The city of Madison is buckling down on Airbnb rentals starting May 1 with a new tax regulation. The shared economy, which brings people together through apps such as Airbnb and Uber, has streamlined travel significantly. But cities across the country like Madison have gotten the short end of the stick.
During the last recession, tech startup Airbnb launched, jeopardizing the hotel monopoly with a low-cost, home-sharing model that managed to find the sweet spot between hotel and hostel. The direct client-to-host model left both parties pleased, but the iconoclastic app drew criticism from local governments.
Across California, the company’s state of origination, city ordinances vary and are constantly changing. In Santa Monica, city officials banned short-term rentals to avoid Airbnb complications, according to Southern California Public Radio, while Los Angeles took a subtler approach; it imposed a tax.
With estimated potential tax revenue of $5.8 million, Los Angeles city officials were surprised just five months later with $13 million in tax revenue from the decision, according to SCPR.
The company is not trying to disguise this fact. Last year, it released a report highlighting the tax revenue available to cities who partner with the app. “As we meet with Mayors,” the company […]