Denver City Council approves $1,000 fine for companies violating short-term rental rules

After three fruitless years of negotiating with Airbnb — with no end in sight — Denver officials will now fine short-term rental companies $1,000 for each illegal short-term rental transaction, City Council determined Monday.

For years the city’s short-term rental market has been peppered with outdated and unlicensed listings. This can result in fines for unsuspecting property owners who bought properties already listed on short-term rental sites by previous owners who failed to remove the listings.

Denver Department of Excise and License officials have tried negotiating with Airbnb — which controls the vast majority of the city’s short-term rental market — and other companies, asking them to tie each online listing to a rental license number and expiration date. The negotiations have yielded no concrete results, other than the frustration of city officials, so the department proposed the fine.

“If global corporations want to operate in Denver and profit from the hard work of our host community and the features that make Denver a world class city, those global corporations need to shoulder their fair share of the responsibility for compliance,” Eric Escudero, excise and license spokesman, said in an email.

Council approved the proposal unanimously on a consent agenda, signaling a lack of controversy surrounding the issue with city officials.

In short, starting Feb. 1, the rule change will fine booking service providers like Airbnb $1,000 for each violation.

“Denver has been asking the major platforms to prevent bookings at unlicensed short-term rentals since 2017 to help us achieve our compliance goals, but we have not seen any voluntary compliance from these platforms,” Escudero said. “Thus, the law is necessary to ensure such booking service providers are accountable if they are profiting from illegal activity.”

The city currently has about 1,985 legal and active short-term rental listings, Escudero said.

But those are only the legal listings. Because more than 80% of Denver’s listings typically comply with licensing regulations, the total number of properties on rental sites is likely substantially higher.

A representative for Airbnb did not respond to a message seeking comment.

But there is reason to believe Denver’s new regulation will not be well received by the company. Similar moves by cities like New York City, San Francisco and Santa Monica, Calif., were met with litigation. Ultimately, however, the company settled those three lawsuits and agreed to better comply with the cities’ short-term rental laws.

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