San Jose Considers Airbnb Tax

San Jose may start taxing people who rent their pads through Airbnb and other home-sharing services.

A proposal making its way to the City Council on Tuesday would impose a 10 percent tax on residents who rent their homes to strangers through the subletting broker—the same rate levied on hotel rooms.

It would also legalize home-sharing, which has operated in the underground economy regardless. News reports say that about 300 people in San Jose sublet their homes through the online service, many of them to help subsidize costly rents and mortgages.

San Francisco-based Airbnb has facilitated something on the order of 25 million guest stays around the world since launching in 2008. If San Jose approves the new tax, Airbnb would pass the cost down to travelers. The website already charges up to 12 percent for each booking.

San Jose’s ordinance would require hosts to let the city know when they have a guest, so neighbors could get a heads up about parking, noise and other issues that arise from playing hotel for a night or more. It would also cap Airbnb nights to 180 per host per year.

City officials originally proposed the tax this past spring. The 10 percent tax would only generate an estimated $150,000 a year. The city’s Planning Commission voted unanimously to support the ordinance, urging the city to create a registry of Airbnb hosts to make sure they comply with the new rules.

Councilman Xavier Campos proposed the tax in April. Mayor Chuck Reed brought up the idea a month before, in his March budget messageSimilar taxes have been passed in San Francisco, Portland and New York City.

More from the San Jose City Council agenda for December 9, 2014:

  • Speaking of which, a new audit says the city needs to double down to address its ever-growing backlog of facility repairs.
  • San Jose is looking to annex a few hundred acres around Communications Hill to make way for extensive new development.
  • Councilwoman Rose Herrera is urging the city to approve a deal with developers to build new softball fields in her district. The project has been held up for years, and, if approved, would be the last of 95 projects paid for by a bond measure passed by voters 14 years ago.
  • Heritage Oaks Memorial Park cemetery wants to expand into the south San Jose hills. Critics of the plan say the expansion would remove too many oak trees, would suck up precious water during a drought and may threaten burrowing owls. Proponents say it would protect an area of historic importance to the community and that the cemetery has been a responsible environmental steward.
  • Mayor-elect Sam Liccardo wants to see more SmartPoles in San Jose—intelligent LED street lights. In 2007, the city approved a plan to convert 100 percent of the city's 62,000 streetlights from low-pressure sodium to energy-efficient LEDs. So far, only about 6 percent have been upgraded. Liccardo and Herrera are urging the city to lease rights for "small cell" capacity to Philips in exchange for more LED conversions.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected]. Follow her on Twitter at @jennwadsworth.

2 Comments

  1. Savers @ Bascom near Stevens Creek? That area is or at least used to be one of the “unincorporated” pockets of San Jose – in other words it was Santa Clara County’s problem. Did this incident happen before the City assumed responsibility?

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