Agenda Packet 9-23-19 Work Session

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that research conducted for the “numerous studies” he cites was conducted by industry players themselves including Airbnb and Homeaway. He plausibly notes that visitors patronize all manner of local businesses during their stays; a contractor in the Poconos resort region estimates $1 million in spending per year by guests in the area. Even a nondescript location like St. Joseph, Michigan, by the author’s estimation, has 300 workers servicing STRs. Cited by Klettke above, a 2015 study by NUSIPR looked at the economic impact of STRs in San Diego, analyzing data from the 2014-2015 fiscal year. 6,100 STR units (at the FY end) generated $110.3 million in lodging revenue and another $86.4 million in visitor-related spending, with a total economic impact of $285 million and supporting 1,842 jobs. Transient occupancy taxes collected came to over $11 million. Significantly, in light of anti-STR lobbying efforts by the hospitality industry, hotel occupancy rates and revenues do not seem to have been affected. Also cited by Klettke is a study of STRs’ impact on Galveston, TX, this too by a STR trade group. It found that in 2013 STRs created $283 million (out of a visitor-related total of $951.8 million) in economic activity and accounted for 3,100 jobs. Galveston is heavily dependent on tourism: “Tourism-generated tax revenues, not including hotel occupancy tax revenues, accounted for more than half of the City of Galveston’s General Fund budget of $42.9 million in 2013.” Based on the numbers above it could be stated that STRs contributed a bit under a third of that half. Guests at STRs enjoy a cost savings compared to hotel stays, yet the report does not mention an adverse effect on the local hotel industry and the table of indicators (p.3) does not seem to reflect it. A short regional committee document from Nevada presents some raw numbers from Las Vegas, likely from 2015, showing total Airbnb room revenue of $19.5 million, subject to a room tax rate of 12% and yielding $2.3 million to local coffers. Interestingly that city did not have a Community Compact with Airbnb, which the company itself claims would result in more tax revenue collected. In contrast, Josh Bivens and the Economic Policy Institute, focusing specifically on Airbnb, posits that the company’s costs outweigh its benefits. More precisely, “the costs to renters and local jurisdictions likely exceed the benefits to travelers and property owners.” Among his points are that travel and its associated spending will happen whether or not accommodation is with Airbnb, so economic benefits are overstated; travelers don’t save very much; tax payments are less reliable; and externalities damage the quality of life for those near Airbnb locations. He sharpens his political ax in speculating that since most housing wealth is held by whites (p.8) they will disproportionately enrich themselves further. Dan Bucks also disagrees that Airbnb is a good deal for localities and says the agreements between the company and local governments actually result in lower compliance (to below 37 per cent). Part of the reason is that Airbnb is selective about distributing 1099 reports, which reduces compliance by 56 per cent. He is also among the many who criticize the company for its secrecy, the voluntary agreements with states and localities asking as a mask to prevent further inquiry. He gives further examples of tax chicanery by which risk is passed from Airbnb to others, and recommends far more transparency from Airbnb and independent auditing of their accounts. Many of the cited sources allude to negative externalities that can be realized by long-term residents when STRs are prevalent in an area. An article by Nicole Gurran and Peter Phibbs reviews the effects of STRs on Sydney, Australia, a city that experiences not only a heavy influx of tourists, but of younger travelers who would rather sojourn in a “neighborhood” than a hotel. This article is one of the more convincing in positing a link between a high number of STRs and a tighter housing market with higher September 23, 2019, Work Session – Item 3