Coralville continues to look at restricting short-term rentals

Ordinance not ideal for homeowners, convention and visitors bureau

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CORALVILLE — A traveler wanting a bedroom but not a hotel room this weekend in the Corridor could find two dozen choices on the Airbnb website, from a $58-a-night single bed with a dresser and lamp in West Branch to a $2,500-a-night five bedroom house with wet bar, hot tub and Ping-Pong table in North Liberty.

As popularity of such offerings on websites and smartphone apps grows among travelers, so does the desire among officials to regulate the short-term rentals — a gray area between commercial hotels and private homes.

Airbnb became embroiled in a federal lawsuit with its hometown of San Francisco over regulations that city adopted. But many other cities around the nation also have taken a variety of steps to crack down.

In the Corridor, Coralville is in the midst of enacting rules, too.

Proposed regulations that passed 5-0 on the first of three considerations last month by the City Council would establish more hoops for owners to go through before they could offer their locations as short-term rentals. A second consideration of the ordinance is set for Tuesday.

The move comes amid concerns that short-term rentals bring too many cars and too much noise to neighborhoods, particularly during Iowa football weekends.

After hearing a handful of Coralville residents express their concerns, council member Jill Dodds said she supported the ordinance. Dodds said during the meeting that when she travels she usually rents homes instead of hotels — but is polite and peaceful.

“If people aren’t able to be respectful of that situation and of their neighbors, then we need to make a move to make sure that that happens to protect your rights,” Dodds said.

Yet people who list properties on sites like Airbnb say the proposed rules would deprive owners of income and travelers of good choices.

And hotel interests are not fully satisfied with Coralville’s proposed rules, either, because they don’t require guests to pay the same hotel/motel taxes.

The ordinance would require owners to stay at the property with short-term renters — anything less than 90 days — for the entire length of the visit, and also pass a rental inspection.

Ben Breit, a spokesperson for Airbnb, told The Gazette in an email that the company provides an opportunity for homeowners to earn extra income. He said it also helps the Iowa City and Coralville area expand capacity during busy weekends such as University of Iowa game days or graduations.

“We continue to have productive conversations with policy makers across the United States and around the globe to create clear, fair home sharing rules,” he wrote.

Tracy Davis, who has been renting out a Coralville house on Airbnb for a year and a half, said he expects to lose income if the ordinance passes. His property usually goes for $500 to $750 a night — on which he said he’d be willing to pay hotel taxes.

But under the rules, Davis said he might have to move into the vacant house or rent it long-term like did before Airbnb became popular.

Renting a house like his for a short stay fills a gap in the market, Davis said, because staying in a home is an option for groups and families.

“It’s a great opportunity for them to be able to cook out and be together instead of being in three different hotel rooms,” Davis said. “This is just a good outlet for a lot of different situations.”

For Robert Wood, who rents out a bedroom in his condo on Airbnb, said he has never had a bad experience with short-term renters. However, he and his wife wouldn’t go through the trouble of getting a permit to continue posting his extra bedroom on Airbnb.

“Ultimately I guess it comes down to preference, and if you enjoy being in a more homey environment then I guess you’re losing out on that,” Wood said.

Coralville City Administrator Kelly Hayworth said that to qualify for a rental permit, properties usually must have safety features like smoke detectors and fire extinguishers. Annual rental permit fees for most properties in Coralville range from $50 to $99.

Iowa City adopted regulations for bed-and-breakfasts in 1980, and tries to treat other short-term rentals like those offered on Airbnb the same, said Stan Laverman, Iowa City’s senior housing inspector.

The rules say the houses must be owner-occupied, single-family homes, but there is no guarantee the innkeeper is on the property at any given time.

The owners also must provide documentation that they have made steps to pay taxes, although that’s difficult to regulate because the city is unaware of how many nights guests stay.

Laverman said the city often tracks websites like Airbnb and reaches out to educate the homeowners on what’s required.

“It’s kind of an emerging market, so we’re always kind of re-evaluating. At this point we feel we have a decent handle on it,” Laverman said.

At the Iowa City/Coralville Area Convention and Visitors Bureau, President Josh Schamberger said hotel guests in Coralville pay 12 percent of the cost of their hotel room in taxes.

Schamberger said he hears from the bureau’s about 30 hotel partners that they aren’t afraid of the competition — but they want homeowners to charge the same tax.

Coralville officials say they’re not including the provision, though, because it would be virtually impossible to enforce.

While 5 percent is a state tax, Coralville charges the other 7 percent of the hotel/tax. At least half that revenue must go toward facilities like recreational, convention or entertainment venues, city code shows.

Unlike it does with long-term rentals, Cedar Rapids Building Services currently does not have regulations for short-term rentals, a spokeswoman said in an email.

“While we have not had a high level of interest or concern to date, our department will ensure our housing codes adapt to meet any future interest or needs,” Emily A. Muhlbach wrote.

After hearing a handful or Coralville residents express concern about short-term rental homes, especially if they’re used to have large parties during the meeting, council member Jill Dodds said she supported the ordinance. Dodds said when she travels she usually rents homes instead of hotels but she is polite and peaceful.

“If people aren’t able to be respectful of that situation and of their neighbors then we need to make a move to make sure that that happens to protect your rights,” Dodds said.

Walter has heard of similar issues with short-term rentals.

“Part of the concern is that if you’re in a residential area and all the sudden you have an influx in the number of vehicles, people … that does cause some problems for neighbors,” Walter said.

Craig Walter, executive vice president of the Iowa Lodging Association, said the organization hopes rules for short-term rentals will be addressed statewide.

“We’re just in the last year starting to see a number of properties being listed for rent,” he said. “There needs to be probably a more uniform application if at all possible throughout the state.”

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