I have worked with the Mayor's office to cosponsor an item that will legalize and regulate short term rentals in Berkeley. The proposed language is available here.
Please look at the following FAQ's regarding this proposal:
Why are you regulating short-term rentals in the first place?
Short-term rentals are currently illegal in Berkeley (prohibited by the Bed and Breakfast Ordinance). This legislation would allow many responsible hosts to continue legally while providing the City with revenue and protecting the long-term housing supply. This only applies to rentals of 14 days or less, anything over that is currently unregulated.
How does this benefit hosts?
Hosts will be able to legally rent out units. As long as hosts are present during the rental, they can rent for an unlimited number of days. They can rent out their space for a cumulative total of 90 days when they’re away.
How does this benefit neighbors?
Neighbors will know that there will be short-term rentals nearby and be provided with local contact information in case problems arise. Hosts will be required to notify short-term renters of our city’s noise and smoking ordinances. The City will be able to better enforce violations through a nominal enforcement fee.
Don’t short-term rentals take away housing that could be used for long-term rentals? Won’t apartments and condos be converted into permanent short-term rentals?
No, because the host has to live in the unit for no less than 9 months a year and be the permanent resident.
How does this benefit the city?
It will likely generate significant revenue through business licenses fees and the transient occupancy tax (TOT). It will also establish a protocol for short-term rentals, which are currently illegal, and provide funding for enforcement.
I rent out a room in my house--how will this affect me?
If you rent out a room in your house and live there when renters are staying, you won’t be affected. You will, however, need to get a business license and give one-time written notice to immediate neighbors. You will also need to provide guests copies of the noise ordinance, and when applicable, the multi-unit smoking ordinance. You can rent out your house short-term (14 days or less) for a cumulative total of 90 days when you’re away. Any rentals longer than 14 days would continue to be unregulated.
I’m a host in a rental unit--what does this mean for me?
You can legally rent out space in your unit if you have permission from your landlord or property manager, get a business license, and give a one-time notification to immediate neighbors, including those above and below you. When you are there, you can rent out as often you like, but when you are gone, you are limited to 90 cumulative days per year. You will also need to provide guests copies of the noise ordinance, and when applicable, the multi-unit smoking ordinance.
What will a business license cost me?
Your specific rate depends on how much you make annually from short-term rentals. The business license tax is $10.41 for every $1,000 earned for “rental of real property,” with a minimum of $77 per year.
What is the enforcement fee I’ve heard about?
With the passage of a new ordinance, staff time will be needed to administer the program, collect fees, and investigate complaints. New staff may also be needed. A fee that covers enforcement will be a small percentage of rental fees paid by the guest. The Mayor’s Office is requesting Airbnb collect the enforcement fee on behalf of hosts and remit it directly to the City along with the TOT.
Other cities have relied on lump sum registration or permit fees that range from $50 - $1500 annually. This fee may be more than infrequent/casual hosts make in a year, so the Mayor and Councilmember Droste propose a novel enforcement fee that is collected as a percentage of each rental.
The enforcement fee will be set as a percentage of rents by Council Resolution and legally cannot exceed the cost of the enforcement program.
Can I still rent out my backyard cottage?
Yes, if that is your primary residence and you abide by the other requirements.
Won’t these short-term rentals turn my neighborhood into a place for parties?
The current proposal requires hosts to provide guests information on the Berkeley Community Noise Ordinance as well as the Multi-Unit Smoking Ordinance when applicable. Stricter penalties for second-response violations are also proposed to incentivize hosts to remind guests to be mindful of noise levels.
I remember reading about a lot of other requirements about paying taxes and having insurance--isn’t all of that excessive?
The Mayor’s Office was in regular communication with Airbnb during the drafting of the ordinance proposal and if you host with Airbnb, you are covered with liability insurance and they have agreed to remit the TOT on your behalf. (The Mayor’s Office is still in discussion with Airbnb for them to collect and remit the enforcement fee on behalf of hosts.)
The City has not yet begun discussions with other hosting platforms.