Senator McGuire’s Online Vacation Rental legislation approved in second Senate committee, heads to Senate floor

Wednesday, May 13, 2015

Sacramento, CA – With a broad show of support, Senator Mike McGuire’s Online Vacation Rental legislation, SB 593 was again approved Wednesday by a second Senate committee with a 4-2 vote from members of the Governance and Finance Committee.

Last month, SB 593 was also approved with a unanimous vote in the Senate Transportation and Housing Committee. After approval today, Senator McGuire’s critical legislation regulating Online Vacation Rental Businesses will now proceed to the Senate floor for a vote.

The premise of SB 593 – the Thriving Communities and Sharing Economy Act – is simple. This bill reinforces local laws already on the books. Where vacation rentals are legal, the bill will assist local jurisdictions in their regulation and collection of tourist taxes. Where vacation rentals are illegal by local ordinance, the bill will prohibit online vacation rental businesses (OVRB’s) from making a rental.

“As with any business that starts up and finds success, there are challenges and I hope we can work together to tackle the issues associated with home sharing and the impacts countless California communities and neighborhoods have witnessed over the last several years as this industry has taken off. This business of home sharing has evolved from its roots of couch surfing – this is a multibillion-dollar business. Our bill is simple: All it does is make online vacation rental businesses follow local laws, just like the rest of us,” Senator McGuire said.

SB 593 – the Thriving Communities and Sharing Economy Act – will empower local control by providing the data required to gather desperately needed funding for parks, road improvements, fire and police services and promote safe neighborhoods. 

“As cities and counties have witnessed, online vacation rental businesses are often about one-way sharing. They share all the benefits of a local community’s services, but they often share none of the responsibilities. Local governments are left to shoulder the burden of enforcement and expense associated with this expanding industry,” Senator McGuire said.

Airbnb’s efforts to try to resolve these issues on a city by city basis have not worked. Even after a deal had been struck, in San Francisco for example, there is no enforcement mechanism in place, which is why the San Francisco Planning Department reported that their newly adopted ordinance isn’t working. In the case of the City of Malibu, the City Council even had to subpoena records from Airbnb, just to kick-start negotiations, which ultimately led to a settlement this week requiring Airbnb to directly collect the tourist tax on behalf of the residents sharing their homes.

“While many vacation rental hosts are simply trying to pay their bills and follow the laws, there are exceptions in every industry. These exceptions are very costly to the communities we represent. We have seen, in many cities, management companies buying up hundreds of apartments or condos in what was a traditional neighborhood and renting them out as lodging units, leading to significant conflict due to congested streets, lack of parking and full time residents having to deal with a new hotel popping up in their neighborhood – not to mention the loss of affordable housing units for working families and seniors,” Senator McGuire said.

SB 593 simply requires Online Vacation Rental Businesses to provide municipalities the same information that 431 cities and 56 counties currently require via their local tourist tax laws: address, number of room nights stayed by the tourist and the room rate. That’s it.

SB 593 has garnered broad support. California State Association of Counties Executive Director Matt Cate said, “The California State Association of Counties (CSAC) greatly appreciates Senator McGuire’s leadership in making sure local communities have the ability to regulate on-line hosting platforms. In particular, we support the Senator’s legislation to ensure cities and counties can collect transient occupancy taxes that fund critical services in our communities.”

Additional Information:

Since the last hearing in Senate Transportation and Housing – which received an 8-0 vote in support, there has been a lot of discussion about the issue of privacy.

  1. Airbnb has already been providing the same non-personal information SB 593 would require in the State of New York, San Francisco, and Portland.
  2. The city of Portland already requires platforms to provide the address information and more to be given to the cities in order to uphold their ordinances.
  3. Airbnb has already stated in a letter to their hosts that they provide this information to the city of San Francisco. This bill seeks to provide the same information to the remaining cities in California that need the information in order to uphold their own ordinances.
  4. Within the terms of service for many platforms including HomeAway, VRBO, and Airbnb, the platforms state that at their discretion, the hosts authorize the platforms to provide information to local governments relating to the collection of Tourist Taxes or administrative proceedings.

As a County Supervisor, Senator McGuire worked to create a system that actually increased the number of vacation rentals in his region.

Testifying in support of SB 593 at Wednesday morning’s Senate hearing were: West Hollywood Mayor Lindsey Horvath, Santa Monica City Councilmember Gleam Davis, Truckee Police Chief Adam McGill and Sonoma County small businesswoman Liza Graves.

Senator Mike McGuire (D-Healdsburg) represents Northern California’s Second Senate District.

For more information or questions, please contact Kerrie Lindecker, Communications Coordinator, at 707-319-3654, or email her at