Philadelphia just legalized (and will tax!) Airbnb

July 7, 2015, 12:41 PM UTC
Photograph by Kimberly White — Getty Images for Vanity Fair

Airbnb, the ever-popular home-sharing startup, won a legal victory last week when the city of Philadelphia agreed to legalize the service.

Its city council unanimously passed a string of new regulations that legalize short-term rentals but will also tax them. The new regulations include zoning adjustments that make most rentals illegal in residential neighborhoods, as well as an 8% hotel tax, a 180-day cap per year, and a requirement for a city license for rentals lasting more than 30 days.

Founded in 2008, Airbnb lets people rent out spare rooms or an entire unit to guests for a fee. The San Francisco company is reportedly raising $1.5 billion in new funding at a value of more than $25 billion, and is a high-flying fixture on Fortune‘s Unicorn List.

The move’s timing will help relieve some of the space and price pressures that Philadelphia is expected to experience when it hosts the Democratic National Convention next year and Pope Francis in September.

Airbnb is still a contentious subject in many cities, however, including its hometown. After San Francisco passed legislation in February that partially legalized the service, Mayor Ed Lee announced last week the formation of a new six-person office that will handle the registration process for hosts as well as crack down on violators. The city’s Board of Supervisors is also supposed to hear to other proposals later this month that could tighten or increase those limitations.

Airbnb, which maintains that it’s nothing more than a technology company that provides an online marketplace for hosts and guests, started paying hotel taxes in San Francisco last October. It remains a major issue for the city’s hotel industry.

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