away from coming before Oklahoma City Council.
Under Oklahoma City’s proposed home-sharing ordinance, hosts or owners must meet the following conditions to operate:
Just the facts
- The rental of the entire home or bedroom(s) may not exceed 30 consecutive days per renter/guest.
- The owner/host shall be required to comply with any applicable building or fire codes adopted by the city.
- The owner/host must obtain a home sharing license.
- All applicable fees and taxes must be collected and paid.