It’s been two years since Philly decided to create a license for Airbnb rentals, over a year since we first looked at Philly’s Airbnb rules in this space. The regulations for the Airbnb license are tricky, but with determination and focus we worked them out, then shared our findings with you in an easy-to-use guide – problem solved! Let’s look at the result of our work… Oh. Oh no.
Live look at Airbnb’s enforcement action in Philadelphia
Okay, in the last month the City of Philadelphia has directed Airbnb and Vrbo to stop listing any stays (called short-term rentals) without a Philadelphia license. This is a problem, because in the last two years, I guess only 10-15% of Airbnb/Vrbo operators got a license? People! Come on!
Alright, alright: I understand it’s not that easy to get a short-term rental license in Philly. I also understand that not every property is zoned for short-term rental under City laws. So here’s a quick reminder of the steps to a Philadelphia Airbnb license:
Make sure your Philly Airbnb or Vrbo is located in the right zoning district
Each piece of land in Philly is assigned to a zoning district. That zoning district has rules telling you how you can and can’t use your parcel. It might even have an overlay district with more rules about what you can and can’t do with the land.
Even before the Philadelphia Airbnb license was created (again, back in 2021!), it was still illegal to use a unit as an Airbnb if the property’s zoning didn’t allow that activity. You must register the use of the place before you start renting it out on Vrbo or Booking.com or Arbnb.
There are two types of zoning involved here:
Zoning that allows you to use your own home as a Philly Airbnb
This is the easiest way to get a license for short-term rental: loan out your own personal space (or part of it) on Airbnb, Booking.com, or whatever else. The City of Philadelphia calls this “Limited Lodging,” and they’ll let you do it anywhere you actually live:* you can rent out an apartment, for example, only if you live there. You can’t get that apartment zoned for Limited Lodging if you own it but don’t live in it.
*Okay, it’s Philly: not truly anywhere; see below…
There’s a catch for renters: if you want to use your rented apartment as a Vrbo, you still need approval from your landlord. Philly wants to see your damn lease (really).
Oh, and if you’re a renter, you can’t get a zoning permit for Limited Lodging at all in the Tenth Councilmanic District (the far Northeast). In this area, the primary resident must also own the property to qualify for an Airbnb license. No renters posting on Vrbo in the Tenth! (We don’t know why; maybe Brian O’Neil just doesn’t think renters can be trusted.)
Zoning that allows you to use any property you own or rent, even if you don’t live there, as a Philly Airbnb
If you want to list a space on Airbnb but you don’t live there, you have one other option: register the place as a hotel!
That sounds wild, but this is the rule Philly developed for Airbnbs outside of someone’s own home: they are treated, for zoning purposes, as hotels. Once you have a permit for use as a hotel, you can go ahead and list the place on Vrbo and all the other short-term rental platforms.
This is probably the sticking point for a lot of Airbnb operators in Philadelphia: it’s likely that most of the units at risk of removal from the platform are located in residentially-zoned areas where hotels aren’t allowed; at least not without a variance (which can take up to a year). The City of Philadelphia is simply barring a lot of people from operating an Airbnb on their property or in a rented apartment, and barring them on purpose.
If you operate an Airbnb, this all probably sounds outrageous; but the City has received a lot of complaints about Airbnbs over the years and is attempting to respond to them. If you want them to scale back these new laws, you need to take it up with City Council! Pressure on Council created these regulations, and it might eventually ease them.
Set up your Philly Airbnb as a legal business
Whether you’re going to offer limited lodging or a “hotel” Airbnb, you need to pay taxes on the operation. This means you need to have a Commercial Activity License and a Philadelphia Tax ID on file with the City of Philadelphia. You also must file the Net Profits Tax, the Business Income and Receipts tax, and – if you have employees – the notorious Wage Tax.
Now, the City of Philadelphia also instituted a Hotel Tax for any lodging outside typical residential rental. If you use Airbnb, Vrbo, or another major platform, you do not need to think twice about this: the platform will pay the tax on all the short-term rentals in Philly. However, if you want to work outside of Airbnb, by offering short-term rentals through your own app or website, you have to make sure to collect the Hotel Tax! Check out the Hotel Tax reference page on the City’s website for more information.
Get the correct license for your Philly Airbnb
When we at Permit Philly casually mention the “Airbnb license,” we really mean two different licenses, which match the zoning categories noted above: you can get a license for Airbnb in your own residence, or you can get a different license to rent rooms as a hotel. The main thing to know is that just because you have the right zoning and the proper business licenses doesn’t mean you’re finished: you also need to apply for the license itself!
(The second thing to know: if you are operating a “hotel,” you need to meet the typical requirements of a commercial building – even in your own home. Make sure you have proper occupancy documents matching the zoning before you apply for a hotel license!)
And if you need help with the Philadelphia Airbnb License…
Please feel free to contact Permit Philly! You can give us a call at (267)744-4200 or send us a message at firstname.lastname@example.org. We can obtain a Philly Airbnb license for your own residence in no time, and help you figure out whether a hotel license is feasible for your property – and we get that license for you, too!