Novato residents who rent their homes through services such as Airbnb, Vrbo and HomeAway could soon be required to pay nearly $700 in new fees as part of the city’s efforts to regulate and tax the industry.
The Novato City Council voted unanimously on Tuesday to advance an ordinance that establishes various fees that short-term rental owners would have to pay in order to receive a business license with the city and avoid penalties.
A rental owner would have to pay the following costs to remain legal:
- a $174 business license fee the first year and $140 for annual renewal
- a $170 property annual registration fee
- a $315 application review fee for the first year, $65 for annual renewal
The fees would be used to recover costs for city staff time and enforcement services provided by the San Francisco-based company Host Compliance. The city estimates it would pay the company $13,650 annually to monitor and regulate short-term rentals in the city.
“If you list a property in Novato, the algorithm will pick it up within 24 to 48 hours,” city analyst Will Morat told the City Council.
The fees require final approval by the council at its next meeting on Aug. 24.
The fees are the latest step the City Council has taken to regulate short-term rentals. They had gone largely unregulated and untaxed until the city adopted new licensing rules in February. The rules are intended to address neighborhood complaints about unruly guests and to begin collecting transient occupancy taxes from these properties that hotels other short-term rentals in the city already have to pay.
About 72 short-term rentals were listed in Novato as of May, Morat said. The city estimates that number of rentals would bring in about $63,000 in transient occupancy tax revenue each year.
City residents recently voted to increase the tax rate from 10% to 12%, with revenue going to the city general fund and to support tourism advertising for the city. Short-term rental owners are required to collect transient occupancy taxes from their guests.
Additionally, the property owner must provide photographic documentation to Host Compliance to verify conformity with the city’s rules. Not doing so will trigger a city inspection, which will cost an additional $100.
The new rules require that the rented home be the owner’s primary residence, meaning the owner lives there at least 60 consecutive days a year. The owner does not have to be on the property when it is being rented, however.
Additionally, Novato requires rental owners to provide adequate parking, enforce guest occupancy limitations and give advanced notice to neighbors when their homes are rented. In-law apartments, known formally as accessory dwelling units, are not allowed to be listed on short-term rental services.
Properties that don’t register with the city are subject to a fine of $100 per violation with a cap of $1,000. Three or more violations within 24 months can result in a license being revoked.
Some commenters during the council meeting on Tuesday criticized the fees, saying they punish private property owners and instate overburdensome regulations. But Novato residents living near short-term rentals called on the council to do more.
“Trash, traffic and late night activities should be controlled by the city,” Novato resident Mike Hammer wrote to the council this week. “We pay considerable tax dollars to have this type of activity not be addressed by our city leaders. Please take action other than just charge them high fees to continue operating.”
“There has to be a better way to regulate these properties and hold owners accountable — or otherwise ban them from quiet, low-density residential neighborhoods.”
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August 02, 2021 at 01:00AM
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Novato short-term rental owners face new fees - Marin Independent Journal
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