Translate[Archived] Question # 59: Does the City of Alexandria have the ability to enter into voluntary collection agreements or similar arrangements with VRBO and HomeAway?
Question:
Does the City of Alexandria have the ability to enter into voluntary collection agreements or similar arrangements with VRBO and HomeAway? (Vice Mayor Bennett-Parker)
Response:
The Department of Finance has reached out to VRBO and HomeAway, computer platform companies that facilitate short-term residential rentals similar to AirBnB.
Whereas the City of Alexandria was the first jurisdiction in Virginia to enter into a Voluntary Collection Agreement (VCA) with Airbnb (effective April 2018), VRBO/HomeAway report that they do not enter into such agreements with all localities. Their preference is to only work with larger jurisdictions. Staff is not aware of any VRBO/HomeAway collection agreements in other Virginia jurisdictions at this time.
Staff is continuing discussions with their offices in Seattle and Chicago and provided copies of the City’s Transient Lodging ordinance. While no decisions have been made, staff has had positive discussions with them and is cautiously optimistic that they may agree to work with the City in the future. There are limited rentals occurring during the present health crisis, VRBO/HomeAway indicate that there are approximately 65 such listings in the City. Staff have already identified approximately 39 of these through its third-party data analytics contract with Host Compliance. A VCA with VRBO/HomeAway could generate between $40,000 to $80,000 annually in Transient Lodging tax revenue under normal circumstances. Staff will continue to pursue establishing this VCA.
For comparison, under the Airbnb VCA in FY 2020, the City collected $385,223 in Transient Lodging taxes through February, an increase of 67% over the same time in the prior year. Rentals. Collections are, of course, expected to dwindle for the remainder of the fiscal year due COVID-19.
Airbnb has the greatest market share in the City for rental platforms, representing 99% of the 454 known rentals. The 64 other potential rentals currently being researched by staff, would drop Airbnb’s market percentage to 87%.