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PRESS RELEASE: Councilmember Kenyan McDuffie Unveils New Legislation to Regulate Short-Term Rental Housing Market to Ensure Housing Stock is Available for District Residents

Councilmember McDuffie, surrounded by affordable housing advocates, speaks at the introduction of the legislation.

For Immediate Release: Tuesday, January 31, 2016

Washington, DC – Today, Councilmember Kenyan R. McDuffie, Chairman of the Committee on Business and Economic Development, announced the introduction of new legislation to establish a workable regulatory framework for short-term rental housing. This legislation, drawing upon successful models from across the country, provides new penalties and increased transparency and reporting requirements to ensure residential neighborhoods are retained for the full-time residents of D.C.

Under current law, hosts are required to obtain a business license designed for more traditional hospitality enterprises. This legislation creates a new type of business license specifically designed for short-term rentals.

Currently, many operators do not bother to obtain licenses.  This is a problem because business licenses a valuable tool to ensure that operators are complying with District regulations designed to protect housing availability, neighborhood quality of life, and health and safety standards.  Under the new bill, hosts will face penalties if they refuse to obtain a business license. More importantly, hosting platforms will be responsible for verifying and posting business license numbers.

Critically, the new short-term rental license category limits hosts to short-term renting only their own primary residence.  This requirement, when it is enforced, will effectively end commercial short-term rental operations that deplete housing and harm neighborhoods.

“Access to affordable housing remains of paramount concern to residents across the District of Columbia. While at the same time, the city lacks a coherent regulatory scheme for short-term rental housing, allowing bad actors to take those units off the housing market. This has been going on long enough: it is time to create a clear, enforceable legal framework so that those who are exploiting the lack of regulations are stopped, and those who want to practice responsible home sharing can come into the light,” said Councilmember and lead sponsor Kenyan McDuffie.

This new legislation would create a commonsense and comprehensive system for enforcement, penalties, transparency and reporting requirements to hold both short-term rental hosts and platforms like Airbnb accountable, while providing the District with the tools needs to regulate this new industry, which can take affordable housing away from D.C. residents and disrupt neighborhood quality of life.

“Rent in the District is among the highest in the country and it didn’t happen by accident. Commercial operators using Airbnb, not homeowners looking to earn a little extra money, have been abusing short-term rentals by gobbling up affordable housing units and converting them into illegal hotels, helping to make DC one of the most expensive places to live.” Commented Valerie Ervin, of the Working Families Party, “The mothers and fathers who work and live here will never have a fair shot at making ends meet until we level the playing field and stop this abuse. This legislation does just that.”

“Last month we stood in front of a rent-controlled apartment building that had been converted into an illegal hotel by a commercial operator in Columbia Heights,” Elizabeth Falcon, the Executive Director of the DC Jobs with Justice said Tuesday. “That commercial operator and others like him are illegally taking away affordable housing our working families badly need. This legislation puts a solid framework in place for short-term rentals that is clear, fair, and protects our communities from illegal commercial operations.”

Key Provisions of the Bill, as introduced:

  • 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 & Publication Required: Every host must maintain a Basic Business License and inform rental platforms of the approved BBL number. The hosting platform is then responsible for publishing and verifying each BBL number.
  • Permanent & Occupied Residence Only For Licenses: The owner/host must be present during the short-term rental stay, and no person can register to rent more than one residential unit, and that unit must be that person’s permanent residence in the District.
  • Vacation rental 15 Night Cap: A resident may offer a short-term rental as a vacation rental, without being present, for a maximum of fifteen (15) nights cumulatively in any calendar year.  There is no cap on home-sharing, including offering private rooms and shared spaces.
  • Violations & Civil Penalties of Short-Term Rental Law: Any person (host) found in violation of this law can be fined no more than $1,000 for the first violation, $4,000 for the second violation, and $7,000 for the third and subsequent violations.
  • Civil Penalties on Online Platform: Any Hosting Platform who violates this law 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.
  • Removal & Notices By Hosting Platform: Hosting platforms are responsible for removing listings without a valid business license and shall provide all relevant requirements for short-term rentals to any person seeking to use their platform.
  • 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.

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