Madison Airbnb rentals soar as city cracks down on violators - WKOW 27: Madison, WI Breaking News, Weather and Sports

Madison Airbnb rentals soar as city cracks down on violators

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MADISON (WKOW) -- The popular room-rental site Airbnb brought $2.5 million to Madison this year, but the city is getting little of that money, despite regulations requiring room taxes.

The site released data Monday showing a 164 percent increase in rentals in Wisconsin in 2016, with 2,600 hosts welcoming 105-thousand guests. 19-thousand of those guests visited Madison, second only to Milwaukee with 20-thousand, bringing in $2.1 million. 

Sam and Bruce Crownover open their house on the near west side of Madison to strangers more than 100 nights a year through Airbnb. The couple started renting four years ago as a great way to meet new people and learn about where they come from when visiting Madison.

"It's a really good way to show people who we are, what Madison is like, and it gives them a little extra comfort with the city," Sam Crownover tells 27 News. "It's a service to Madison because I think we're great ambassadors."

It's also become another source of income for the family. The Crownovers committed to the effort in 2013, when the city of Madison passed an ordinance requiring people who host room rentals to become licensed with the city, go through annual health inspections and pay a room tax of nine percent per rental.

The couple paid an initial fee of $600 and the annual inspection fee of $220 and are licensed as a tourist rooming house with the city of Madison. The Crownovers say they pay around $3,000 in taxes a year, including sales tax. But city officials say hundreds of Airbnb hosts are flying under the radar, not following ordinances, hurting those who are following the rules. 

"We've heard complaints from existing hotels and b&b's, making sure that it's a level playing field," says city treasurer Dave Gawenda. "They want to make sure the Airbnb house are paying room tax, just like they have to and being inspected by the health department. We've also heard complaints from neighbors who suspect that someone living next door, down the street is operating an Airbnb-type operation and they want to make sure those people were complying because it can often generate additional traffic in the neighborhood."

Right now, the city is working out details of an agreement to ensure more hosts are paying room taxes. The attorney's office is negotiating with Airbnb to have the site collect room taxes from everyone, then pay the city. That could be settled by early 2017. 

Meanwhile, Gawenda says city officials is also weighing other ways of improving compliance, like hiring a staff member to monitor hosts or working with a contractor. The city has also posted online about the requirements for room rental hosts, in an effort to get the word out. 

The Crownovers hope a level playing field will keep them in the business of showing off Madison to visitors.

"It has been a really good, positive experience for us all the way round and so we keep doing it," says Bruce Crownover.

According to Airbnb, Madison is welcoming more visitors than other cities close in population in the Midwest. St. Paul, Minnesota, which is slightly larger, saw 9,200 guests at $1.5 million. Toledo, Ohio, also larger than Madison, welcomed 2,600 guests who brought in $245-thousand.

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