Looking to crackdown on those circumventing city taxes, the Madison City Council approved an agreement Tuesday with Airbnb to collect room taxes on short-term lodgings offered on the website.
Members also set a goal of communitywide 100 percent renewable energy and net-zero carbon emissions, while directing $250,000 to develop a plan on how to make that possible within the city’s operations.
Council members unanimously approved a plan that will have Airbnb voluntarily collect a 9 percent tax on residences or rooms rented out by city residents, commonly known as hosts. According to the city, there are 500 to 600 private units available for rent in Madison, including about 400 on the Airbnb website.
The city estimates the agreement could bring in around $183,000 in tax revenue. The San Francisco-based company would take the tax out of what renters pay for lodgings before hosts are paid.
According to the city, between 15 and 20 hosts have been registered with the city to pay room taxes.
Airbnb spokesman Ben Breit said hosts will be informed before collection begins, which could start as early as May 1.
Most of the focus of Tuesday’s meeting was on the city’s ambitious energy goal as dozens of supporters showed up.
“City government can control how it operates, and this resolution empowers city staff to develop a plan, including target dates and benchmarks, for achieving 100 percent renewable net-zero carbon goals,” said Sustainable Madison Committee chairman Raj Shukla. “The vote you cast tonight is the culmination of nine months of community discourse and community leadership, but it’s really just the beginning.”
The $250,000 will come from $750,000 allocated for sustainability improvements in the 2017 budget. The city will submit a request for consultants to develop the plan, and Shukla said he hopes a consultant will be selected by June or July.
The plan is set to be presented to the council by January 2018.
In other business, an additional $6 million to construct the replacement of the Government East parking garage was approved.
Members unanimously approved the funds after the $39.7 million initially budgeted for the project came up $10 million short. City staff closed the gap to $6 million by reducing the size from 600 parking stalls to 560.
The larger-than-expected estimate follows two bids for the renovation of the Madison Municipal Building that were significantly higher than what city officials had planned to spend.
“There are more big projects coming down the pipeline later this year, and if our construction estimates continue to be well under the actual bids, we’re going to have some serious problems through the rest of this year with our capital budget,” said Ald. Mark Clear, 19th District.
Two tax incremental finance (TIF) loans for business projects also received approval by the council.
Epicentre, a biotechnology company, will receive a $1.9 million loan to help the construction of a 132,000-square-foot building within the University Research Park at 6102 Odana Road. A $913,000 TIF loan was also granted to help Landmark Oaks Development build 109,000 square feet of commercial space at 2921 Landmark Place.
Council members met for the last time before Wisconsin’s spring election on April 4. Five of the 20 seats on the council are contested.
One new member is guaranteed by the next council meeting on April 18 as Ald. Tim Gruber, who filled in to represent the 11th District after former Ald. Chris Schmidt resigned last year, is not seeking the post.