Philadelphia appears to be getting serious about licensing for Airbnbs and similar short-term rental properties. Two years after a law tightened requirements, the city says it’s started the process of getting listings pulled down from the web if the hosts aren’t complying with the rules.
Earlier this month, the Department of Licenses and Inspections started notifying websites like Airbnb, Vrbo, and Booking.com of properties listed on their sites that have yet to meet the city’s zoning and licensing requirements.
By law, those websites are required to take down out-of-compliance listings in Philly within five business days.
The city estimates somewhere between 1,500 and 1,700 short-term rental properties haven’t gotten the proper permits and licenses, per a July 12 press release.
The effort to delist those — at least until they’re in compliance — is the latest step toward making sure people are actually following the requirements established in a 2021 law. Previously slated to go into effect in July 2022, the city extended that deadline to Jan. 1 of this year to give hosts more time to get the proper zoning permits and licenses.
“This deadline does not remove the legal requirement for short-term rentals to be licensed,” the city’s blog post on the extension reads. “It just extends the deadline by which platforms must collect a valid license number from hosts.”
Enforcement kicked off at the “beginning of this year,” according to Shemeka D. Moore, spokesperson for the city Department of Licenses and Inspections, when the agency “requested specific information from booking agents via subpoenas.” The delisting effort “is the next phase of enforcement,” Moore said.
Airbnb says it’s complying. The platform has been working closely with the city for months, a spokesperson told Billy Penn, “to ensure they have the necessary tools and support to effectively enforce their current rules, including the ability to identify listings that may be unlicensed for removal.” Tracie Robinson, a regional manager for the Expedia Group, which owns Vrbo, said the company “works with officials across the country to support regulations that address local needs.”
Both platforms said they communicate with hosts about regulations, but neither directly answered a question about when those communications began in the case of Philadelphia. Neither company responded to a question about how many properties the city has requested they delist thus far.
A brief history of Philadelphia’s short-term rental laws
Philadelphia City Council passed its first ordinance legalizing and regulating short-term rentals in 2015, a few months ahead of a visit from Pope Francis that was expected to boost tourism numbers, and a year ahead of Philly hosting the Democratic National Convention.
These early regulations only extended to certain types.
Some property owners approach short-term rentals as a business, listing a building or an apartment on Airbnb or a similar platform year-round. Others might list their own house or apartment temporarily while they’re out of town. Some people rent out part of their home — sometimes even just one room — while they’re still actively living there.
The initial city legislation allowed “limited lodging,” i.e. renting out all or part of your primary home in increments of 30 days or less, without a license as long as hosts were doing it for 90 days or less each year. Hosts who wanted to rent their primary residence out for 91 to 180 days of the year had to obtain a permit. Short-term rentals without permanent residents were treated as hotels and needed the proper licensing for that.
The ordinance put some basic safety requirements for short-term rentals in place, like requiring carbon monoxide and smoke alarms, and limited the number of non-related guests. It also started applying the 8.5% hotel tax.
Controversies over short-term rentals arose in the years following the passage of that first law, including questions about property safety and complaints about “party houses” from neighbors during the pandemic.
Spurred by constituents’ nuisance complaints and the inability to get them under control, Councilmember Mark Squilla introduced a bill in 2021 modeled off similar legislation in other cities like New York and Boston.
Unlike previous legislation, the ordinance established zoning and licensing requirements for all short-term rental configurations and aimed to create more transparency and accountability. It passed City Council unanimously. That’s the law being enforced now.
The changes? Even short-term limited lodging requires a permit and a license, and getting one requires providing transparency about the ownership of a property, as well as complying with lead paint safety requirements and some other requirements. Booking websites themselves also have to register with the city and take down unlicensed listings.
Even after enforcement was delayed, some short-term rental operators are not very happy with the situation, per The Inquirer. There have been complaints about communication and a slow-moving licensing process, with some folks waiting on decisions from the Zoning Board of Appeals, which has been seeing long delays since the pandemic began.
Squilla, who sponsored the 2021 bill, told The Inquirer late last year that the bill has to go into effect “eventually.”
“We passed this [over a year ago] and gave them until July,” he told the paper. “Then we gave them another six months. If we do it again, six months from now they’re going to say there’s still people who didn’t know. It’ll just keep continuing on and on and on.”
And grievances about short-term rentals and the city’s requirements for them continue to roll in from all sides. At a City Council hearing in April, local lawmakers heard testimony from both hosts who hoped the city might loosen or modify regulations, as well as neighborhood groups in support of a tougher crackdown. But as it stands, no new legislation has been passed beyond what was put into place two years ago.
How many short-term rentals are there in Philadelphia now?
Great question. It’s “hard to determine an exact number,” said Moore, the L&I spokesperson.
There are around 5,000+ listings across the booking agents who have registered with the city, Moore said, but one property can be listed across multiple websites.
In its press release earlier this month, the city approximated that almost 85% of short-term rental properties — somewhere between 1,500 to 1,700 — are unlicensed. If that estimate is correct, it means there are between 1,875 and 2,000 total short-term rental properties overall.
AirDNA, a short-term rental analytics website, estimates that there are around 5,900 active rentals in Philadelphia — with 69% listed on Airbnb, 12% listed on Vrbo, and 19% listed on both of those platforms. That figure includes listings booked or available for at least one day in June 2023 through Airbnb and/or Vrbo (though it does not include listings on other short-term rental sites).
But the number doesn’t necessarily translate into 5,900 separate properties, explained Madeleine Parkin, a spokesperson for AirDNA. Some hosts may list their homes in several different configurations, she said, “for example one option to rent the whole home and another dividing it into two for smaller groups.”
36% of listings in the past 12 months — around 2,600 — were available to book for more than half of the past year, per Parkin, and 40% were available for less than 90 days.
It’s too soon to tell how the recent enforcement push has impacted the number of listings, according to Parkin. The analytics company expects that a “clearer image will emerge within the next few months,” she said.
What are the rules now for legally operating a short-term rental?
If you want to list a place on Airbnb or a similar platform, you first have to get a zoning permit and a business license. After you get those, you need to get a license specific to the type of short-term rental you want to run. The exact combination of permits and licenses you need depends on whether you live in the place you’re trying to rent out.
If you own a house or apartment, live there, and qualify for the city’s homestead exemption for that place, you can list it on a short-term rental site after you’ve applied for and gotten a limited lodging permit and a limiting lodging operator license ($150).
If you’re a renter, you can do the same thing if you have written permission from your landlord — but only if the place you’re trying to rent out is your primary residence for more than half the year. One geographic exception: Renters in the 10th Council District can’t do this.
Some other caveats: No guests can stay for more than 30 days at a time in short-term rentals that are operating under a limiting lodging permit. Accommodations can only be booked through “booking agents” (e.g. Airbnb, Booking.com) that have been licensed by the city.
If you own a property without a permanent resident and want to use it as a short-term rental, you need to get a visitor accommodations zoning permit and a rental license. In some zoning districts, it’s not possible to get a visitor accommodation permit.
What if you try to skip the permitting process? If the city determines that you’ve flouted the rules, booking agents are required to take down your listing(s) within a week of receiving notice from the city.