Coralville passes short-term rental restrictions

Hotel/motel tax added to ordinance

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CORALVILLE — Homeowners in Coralville now face a much more difficult process to rent out their extra space via websites such as Airbnb.

The City Council on Tuesday unanimously passed an ordinance that says homes rented on a short-term basis — less than 90 days — must pass a rental inspection, be owner-occupied and have owners staying with the renters. The ordinance was amended to include a hotel/motel tax as well.

Officials from the Iowa City/Coralville Area Convention and Visitors Bureau as well as the Iowa Lodging Association had said previously they were concerned about these homeowners not paying the same taxes as hotels. In Coralville, the city charges hotel visitors 7 percent in taxes for up to 30 days during a stay.

“We’ve decided that it would be appropriate to add back in the 7 percent hotel/motel tax for the first 30 days,” City Attorney Kevin Olson said, despite concerns about enforcement difficulties.

During the initial meeting on the ordinance last month, neighbors expressed concern that short-term rentals could become party houses, especially on University of Iowa football game days.

But Airbnb users told The Gazette they’d lose income, and travelers would lose a good housing option if the ordinance passed.

The ordinance passed 4-0, with council member Tom Gill absent from the meeting.

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