Airbnb’s Impact on the D.C. Housing Market
- Airbnb has roughly 5,000 listings in Washington D.C., two-thirds (66%) of which are likely illegal “entire home/apartment” listings. These illegal listings that make up the majority of their supply are rapidly draining the supply of available and affordable housing from the residential rental market for long-term tenants.
- Nearly 80% of Airbnb’s revenue in D.C. – almost $70 million of the $90 million in total revenue generated in D.C. comes from illegal commercial listings.
- Commercial hosts who rent multiple properties make up roughly 40% of Airbnb’s listings in D.C., showing that commercial operators who do not live in the units they’re renting are a dominant force behind Airbnb.
- As Airbnb takes away residential housing supply, we have seen rents increase as much as 100% above the District-wide average in top Airbnb neighborhoods.
- The majority of Airbnb’s top neighborhoods had 100+ illegal “entire home” listings and 92% of all illegal “entire home” listings were located in the top 20 neighborhoods, showing that Airbnb doesn’t spread the wealth to all D.C. residents, but rather takes away a staggering amount of housing in certain neighborhoods.
Key Legislation Provisions Under Proposed Bill
Current Washington D.C. zoning laws ban the rental of non-owner occupied housing (entire homes) for fewer than 30 days. Home-sharing is legal ONLY if the host is present for the duration of the guest’s stay, and registers for a business license for transient housing and pays transient occupancy tax.
The proposed legislation would strengthen and build on the current zoning law by providing real teeth for the city to crack down on illegal activity and hold lawbreakers accountable through a comprehensive enforcement system that includes tougher fines and clear transparency and reporting requirements for both the hosts and online platforms.
- New short-term rental license category created. A new category of Basic Business License for short-term rentals is created to address the unique challenges of short-term rental businesses.
- Licenses Required: No person shall advertise or host a short-term rental unless he or she maintains a Basic Business License (BBL) with a housing short-term rental endorsement for that unit.
- Publication and Verification of License: Hosts are responsible for informing the hosting platform (such as Airbnb) of the BBL number for their unit. Hosting Platforms are responsible for publishing the BBL number and performing basic verification of the BBL against District records.
- Permanent Residence Only For Licenses: Licenses for short-term rentals will be granted for no more than one residential unit for each host who resides in the District, and only for that person’s permanent residence.
- No Unoccupied “Entire Homes”: Except as provided in the exemption below (15 night cap provision) “vacation rentals,” where the owner/host is not present, are prohibited (same as current D.C. zoning law).
- 15 Night Cap: A resident may offer a short-term rental as a vacation rental for a maximum of fifteen (15) nights cumulatively in any calendar year.
- Administrative Subpoenas: DCRA may issue administrative subpoenas to hosting platforms pursuant to an investigation of suspected violations of D.C. law.
- Violations of Short-Term Rental Law: If upon an investigation by DCRA, it is determined that a violation occurred by either the hosting platform or the rental owner/host, DCRA will issue a cease and desist order. If the violation persists, DCRA will refer that violation to the Attorney General for civil action.
- Civil Penalties On Host: Any person, except for a Hosting Platform, found to have violated this act, shall be liable for a civil penalty of not more than $1,000 for the first violation, $4,000 for the second violation, and $7,000 for the third and subsequent violations. Upon the first violation, DCRA shall order the person to cease and desist from activity that violates this act. The Attorney General and neighboring property owners can bring civil actions for violations of this law.
- Civil Penalties on Online Platform: Any Hosting Platform found to have violated the Hosting Platform requirements of this act shall be liable for a civil penalty of $1,000 for each booking transaction made in violation of this act.
- Fines contribute to creating affordable housing in the District: Fifty percent of fines will go to the General Fund; the other half will be deposited in the Housing Production Trust Fund that is used to provide financial assistance for the production of low-income housing in the District.
- Grace Period: There is a grace period of 120 days after the law becomes effective so that hosts have adequate time to register for their Basic Business License.
- Residential Housing Conversions Prohibited: Currently, the Rental Housing Act prohibits the conversion of rental housing into tourist accommodations. This law extends that prohibition to other types of residential housing, including condominiums.
It’s time to protect D.C.’s affordable housing and to stop letting Airbnb profit at our expense.