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Tax on short-term rentals like Airbnb could fund California affordable housing

The Airbnb application on an iPhone in Sacramento on May 30, 2023.
Miguel Gutierrez Jr.
The Airbnb application on an iPhone in Sacramento on May 30, 2023.

California lawmakers are considering a measure this session that would tax short-term rentals to fund affordable housing projects, a proposal that has revived dormant tensions at the state Capitol over the rise of companies like Airbnb and Vrbo and their responsibility for the state’s constrained housing supply.

Senate Bill 584 by state Sen. Monique Limón, a Santa Barbara Democrat, would impose a 15% tax on short-term rentals — the homes and rooms that owners rent out like hotels for 30 days or less at a time — starting in 2025. This statewide surcharge, an addition to the local transient occupancy taxes that most communities already require, could generate an estimated $150 million annually to build or rehabilitate low- and middle-income housing.

“One of the things that I get asked very often by my local cities and counties is: ‘Where is the money to build the housing?’” Limón told CalMatters. “I see this bill really saying everyone has a role to play.”

The Senate passed the measure Wednesday, with the bare minimum of 27 votes needed and sent it to the Assembly.

Alexei covers Gov. Gavin Newsom, the Legislature and California government from Sacramento. He joined CalMatters in January 2022 after previously reporting on the Capitol for The Sacramento Bee and the San Francisco Chronicle, where he broke the story of Newsom's infamous dinner at The French Laundry restaurant. Alexei is a Bay Area native and attended Stanford University. He speaks fluent Spanish.
CalMatters is a nonpartisan, nonprofit journalism venture committed to explaining how California’s state Capitol works and why it matters.