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Phila. mulls a tax on Airbnb rentals

Rentals through Airbnb, the online marketplace where people can list their homes for short-term stays, could soon be taxed in Philadelphia.

Rentals through Airbnb, the online marketplace where people can list their homes for short-term stays, could soon be taxed in Philadelphia.

The Nutter administration is making the push ahead of the September visit of Pope Francis, when home rentals are expected to be in high demand.

"People are bringing in money on this and, at least in the pope's visit, bringing in a decent amount of money," said City Councilman William K. Greenlee, who introduced a bill Thursday on behalf of the Nutter administration to regulate and tax short-term rentals.

In Philadelphia, nightly rentals through Airbnb range from the economical ($25 for space on a University City futon) to the extravagant ($686 for a two-bedroom house near Passyunk Square) and the eccentric ($100 for a yurt in a West Philadelphia community garden).

Scores of rentals - and some of the site's most expensive - have been listed ahead of the pope's visit. The site is also likely to see high traffic when the Democratic National Convention comes to town in July 2016.

While Airbnb has operated in Philadelphia for years, many of its rentals are technically illegal, because the city's zoning code allows hotel operations only in commercial areas.

Under the bill introduced Thursday - which applies to those renting through Airbnb but also other means, such as Craigslist - short-term rentals would be allowed in residential areas and taxed at the city's current 8.5 percent hotel tax. Rentals of 30 days or fewer would be taxed, while those longer than 30 days would have to receive a rental license. The legislation would take effect July 1.

Hotel tax revenue is split between the Philadelphia Convention and Visitors Bureau, Visit Philadelphia, and the Convention Center.

It's unclear how much those groups would receive. An Airbnb spokeswoman and Mark McDonald, Nutter's spokesman, said Philadelphia-specific revenue estimates were not available.

Airbnb also declined to provide revenue numbers for other cities where it is taxed, but told the Washington Post that six months after taxes were imposed in Portland, Ore., and three months after they were imposed in San Francisco, about $5 million had been drawn between the two cities.

Within the last year, the company has also begun taxing rentals in Washington; Chicago; San Jose, Calif.; and Amsterdam, Netherlands.

Valerie Rushmere, who has been hosting through Airbnb for about a year and a half, said that if a tax were imposed, she would likely adjust her rates out of concern that some renters would go elsewhere. She currently charges $58 to $75 per night for one of Airbnb's less-traditional renting arrangements: use of her Fairmount yoga studio.

Between classes, she transforms the space into a bedroom.

"I have mastered the art of making a quick change," she said. "I have three small area rugs. I have a folding table, two folding chairs. I have an air bed. Two nightstands. And I whip up this quick bedroom setup. It looks like a bedroom, sort of. Except with lots of mirrors."

Rushmere said that since starting out, she has made more than $15,000 on the studio and one other room she has rented.

Ed Grose, executive director of the Greater Philadelphia Hotel Association, said it was time those businesses paid their share.

"If they're going to benefit from all of our hard work marketing the city," he said, "then it's only fair their guests pay the same tax."

On Thursday, City Council also passed two bills sponsored by Councilwoman Blondell Reynolds Brown aimed at curbing litter. One requires any business that sells packaged or prepared foods for takeout to put both a trash and recycling bin within 10 feet of the front door. The second bill makes landlords of buildings with 10 or more units provide a communal trash and recycling receptacle for tenants.