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Philly Says It's Finally Cracking Down On Unlicensed Short-Term Rentals, But Proof Is Scant

The Witherspoon, a licensed short-term rental apartment building managed by Sonder, which lists units on platforms like Airbnb and Vrbo.

July 12 was supposed to be a day long awaited by hotel and multifamily operators in Philadelphia.

On that day, the Department of Licenses and Inspections announced it had begun issuing notices of unlicensed short-term rentals to their hosts and booking platforms, giving hosts five business days to either send the proper documentation to platforms or have their listings removed. 

The step was years in the making. But at the end of July, L&I is still missing crucial elements of enforcement and data collection. The city relies on listing platforms like Airbnb and Vrbo to do the work of taking down the listings, but it hasn't established what the punishment would be for a platform or host should an illegal listing remain online more than five days after receiving a notice from L&I, department spokesperson Shemeka Moore told Bisnow.

"The delisting process [has] just begun," Moore said in an email when asked how L&I is tracking which listings are being removed and when. "We will keep track of our requests and compare against listings."

L&I won't have data on how many listings have been removed for at least a month, Moore said. The department hasn't established any estimates or goals for how quickly unlicensed listings will be removed.

Airbnb began sending subpoena notices to hosts found without the proper license in March, the Philadelphia Inquirer reported at the time. Depending on whether or not a host also used the properties they rented out as primary residence, they needed to have either a limited lodging operator's license or a traditional hotel license.

The law establishing the license requirements was passed in June 2021, but its effective date was postponed several times as hosts reported delays in obtaining the proper zoning and permits, the Inquirer reported. The law officially took effect at the start of this year, but the start of enforcement was pushed back once again before L&I gave the green light in July.

By July 12, 458 limited licenses had been issued and 209 hosts had obtained hotel licenses, the Inquirer reported. L&I estimates that between 1,500 and 1,700 short-term rentals listed on platforms like Airbnb and Vrbo are unlicensed, representing nearly 85% of all such units. 

L&I's tracking of rentals will be key to its enforcement, but its count may be way off. Its estimate of around 2,000 total listings is less than half the 5,916 reported with either available dates or booked stays in June by short-term rental research firm AirDNA, which exclusively tracks Airbnb and Vrbo and removes duplicate listings from its dataset, an AirDNA spokesperson told Bisnow.

Moore didn’t share how many notices the city has issued to date for unlicensed rentals.