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As vote nears, coalitions war over proposed rules for short-term rentals in D.C.

Supporters and opponents of the bill are gearing up for the vote with a bevy of arguments and statistics

Houses in the District
David Harmantas/Shutterstock

Short-term rentals available online became more popular in the District after 2009, when Airbnb launched here. Now, almost a decade later, D.C. lawmakers are poised to formally regulate the practice through legislation that would limit the number of units that can be legally rented on a short-term basis. A vote on the measure is set to take place on Tuesday.

The legislation follows action taken by other cities, including New York, San Francisco, and Seattle, to establish rules for short-term rentals. It would ban property owners from renting out homes other than their primary residences and restrict vacation rentals—those in which the host is absent from the property—to a maximum 90 days a year. The new proposal, first reported by the Washington Post last week, updates a bill that was introduced in early 2017.

Since its inception, the legislation has been controversial. Dozens of witnesses testified at a public hearing on the bill, in April 2017, that lasted for hours. Both proponents and critics of the measure have waged significant advertising campaigns around it while building diverse coalitions. The supporters include faith leaders, affordable housing advocates, and much of the local hotel industry, including union members; the opponents include short-term rental booking platforms like Airbnb and VRBO, travel and realtor groups, and some homeowners.

The bill, which could be amended on Tuesday, represents the first attempt by D.C. officials to comprehensively regulate short-term rentals. Nearby Arlington, Fairfax, and Montgomery counties passed laws on the practice over the past two years. In addition to the restrictions on secondary-home and vacation rentals, the D.C. legislation would require hosts to obtain licenses from the District as well as smoke detectors and liability insurance for their units. It would also implement civil penalties and prohibit tenants from operating short-term rentals.

At a press conference on Monday, D.C. Council Chairman Phil Mendelson, who revised the the initial proposal by Ward 5 Councilmember Kenyan McDuffie, said he expected “healthy debate” over the bill on Tuesday. He said the legislation is intended to reign in “commercial activity”—in essence, illegal unlicensed hotels—while D.C. sees an affordable housing crisis.

He added that the 90-day rule for whole-home rentals is “fairly common” across U.S. cities, and that the bill seeks to balance property owners’ rights to generate income via short-term rentals with larger concerns. “We’re trying to deal with the adverse consequences of having transient guest traffic in our residential neighborhoods,” Mendelson noted. “And what we’re saying with this we’re OK with the property owner present [or] home-sharing.”

Some neighborhood groups are hoping for the bill’s passage. Graylin Presbury, who serves as president of the D.C. Federation of Civic Associations, says in a letter to the D.C. Council that “out-of-state commercial interests” are scooping up real estate throughout the District and listing illegal hotel units on short-term rental platforms. “And, they have no intention of renting to D.C. residents or paying D.C. taxes,” he writes, contending that the activity raises rental prices. “It’s unfair to those with a genuine desire to participate in legal home sharing.”

But critics say the bill, in its current form, goes too far. San Francisco-based Airbnb says the proposal is “overly strict,” and argues that there is a “unique need for short-term housing” in a city like D.C. that annually draws thousands of temporary workers, such as interns, nurses, professors, and foreign-service officers. The company also criticizes the proposed penalties (ranging from $500 to $6,000 per violation) and the record-keeping rules in the legislation, claiming that the effort has been peddled by the hotel industry, as documented elsewhere.

Moreover, Airbnb says the short-term rental units available on its platform are not seriously affecting D.C.’s stock of affordable housing. It says “entire homes” shared for more than 182 nights a year constitute “only 0.22 percent” of all D.C.’s units, or less than 700 residences. On Monday, the company released figures suggesting that the current bill could “rob” hosts in majority-minority zip codes of between $18 million and $26 million in extra income each year, based on data for hosts with multiple listings and at least 90 days of annual bookings.

The legislation’s proponents have marshaled their own numbers. Led in part by the It’s Time, D.C. umbrella group—which includes labor union Unite Here Local 25, the D.C. Federation of Civic Associations, and American Family Voices—they say the bill would free up thousands of housing units now used for short-term rentals to be used for longer-term leases instead.

The group released a poll on Monday finding that four in five voters in D.C. agreed that the short-term rental market “needs some type of regulation.” Roughly the same share agreed that property owners “who profit by renting out apartments or houses should be subject to the same safety and fire regulations as a hotel” as well as “zoning, health, and safety rules.”

Eighty-six percent of respondents said they “overall” support the pending bill, which the poll framed as an endeavor “to protect the rights of city residents to rent out their primary residence as a short-term rental but crack down on commercial investors buying up homes to covert to short-term rentals.” Conducted online by Axis Research, the poll surveyed “400 registered voters living in Washington, D.C.” over three days in September. (In a statement, Airbnb contested the results as “hotel-funded,” and plugged the benefits of home-sharing.)

Still, the proposal worries some residents. Jackie Havard, an Airbnb host identified by the company whose family lists their second home, in Hill East, both on Airbnb and VRBO, says her family turned to short-term rentals after the previous long-term tenants moved out and new ones did not materialize. Havard says the home, which has two bedrooms and sleeps five people, lets her family “make ends meet.” It bankrolls the home’s mortgage, its utilities, and her medical bills, with a few hundred dollars left over each month as additional income.

“Taking my small business away is not going to solve affordable housing,” she says. “It’s so easy to say that and say it’s supply and demand and end it there and feel like you’ve won the argument. But that’s just not the case. Affordable housing is much more complicated.” Havard notes that her family’s second home is usually rented out for between 250 and 300 days a year and the average price is about $200 a day. “It fluctuates. April is a huge month.”

Tech industry groups have joined the chorus of concern about the legislation. In a letter to Mendelson—the Council chairman—Net Choice, Travel Tech, the Internet Association, and the Consumer Tech Association say the ban on secondary-home short-term rentals should be removed. “Vacation and short-term rental platforms including Airbnb, HomeAway, and VRBO both enhance consumer choice and enable economic opportunity for DC residents and neighborhoods,” they write, warning of harms to the local economy. “Denying families affordable, convenient lodging options will unnecessarily and arbitrarily limit tourism.”

In describing the latest version of the bill, a D.C. Council committee reports that on a given day, there are about 1,000 short-term rental units in the District being advertised via online booking services. The committee also reports that there are an estimated 9,000 total short-term rentals in D.C., which “directly compete with over 31,000 hotel rooms.” It recommends that the D.C. Zoning Commission should update its regulations “to better manage both the demand and subsequent proliferation of short term rentals in [the city’s] residential zones.”

Assuming the Council passes the measure on first reading on Tuesday, it would have to do so again in the coming weeks thanks to a quirk of Council procedure. Then, Mayor Muriel Bowser would get to review the bill before it is sent to Congress, as is standard for District laws. On Monday, Bowser’s office appeared to voice concerns with the current bill, saying not only residents but visitors benefit from sharing-economy platforms, including Airbnb.

“The Mayor wants to ensure that any regulations put in place are about building a more equitable and inclusive D.C. — not about locking Washingtonians out of emerging and profitable markets,” explained LaToya Foster, a spokeswoman for Bowser, in a statement.

The District’s Department of Consumer and Regulatory Affairs (DCRA) would be responsible for enforcing the law. DCRA currently does not issue distinct licenses for short-term rentals.

This post has been updated with comment from Presbury and the tech industry groups.