San Bruno examines short-term rental policy | Local News - San Mateo Daily Journal

Regulating the short-term rental industry will be no financial boon for San Bruno officials who examined potential revenue opportunities brought by taxes and fees on stays at homes rented on Airbnb or similar websites.

During a study session Tuesday, Jan. 14, officials examined the currently unregulated industry in search of opportunities to potentially bolster the city’s financial footing.

But with only a handful of rentals online and a significant overhead cost associated with monitoring the city’s digital rental landscape, officials determined it would likely only bring in about $100,000 annually.

“There’s really not that much activity in the city that would translate into really significant revenue,” said Vice Mayor Michael Salazar.

Such an assumption is based on a proposed system requiring those renting property online to purchase a $750 permit which would cost $500 every other year to renew. Hosts would also be required to pay business license and transit occupancy taxes, same as any other company making a profit from renting a room.

The fee system would bring in an estimated $253,000 annually, according to a city report. But the revenue would be offset by a projected $123,000 outlay to operate the permitting and monitoring program, according to the report, leaving about $130,000 to fuel the city’s budget.

Salazar noted the potential profit could be cut even further if the fee system is established, because the cost could dissuade existing hosts from continuing to rent rooms.

“There is a good likelihood that the people participating would cease to participate once there is a barrier to entry,” he said.

The discussion is part of an ongoing effort by officials to solidify the city’s financial footing by enhancing tax revenue streams and identifying operating efficiencies in the annual budget.

That the industry is unlikely to generate much money will not dissuade officials from seeking regulations though.

Mayor Rico Medina said he favored establishing policies to help officials track the popularity of the industry, and also address potential issues commonly associated with short-term rentals.

He said such rules could combat parking or traffic problems which occasionally rise from online home rentals, and establishing a database of hosts could be a useful source of contact information in case unruly behavior occurs.

Salazar shared a similar perspective.

“Having a grasp on that and something on the books gives us a tool to limit, correct or restrict some of these things,” he said.

Additionally, Medina said the popularity of short-term rentals can further constrain the housing market, as some may prefer to put their property online rather than occupy it or find a permanent tenant.

“We are not wanting to diminish the housing inventory which we already know is challenging,” he said.

To address the issue, officials are considering capping the amount of days per year which a short-term rental can be listed by a host.

Medina balanced these perspectives though by noting only a handful of complaints have been lodged at short-term rental properties in the last couple of years, indicating the industry is not a major issue in San Bruno.

Officials have been crafting policies and regulations for the short-term rental market since 2018. No decision was made at the most recent meeting, and officials expect the issue will return for further deliberation in a couple months.

As the policy takes shape, Salazar said an eye will be kept to assuring the rights of private property owners are respected. He acknowledged there are many responsible local hosts who rely on the revenue generated by renting their property online.

“I want to make sure that we are not hurting people who are sort of relying on this but are not contributing to the broader problem,” said Salazar.

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