BPOA Article Library
Housing Policy • August 23, 2016
Short Term Rental Laws in Berkeley
Berkeley council votes to crack down on short-term rentals of multiple units by same owner
By Emilie Raguso
July 11, 2016 2:48 pm
There are hundreds of rooms and units available to rent on Airbnb even though short-term rentals are currently illegal in Berkeley. Image: Airbnb
Prompted by concern that too many units are being taken off Berkeley’s long-term housing market for short-term uses such as Airbnb, the City Council voted Thursday to penalize landlords who rent out multiple properties for less than two weeks.
In a unanimous vote, following a motion by Councilman Kriss Worthington, officials asked staff to initiate an enforcement process after the city gets at least three verified complaints about property owners, individuals or companies that rent out multiple units on a short-term basis. It’s the first time council has given direction to staff to enforce the rules about short-term rentals that are already on the books, according to the city attorney.
Short-term rentals — those less than 14 consecutive days — have always been illegal in Berkeley. Council has been working since 2014 to come up with rules to regulate them as the practice has become increasingly popular through sites such as Airbnb, VRBO (Vacation Rentals by Owner) and HomeAway.
According to the Berkeley Tenants Union, “The reason that rentals of less than 14 days have been against the law in Berkeley is because such rentals allow an owner to get around tenant protections and rent control.”
Hundreds of rooms and units are listed in Berkeley on Airbnb, one of the more popular sites to find alternatives to hotels, bed and breakfasts, and other more traditional lodging for getaways.
A search for entire homes available in Berkeley on Airbnb during a random week in September turned up more than 180 short-term rentals. According to a 2015 report from Mayor Tom Bates and Councilwoman Lori Droste, there were 1,162 short-term rentals on Airbnb, VRBO, HomeAway and FlipKey, though the report didn’t distinguish between entire homes and other types of rentals, such as private rooms or room shares.
There are about 400 rent-controlled units in Berkeley being used only as short-term rentals, the Rent Stabilization Board and Berkeley Tenants Union said last year. According to the Tenants Union, there were at least nine property owners in Berkeley that had multiple units for rent and were not living on site.
The city attorney and city manager said Thursday night that Berkeley plans to hire a third-party vendor to identify all the units in Berkeley that should be part of its registry of short-term rentals. That vendor has a way to find the units online without relying on individuals to sign up for the registry on their own, staff said.
Many of the speakers who addressed council Thursday said they were living on site and rented out units that would not work for long-term use. They told council the extra income was helping them stay in Berkeley. They pleaded with the city to focus its attention on the larger-scale rule-breakers who are actually taking what would otherwise be long-term properties off the market.
After debating some of the finer points about what the city’s ordinance should look like — particularly after a preliminary vote in June — officials agreed to have staff do further research before ratifying the overall law.
In the meantime, however, officials want to begin immediately to address the issue of owners with multiple units who are flouting the rules.
“It’s currently against the law and it will continue to be against the law,” Worthington said. “Therefore there’s no reason to delay.”
All seven council members in attendance voted in favor of the resolution, which goes into effect right away. It requires three verified complaints, however, before any enforcement action can be taken by staff. (Council members Lori Droste and Darryl Moore were absent from the meeting.)
Exactly what enforcement might look like was not defined, but it could result in “criminal infractions, nuisance abatement [or] injunctive relief,” City Attorney Zach Cowan told council. “It’s whatever’s appropriate in the case. Every case is going to be different.”
Council also voted to have the city’s Planning Commission look at the possibility of allowing accessory buildings to be used for short-term rentals, and have staff consider the possibility of grandfathering in permits for accessory dwelling units currently being rented out on a short-term basis. Council asked staff to look at what the impact on the long-term housing market would be of taking that step, since many of the speakers said their rentals would never be on the long-term market as it was.
Council asked the commission to look into how to define kitchen and cooking facilities, and asked staff to research how the city might track units using a single ID number. Staff has also been directed to look at adding language to the ordinance “stating that the host must reside in the unit,” and to come back within 6-12 months of any new rules to assess how it’s going.
Part of the reason for the push to create the ordinance, in addition to legalizing and regulating what’s already a common practice, is to allow the city to collect taxes on the rentals through the transient occupancy tax, the same way hotels are taxed. As described on the city website, that’s a tax of “12% on the room rate … paid by guests in hotels.”
Council did not set a date for the issue to come back, but Mayor Tom Bates said it might not happen until much later in the year.
Learn about housing code enforcement on the city website. See the current draft language and staff report prepared for Thursday’s meeting.