Vacation rental official discusses proposed MO legislation

HIDE CAPTION
A screenshot of HomeAway.com for Lake of the Ozarks listings. PHOTO PROVIDED
Friday
Posted Jan 20, 2017 at 12:00 PM
Share
 
According to Curtis, HomeAway is supportive of recently filed bills in the Missouri General Assembly that seek to create "guardrails for regulations" at the state level as basis for creating a standard framework for political subdivisions to regulate the industry in their communities.

By Lake Sunnewsroom@lakesunonline.com
As bills on vacation rentals were filed at the start of the legislative session and in the wake of a private local meeting hosted by Expedia/HomeAway last week and previous controversy surrounding the classification and regulation of vacation rentals at Lake of the Ozarks, a representative from the company went on the record with the Lake Sun to discuss upcoming legislation regarding short-term rentals in Missouri.

HomeAway is an online global vacation rental marketplace, a subsidiary of Expedia. Matt Curtis, HomeAway's senior director of global government affairs, has been with the company nearly six years during a time of rising awareness of the short term rental industry thanks to the internet and the growth of the sharing economy.


According to Curtis, HomeAway is supportive of recently filed bills in the Missouri General Assembly that seek to create "guardrails for regulations" at the state level as basis for creating a standard framework for political subdivisions to regulate the industry in their communities.

"A disconnected patchwork of regulations can encourage activity to go underground. When regulations get so onerous, the activity goes underground, it costs state's money because people aren't paying those taxes. We want to achieve compliance. A standard guardrail still allows municipalities to regulate, but creates a fair regulatory space and optimizes compliance," said Curtis. "That's a concept support by government associations like the U.S. Conference of Mayors and government think tanks."

The main bill on this issue in the Missouri House of Representatives was filed by Rep. Sonya Anderson (R-Springfield) and co-sponsored by Rep. Rocky Miller (R-Lake Ozark). House Bill 608 would not allow political subdivisions to create ordinances prohibiting "residential dwelling rentals," (RDR) defined as "a residential dwelling or any part thereof where four or fewer guest rooms are offered for rent to transient guests" and not including time share units and lodging establishments.

The bill leaves the door open to "reasonable regulations" on these rentals to local political subdivisions within a certain purview. Local entities would be able, if they so choose, to pass regulations for:

- The protection of the public's health and safety (such as fire and building codes, health and sanitation, transportation and traffic control, solid and hazardous wastes and pollution control)

- Local taxes that may be imposed to transient guests, provided that the taxes are of the same rate and on the same tax base as equivalent local taxes applied to lodging establishments

- Imposition or payment of inspection fees


- Posting requirements for licenses, certificates or registrations as well as emergency procedures

- Response time periods for complaints and transient guest concerns

- Nuisances related to RDRs

- Age requirements for transient guests at RDRs

- Off-street parking requirements

- Zoning requirements.

The bill would also require transient guests at RDRs to pay and for the owner to collect and remit any applicable taxes, whether it be a sales tax, hotel tax, occupancy tax, tourism tax or otherwise.


If an owner uses a facilitation platform (HomeAway is not; it is a marketing platform), the facilitation platform could be required to collect and remit those taxes on behalf of the owner.

If an owner uses a marketing platform like HomeAway, this type of platform would be required to:

- Disclose in the terms of service the obligation to pay any applicable taxes to both the guest and the owner

- Require as a term of service that the guest and owner acknowledge the obligation to pay those taxes

- Maintain records of any rentals facilitated for a period of three years for audits requested by a tax administrator

MORE VIDEO: Eldon cheerleaders big and small perform a halftime show for the girls' bas…
The bill would also require facilitation and marketing platforms to require as a term of service that the owner meets all applicable state and local requirements for RDRs before facilitating the RDR to a guest.

The difference between facilitating and marketing platforms is the collection of payment from the guest. Facilitating platforms collects payments and marketing does not.


Curtis also said HomeAway supports the assessment classification of these properties as residential.

According to Franklin, House Bill 632 aims to ensure residential dwelling units are classified as residential properties.

A Missouri Tax Commission opinion interpreted by local county assessors had raised a question over whether these properties should be assessed for local property tax purposes as commercial. The commercial rate is approximately 32 percent as opposed to 19 percent for residential.

Franklin's bill would only add the phrase, "and except that no property used for transient housing that qualifies as residential property under subsection 1 of this section shall be classified, in whole or in part, as anything other than residential property."

Subsection 1 currently defines residential property as "all real property improved by a structure which is used or intended to be used for residential living by human occupants, vacant land in connection with an airport, land used as a golf course, manufactured home parks, bed and breakfast inns in which the owner resides and uses as a primary residence with six or fewer rooms for rent, and time-share units as defined in section 407.600, except to the extent such units are actually rented and subject to sales tax under subdivision (6) of subsection 1 of section 144.020, but residential property shall not include other similar facilities used primarily for transient housing. For the purposes of this section, "transient housing" means all rooms available for rent or lease for which the receipts from the rent or lease of such rooms are subject to state sales tax pursuant to subdivision (6) of subsection 1 of section 144.020".

Curtis commented, "It is residential use, and we're fully supportive of clarifying that."

He hearkened back to the history of short term rentals around the country and internationally.


Curtis sits on the international Board of Vacation Rental Managers Association which is in its 32nd year and recalls traveling with his parents as child in the 1970s and using residential vacation rentals for longer stays of a week or two.

"It's a fascinating topic, but short term rentals have been around a long time," he commented.

The short term residential rentals also have a big economic impact on communities from an estimated $22.2 million annually in even a small town like St. Joseph, Mich. to $283 million impact in Galveston, Texas.

"Vacation rentals have huge economic benefits for a lot of folks who want to travel the sway, and they stay on average longer periods of time, spending more money," said Curtis.

The meeting Jan. 12 at Tan-Tar-A Resort held by HomeAway and Expedia was an invitation-only gathering for its customers, according to Curtis, and are a regular practice for the company to hold around the country in order to discuss industry trends and data with customers who are property owners and property managers.

Rep. Diane Franklin was invited to attend, but was not able to make it in person and phoned in, confirmed Curtis. It was simply a meeting to talk about potential regulations with the people who list homes for rent on their website, he said.

The issue of nightly rentals has consumed the Camden County's Commission office this week as well with unexpected meetings being held with LOZ Vacation Rental Alliance on Tuesday, Tri-County Lodging Association on Wednesday and a formal, noticed meeting on Thursday.


On Tuesday, Commissioners Greg Hasty and Don Williams met with local realtor Stacy Shore and representatives of LOZ Vacation Rental Alliance, a group that opposes any additional taxation or regulations in the residential home rental market. The following day they met with TCLA to discuss their position on the nightly residential rental debate.

The commission is attempting to set up a public forum with those two parties, along with commissioners from Morgan and Miller counties, local realtor associations and Reps. Diane Franklin and Rocky Miller with the purpose of coming up with an agreed upon list of what should be done to present to legislators.

The main issue the commission seems to be struggling with are the potential for new regulations that would be difficult to enforce from the county's perspective and could have dramatic affects on the real estate market at the Lake. The commission is also concerned with certain definitions related to transient housing, lodging and residential housing, as the nightly rental issue is not adequately addressed in the county's unified land use code for its lakefront zoning district.
Both Hasty and Williams agreed there needs to be a mechanism of enforcement to protect neighbors from unruly guests, but whether that's through law enforcement or legislation is still undetermined.
Original post http://www.lakenewsonline.com/news/20170119/vacation-rental-official-discusses-proposed-mo-legislation






Both Hasty and Williams agreed there needs to be a mechanism of enforcement to protect