CC 07-07-2020 Item No. 8 Municipal Code Amendments to Regulate Short Term Rentals_Written CommunicationsCC 07-07-20
#8,
Municipal Code
Amendments to
Regulate Short Term
Rentals
Written Comments
Expedia Group | 1111 Expedia Group Way West | Seattle WA 98119 | United States
July 6, 2020
City of Cupertino, California
10300 Torre Avenue
Cupertino, CA 95014
RE: Proposed Short-Term Rental Guidelines
Mayor Scharf and Members of the Cupertino City Council
On behalf of Expedia Group, a family of travel brands including vacation rental leader Vrbo, I write to
express concern over Cupertino’s proposed ordinance to regulate short-term rentals.
Expedia Group is proud to work with local jurisdictions across California to support balanced, responsible
short-term rental regulations that meet each community’s needs, and believe that Cupertino is on the
right track. Below are points for your consideration as you work toward balanced, functional regulation of
short-term rentals:
1. Cupertino’s ordinance should harmonize with State-issued guidelines.
On June 5, 2020, Governor Newsom and the Department of Public Health issued guidelines under
which recreational lodging could reopen in California. These guidelines recognize that “hosted
stays,” as defined in the draft ordinance, present unique health and hygiene risk due to the
necessary sharing of space and facilities between STR operators and guests. Meanwhile, vacation
rentals (“unhosted stays” in the ordinance) allow a guest to have control over the space, its
cleanliness, and its occupancy. Vacation rentals will play an important role as Cupertino’s travel
and lodging sector recovers.
The draft ordinance, however, favors “hosted stays” by limiting vacation rentals to 60 unhosted
nights per year but allowing unlimited hosted stays. We strongly encourage Cupertino to update
this provision in light of the state guidelines disfavoring hosted stays and the unique value that
vacation rentals provide with regard to health and safety. We respectfully request that the 60-
night limit on unhosted rentals be removed.
2. Voter approval is required to shift the responsibility for collecting and remitting TOT onto
platforms.
As drafted, Cupertino’s proposed ordinance would require platforms to collect and remit TOT
generated by short-term rental activity in the city. This provision requires voter approval
consistent with Proposition 218, which prohibits a local government from “impos[ing],
extend[ing] or increas[ing] any general tax unless and until that tax is submitted to the electorate
and approved by a majority vote.”
Expedia Group | 1111 Expedia Group Way West | Seattle WA 98119 | United States
The proposed language would newly “impose” tax liabilities and obligations on platforms by
subjecting platforms to tax collection, recordkeeping, enforcement and remittance liabilities for
tax owed as a result of short-term residential occupancies the platform facilitates. While
Cupertino’s TOT is imposed on “transients” for the privilege of occupancy, tax liability is also
imposed on an “operator” if tax is not remitted, whether or not it is collected by the operator
from the guest. The proposed language would effectively treat platforms like “operators” for
purposes of tax collection, recordkeeping and remittance liabilities. For no other purpose would
platforms be considered operators—thus, the proposed amendments “impose” tax liabilities and
obligations that do not exist under current law. This can only be done if voter approval is first
secured.
Thank you for your consideration and for your leadership during this challenging time. I can be reached
for any further questions at rilazaro@expediagroup.com.
Sincerely,
Richard de Sam Lazaro
Regional Government Affairs Manager
Expedia Group