Mar 4, 2024 - News

Philadelphia's illegal short-term rental problem

Illustration of a shady-looking house key wearing a trench coat and fedora, surrounded by fog.

Illustration: Maura Losch/Axios

Hundreds of unlicensed short-term rentals continue operating a year after the city put in place tougher regulations.

Why it matters: While these rentals can be significant sources of income, some who live nearby see them as nuisances and magnets for loud parties.

State of play: The city estimates about 1,300 unlicensed short-term rental properties in Philly, spokesperson Shemeka Moore tells Axios.

  • That's down from as many as 1,700 in July 2023 as the city began its crackdown.

Threat level: Few scofflaws have faced fines.

  • The city has issued only five violations to short-term rental operators under the new rules, Moore says.

Catch up quick: The updated regulations kicked in at the start of last year and built on rules in place since 2015 that were widely considered ineffective.

The new rules changed hosts' zoning and licensing requirements while online platforms, like Airbnb and Vrbo, can remove listings when the city flags them.

  • Loud parties that disturbed neighbors partly drove the updates.

Zoom in: The city has nearly 650 active limited lodging licenses — required for short-term rental hosts whose property or units are their primary residence, per the city's online database.

  • Some 70 rental licenses with hotel designations are active for hosts whose units aren't their primary residences. While some include traditional hotels with hundreds of units, most are for properties with fewer than 20.
  • A host with a single license can potentially have several listable units.

The intrigue: Philly will need all the hotel space it can muster before 2026 when the World Cup, the 250th anniversary of America's independence and the MLB All-Star Game come to town.

What they're saying: Steve Patterson, who manages the short-term rental company Ur Home in Philly, tells Axios the city's new rules are forcing him out of business.

  • He now operates 14 units, down from more than 100 before the new rules began. He says the rentals are not profitable and he's cut staff.
  • "It's been disastrous for the locals that rely on Airbnb-style business for employment," he said.
  • Airbnb and Vrbo declined to comment.

The other side: Moore said no new policy changes are coming for short-term rentals this year.

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