Last September Oregon Public Broadcasting interviewed Ted Sickinger of the Oregonian about the city's efforts to register Portland homeowners who offer their houses for rent through Airbnb. The Oregonian had published Mr. Sickinger's story on the topic earlier that month. On March 16 Mr. Sickinger followed up his September piece with a report that hundreds of short-term rentals listed on Airbnb weren't on the city's registry. Airbnb collects and remits the city's lodging tax for those rentals, but takes the homeowner's word that the homeowner has the required permit. (The story may have spurred some of the unlicensed to action; the city's received 33 applications for short-term rental licenses since it was published.)
The problem goes back nearly to the start of city licensing: as of October 2017 Portland had issued 1,638 active short-term rental permits. At the same time, Airbnb had more than 4,600 active listings in Portland, implying that only about a third of Portland Airbnb hosts were bothering to comply with the law. As of today the city has issued about 1700 active permits and has 600 applications pending.
The city says that it doesn't have the staff or the technology to verify licensing and enforce its short-term rental code, to the ire of neighbors of the unlicensed properties. Isaac believes that the city does have the technology, and would need very little staff time, to make a dent in detecting and combatting the scofflaws. Our spate of local income taxes holds the answer.
In 2014 Portland amended its code to allow Portlanders to rent their primary residence, or rooms of their primary residence, in zones that don't otherwise allow transient lodging. One requirement is that the landlord must occupy the residence at least 9 months of the year. (The "landlord" of a short-term rental may be the property owner, but may instead be a long-term tenant.) It follows that everyone who holds a short-term rental permit outside a commercial zone must be an individual who is a Portland resident, and who's therefore subject to the Portland arts tax, and who therefore files an arts tax return every year with the taxpayer's name, address, and social security number. (Let's overlook the non-filers for a moment.) It also follows that no licensee can own or operate two licensed short-term rentals at different addresses, because only one of them can be the licensee's primary residence for 9 or more months in the year.
The IRS is requiring Airbnb to issue a 1099-K to hosts who receive $5,000 or more from rentals in 2024. Airbnb's site tells its hosts that "if you have multiple Airbnb accounts using the same tax identification number, these transactions will be aggregated to determine if you meet reporting thresholds. You will, however, still be issued separate Form 1099-Ks for each account."
If the city could require or persuade Airbnb to send the city electronic copies of the 1099-Ks that Airbnb issues for properties in Portland, the city could readily cross-reference the addresses and social security numbers in those forms against the addresses of licensed properties (available in the licensing data) and the addresses and social security numbers of the arts tax filers. The city might even catch some folks who have thought of creative ways to avoid the one-to-a-customer goal of the short-term rental licensing. As an added fillip the city could provide that the booking platform for an unlicensed rental is jointly liable with the host for the fines for operating an unlicensed rental . . . and then go out and enforce the code.