As cities worldwide tighten their grip on short-term rentals, they are losing billions in taxpayer dollars. Recent data shows that in 2023, hosts in these countries contributed approximately $2.4 billion in tourism taxes, with the U.S. generating $2.2 billion and Canada contributing $319 million respectively.
Among the top states in the U.S., Florida, California and Tennessee led the pack, with tax revenue amounting to $387 million, $212 million and $135 million respectively.
Globally, Airbnb Inc. has facilitated the remittance of over $10 billion in tourism-related taxes to governments since 2014.
Don't Miss:
- Investing in real estate just got a whole lot simpler. This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.
- Executives and founders of Uber, Facebook and Apple are bullish on this wellness app that you can co-invest in at $1.15 per share.
- Long overdue disruption in the moving industry is underway. Here’s how to invest in it with just $100.
However, the imposition of stringent regulations on short-term rentals in numerous cities and states is hindering property owners from renting their spaces and is impacting tourism tax revenue.
New York City, for instance, implemented Local Law 18, which took effect on Sept. 5, 2023. The law mandates short-term rental hosts to register with the Mayor’s Office of Special Enforcement (OSE) and prohibits booking service platforms from processing transactions for unregistered short-term rentals.
Before the implementation of these regulations, New York City boasted 56.7 million visitors in 2022, generating $6.2 billion in tax revenue and supporting 344,000 jobs.
Trending: Fortnite’s creator company greenlights partial ownership for investors in the upcoming series.
The city now faces the potential loss of an estimated $1.1 billion in tax revenue, as indicated by survey results reflecting hesitance among potential visitors because of the tightened regulations.
"We're seeing the predictable consequences of these regulations — short-term rental activity is moving underground, forcing visitors to either pay exorbitant hotel prices or turn to unregulated black market accommodations, and travelers have fewer accommodation options in outer boroughs, which means small businesses outside of Manhattan are cut off from the economic benefits of tourism," Airbnb Global Director of Policy Theo Yedinsk said.
Simultaneously, New York City has been grappling with substantial expenditures to support migrants. According to NYC.gov, the city spent $1.45 billion in fiscal 2023 to provide essential services, including shelter and food, for migrants.
The juxtaposition of these figures highlights a critical tension between municipal policies aimed at regulating short-term rentals and the economic consequences thereof.
While regulations may be intended to address housing concerns or maintain community character, they also risk undermining tourism revenues, which are vital for local economies.
Read More:
- This startup coined “eBay for gamers” with a breathtaking track record has opened up a window to invest in its future growth.
- US military-backed AI robotics company announces new equity raise for regular investors, here’s how to buy shares and potentially own a stake.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
