Tourism officials seek tougher city ordinance to control ‘off-the-books’ short-term rentals
Of an estimated 4,000 short-term rental units in Cuenca, only 160 are registered with the municipality, according to Lorena Guillén, director of the Cuenca Tourism Foundation. The estimate follows an Internal Revenue Service report earlier in the week that found that nationally only 9,000 short-term rentals are paying taxes while it estimates that more than 100,000 are “off the books.”
Local and national authorities say that the majority of short-term rental properties in Ecuador are unregistered.
Guillén says she has talked to Mayor Cristian Zamora and several city council members about enacting a new ordinance to increase enforcement and penalties for property owners who do not register with the city and do not pay local and national taxes. “An ordinance is necessary to ensure compliance and increase penalties for violators,” she said, adding that there is “overwhelming” support of the ordinance.
“It is easy to identify the rental units, which include Airbnbs,” Guillén says. “They are advertised online but we need more people to develop lists of violators and to make personal contact with owners if necessary.”
University of Azuay tourism instructor Rafael Ortiz says that a “significant number” of short-term rentals in Cuenca are owned by foreigners. It would be easy, his says, to enforce registration and the payment of fees and taxes with this group. “Under a strengthened rental ordinance, violators would be reported to the immigration office and their visas could be canceled.”
Ortiz adds that property owners who do not follow local and national rules on rental properties and rental income, are a threat to the country’s hotel industry. “They are unfair competition to the hotels and are the reason Ecuador has one of the lowest hotel occupancy rates in Latin America,” he says. “Peru and Colombia, for example, have strict laws that regulate rentals and this guarantees an even playing field in terms of competition.”
