Op-Ed: State still struggling to regulate third-party rental platforms

The following op-ed was written by Rep. Lauren H. Carson (District 75, Newport)

For several years, I have been working within the General Assembly, and with the Division of Taxation and local municipalities, on efforts to fairly, safely regulate short-term rentals offered by third-party hosting platforms such as Airbnb and VRBO.

Government at every level has struggled to keep up with the rapid development of this technology-driven new economic sector, which is as yet unregulated, unchecked and very questionably taxed.

I’ve worked on several efforts to address their regulation and taxation, and faced numerous roadblocks. Chief among them is the difficulty of even identifying all the properties that are being offered for rent in this manner.

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In my district in Newport, where hospitality is the driver of the economy, the effects of this development are particularly evident. Our tax and health and safety codes were developed with the expectation that residential properties housed residents, not travelers. This hybrid use — and the use of third-party hosting platforms that complicate the identification of the properties being used — have left Newport, other municipalities and the state at a loss to determine how to ensure that hosts are complying with the measures that are intended to keep guests safe and in compliance with the collection of hotel and sales taxes.

While, ultimately, I would like to see such properties subject to some basic regulation to ensure they are complying with zoning laws and keeping both renters and owners safe, it is difficult to enforce any kind of regulation when we don’t have any definitive way of finding them all.

Incredibly, there is no government entity that can currently track properties rented in this manner, nor is there any list made public or provided to the state or municipalities by the companies that are offering them to renters online. Although platforms like Airbnb remit taxes to the state for distribution to municipalities, the companies provide only a monthly breakdown of the total tax revenue it has collected from properties in each city or town, not their addresses or even how many properties there are.

Attempts to require the companies to provide locations to government entities have been answered with lawsuits.

I have introduced the Third Party Hosting Platform Municipal Registration Act (2019-H 6119) as a first step. My bill would require individual homeowners who list their properties for short-term rentals to register with their city or town. Property owners would be required to provide their contact information and disclose how many rooms they are offering for rent.

Under the bill, the platform would not be required to disclose any information, only to notify Rhode Islanders of their obligation to register with their local municipality upon listing their property. After a six-month adjustment period, the platforms would be responsible for listing only properly registered properties. Owners of unregistered properties would face fines of $250 to $1,000.

Once cities or towns are aware of where the listed rental properties are, they would be able to perform any necessary inspections to ensure compliance with health and safety codes.

We have zoning laws and local ordinances about rentals and residential properties for the protection of the public. They protect people from unsafe buildings and maintain decent standards of living in communities. While Airbnb and similar technology-based rentals were not envisioned when most communities wrote their codes, those local laws were intended to protect everyone, including those who now participate in the short-term rental industry. My bill would make enforcement of existing codes possible.

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