Since its launch in 2008, Airbnb has disrupted the hospitality industry, allowing people to earn extra income by renting out all or part of their homes and providing affordable accommodations for millions of travelers.
However, the rapid growth of a short-term rental market has raised several controversial issues in popular tourist cities worldwide. As a result, many local governments have issued strict STR regulations that limit the ability of property owners to rent out their homes through OTA platforms like Airbnb or Vrbo.
Airbnb regulations vary from city to city, and what may be allowed in one city may not be allowed in another. So, if you are considering starting hosting on Airbnb, it’s vital to check your city’s rules before you list your place. With that in mind, we’ve created this blog post where you can find some helpful information about Airbnb regulations by city, including licensing requirements and taxes.
But you should remember that we don’t provide legal advice, and local short-term rental regulations are constantly in flux. You should research and consult your local lawyer to ensure you understand all laws and regulations in your jurisdiction and are taking the necessary steps to comply with them.
Understanding your city’s current Airbnb laws and regulations will help you feel more confident as you start your hosting journey. Once you’ve set up your business, consider using vacation rental software like Hospitable to streamline your routine operations. Hospitable can help you automate conversations with guests and quickly craft responses to uncommon questions using ChatGPT integration, assign tasks to your team, sync availability and prices on multiple channels, and more.
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Airbnb Regulations by City
Although there are cities with plenty of opportunities to invest in Airbnb properties, a growing number of local governments are taking measures to regulate short-term rentals, experimenting with different rules. STR regulations vary from location to location and can be confusing.
Most cities have zoning or administrative codes that include rules that set out the way you can use your home and may restrict your ability to host paying guests for short periods. In some cities, hosts are required to register and obtain a business license or a special permit before they list their property or accept guests. Some cities limit the number of properties a host is allowed to list, and others cap the number of nights a property can be rented out in a year.
Airbnb Regulations in New York
On September 5, the city started enforcing a 2022 law that makes Airbnb hosting far more difficult for homeowners in New York City. The law requires hosts on Airbnb, Vrbo, and other short-term rental sites to register with the city. Booking platforms are prohibited to process transactions for unregistered short-term rentals.
You can’t rent out an entire home or apartment to guests for less than 30 days, even if you own it or live there, and this rule applies to all permanent residential buildings. Hosts must also comply with such rules as a requirement to stay with guests in their apartment and a reservation cap of two people. The host renting out the home or apartment must “maintain a common household” with the guests.
Hosts and booking platforms are penalized for failing to comply with the law. Airbnb hosts who violate the rules could face fines of up to $5,000 per stay, and platforms could be fined up to $1,500 for transactions that involve illegal rentals.
The income you get from short-term rentals is taxable. You should also check with the NYC Department of Finance to determine whether you need to collect the hotel room occupancy tax.
Airbnb Regulations in Chicago, IL
The City of Chicago’s Shared Housing Ordinance, which went into effect in 2016, requires hosts to register their shared housing units with the city before listing them on sites like Airbnb. You can do it through the Department of Business Affairs and Consumer Protection’s Shared Housing Registration Portal.
You must create an account and submit your application for a registration number. Registration isn’t free—there is a fee of $125. Registration numbers are valid for one year and must be renewed annually. Remember that each shared housing unit requires its own approved registration number.
If you plan to list more than one shared housing unit, the City of Chicago considers you a Shared Housing Unit Operator. You must obtain a specific license before applying for any additional registrations. The Shared Housing Operator license costs $250 and is good for two years.
Chicago imposes a 4.5% Hotel Accommodations Tax, 4% Shared Housing Surcharge, and 2% Domestic Violence Surcharge on the listing price, including any cleaning fee for 29 nights and shorter reservations. Airbnb collects and remits these taxes and fees in Chicago.
Airbnb Regulations in Seattle, WA
If you want to run an Airbnb in Seattle, there are four different types of licenses that you may need to apply:
- Business license tax certificate, also known as a general business license, is a must for anyone doing business in Seattle, and you only need one business license for all your listings.
- Short-term rental operator’s license must be posted on every Airbnb listing. It costs $75 per unit and is valid for one year. A short-term rental operator’s license allows you to host up to two dwelling units you own as short-term rentals, one of which must be your primary residence, and the other may be your vacation home or second home.
- Rental Regulation and Inspection Ordinance (RRIO) is required if you host a secondary residence. It costs $70, requires you to meet basic housing maintenance requirements, and allows the city to inspect your rental property.
- Bed and breakfast operator’s license is required from hosts who operate a bed and breakfast. You can apply for this license online through the City of Seattle. The license costs $75 and is valid for one year.
Airbnb Regulations in Milwaukee, WI
Currently, no official Airbnb rules regulate short-term rentals in the city of Milwaukee. That means there are no restrictions, and you can own and operate a non-owner-occupied vacation rental there. But running an Airbnb is a business, so you’ll need to pay state and local taxes, including 5% state Sales Tax, County Tax, and Local Exposition Taxes (3% Basic Room Tax and 7% Additional Room Tax).
Short-term Rental Laws in Austin, TX
Owners of short-term rental properties in Austin are required to obtain an operating license and renew it annually. This law applies to all properties rented for less than 30 consecutive days, including rooms and guest houses.
The operating license costs $733.80. You can apply online, providing proof of property insurance, proof of payment of the City of Austin Hotel Occupancy Tax, a certificate of occupancy, and driver’s license information. Hosts must renew the license before it expires.
STR Laws in Phoenix, AZ
In January 2020, the Phoenix City Council passed the Short-Term Vacation Rental Ordinance that requires owners of STR properties to register with the city using the online application form and provide emergency and complaint contact information. You must also print your registration certificate and display it inside your rental within 10 feet of your primary residence.
Vacation rental properties in Phoenix can’t be used for non-residential purposes, holding special events that require licenses or permits, or running a retail business. The ordinance sets penalties for violations, starting at $500.
But, in general, STR regulations in Phoenix are lenient. No limits exist on the number of properties a host can operate and no yearly caps on the number of nights they’ve rented. Being an Airbnb-friendly city, Phoenix offers great opportunities for running a successful business, especially if you list your property on multiple OTA platforms.
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Airbnb Regulations in Dallas, TX
In June 2023, the Dallas City Council approved the new STR regulations that restrict where short-term rentals can operate—the new zoning rules ban STRs from single-family residential neighborhoods. They are still allowed in multi-family neighborhoods and commercial areas, but each unit must include at least one off-street parking space.
Hosts must register with the city annually and pay hotel occupancy taxes. The rules also limit the occupancy to 3 people per bedroom and set the maximum number of guests at 12. The new rules took effect immediately but will not be enforced until December 14.
Final Thought
Hopefully, our article will help you navigate the complex landscape of Airbnb regulations by city. But remember that STR laws and regulations change frequently and locally, so if you’re planning to invest in vacation rentals in a popular tourist destination, you must do due diligence. You need to understand all the relevant Airbnb regulations and tax rules in your area at the city and state levels to ensure that you’ll be fully compliant.
Note: This article isn’t intended to provide legal advice. If you have questions about Airbnb regulations in your jurisdiction and the laws that may apply to you, contact your local government or consult a local lawyer or a tax professional.
You may also want to check out our Airbnb hosting guide for beginners that covers essential steps you need to follow to get started and set your STR business for success.
