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On March 18, the California State Assembly's Local Government Committee and Revenue and Taxation Committee held a joint hearing entitled "Transient Occupancy Taxes and the Home-Sharing Phenomenon." (The joint hearing's agenda and background paper prepared by other legislative staff are available here.)

Our office prepared additional background material concerning the "sharing economy" and short-term rentals for committee members. That material is available here.

Our discussion of the sharing economy and short-term rentals notes the following:

  • Internet use drives societal and economic change. The sharing economy, which has been facilitated by technological efforts of companies like Airbnb and HomeAway, is one such change.
  • Technological change frequently triggers public policy questions.
  • The internet has made it easy to rent residential lodging for a short stay, thereby changing the lodging industry.
  • From a public policy viewpoint, we describe both positive attributes of short-term rentals and concerns.
  • We discuss how these trends could result in further economic changes.


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