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State lawmakers consider tax on short-term rentals to fund affordable, workforce housing

The bill would impose a 15% statewide tax on people staying at short-term rentals.

SAN DIEGO — California lawmakers are considering a new bill that would tax short-term rentals to fund affordable housing.

Senate Bill 584, proposed by Senator Monique Limon from Santa Barbara as a way to address the state's housing crisis.

“Our vacation rental market is something that has increased quite significantly in the last decade, and to the point that it has now a vested role in a lot of our communities, particularly in areas that are tourist attractions in the state,” said Limon. 

Limon says SB 584 is part of a broader conversation about funding sources for affordable and workforce housing. 

“Trying to identify what kinds of investments in the form of an assessment to vacation rentals should come out and to also keep dealing with some of our hardest issues in the state," she continued.

The bill would impose a 15% statewide tax on people staying at short-term rentals, that’s in addition to existing Transient Occupancy Taxes. 

The tax would not apply to hotels. The proposal has faced some pushback from companies like Airbnb.

The rental company says the bill would create an unfair advantage for hotels, making it harder for local hosts to compete. It adds that rental prices would increase significantly.

In a statement, a spokesperson for Airbnb said,

SB 584 is an exorbitant tax on short-term rental stays that impacts regular Californians who share their home to make extra money to keep up with the rising cost of living."

“The bill does not eliminate any individual's opportunity to have a vacation rental, to use a vacation rental," added Limon.

Limon says the bill aims to create money to help cities reach housing development targets.

"When housing is so limited, when housing is so unaffordable we have to find ways to have a conversation. And since our cities lost redevelopment years ago this is really a version that would create a sustainable budget proof, it doesn’t come from the general budget, form to invest in our communities to build affordable and workforce housing," she added.

Should the bill move forward, the final vote will be in September.  

 WATCH RELATED: Are hotels now cheaper than Airbnb's? (Oct. 2022).


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