By January 1, 2023, Airbnb and all other short term rental sites will require all Philadelphia hosts to comply with new legislation or their listings will be removed from the platforms. This “crack-down” was set to start in July of 2022, but has since been postponed. An average rental license will no longer be enough to support a listing on a short-term hosting platform. Short-term rental properties are now placed under two classifications: limited lodging and visitor accommodation.
Before even being able to obtain the necessary license for your future short-term rental you must have the necessary zoning permit. In most cases, we have found the rental property in question is not the primary residence (you live there for at least 50% of the year) of the host, instead it is strictly an investment property. The new legislation makes owning a short-term rental difficult for this majority. When the unit is the host’s primary residence you would obtain a limited lodging permit and then the short-term rental license. This permit requires proper proof that the property is your primary residence. The caveat with the limited lodging permit is that it only allows short-term rentals of up to 180 days per year.
On the other hand, if the property is not the host’s primary residence, the only allowable permit is a for Visitor Accommodation. On its face, a visitor accommodation permit is attractive, as it allows the property to be rented akin to a hotel room for 365 days a year. However, this use permit is only granted in certain types of zoning districts. Zoning districts are defined as “an area or areas within the Town limits for which the regulation and requirements governing use.” This means your property has a special designation for what the land can be used for whether it be residential, commercial, industrial, etc.
A visitor accommodation permit can only be granted if your property is in zoning districts: CMX-3, CMX-4, CMX-5, CA-1, CA-2, RMX-1, RMX-2. If your property is not in one of these zoning districts your odds of obtaining a visitor accommodation are very slim. However, your hopes of running your AirBnB have not been effectively destroyed. You can appeal to the Zoning Board of Adjustment to get a variance on your property. Unfortunately, the odds of getting approval for conversion of single family homes into full-time short-term rentals, is extremely low. What we at Philadelphia Zoning are seeing is that it takes a very unique property (that is not zoned appropriately) to get approvals for visitor accommodations permits.
Whether you are getting a new limited lodging, or a visitor accommodation permit, you must register as a Philadelphia Business and pay the city’s Hotel Tax. Like any rental in Philadelphia, you will need to secure a Commercial Activity License, a Philadelphia Tax ID, and the Rental license. The city’s Hotel Tax is 8.5% which will be placed on any fees your guest pays you. However, if you are using Airbnb this will be taken off in the app and you will not have to deal with paying this tax.
While this all may seem overwhelming this process is very achievable and will allow you to begin or continue running your own short-term rental business. It is important to get ahead of the curve on the required licenses for your rental properties. After the January 1st deadline, short-term rentals may be removed from all online hosting platforms if they do not have the proper licensing.
If you are a Philadelphia or Pennsylvania short-term rental owner and need help obtaining the necessary permits and licenses, please reach out to your favorite Pennsylvania / New Jersey real estate firm at Console Matison at Info@ConsoleLegal.com.
