Spring in D.C. is in bloom and, as tourists flock to see the city at the peak of its beauty, local Airbnb hosts are encountering some significant changes to their business.
On November 13, 2018, The D.C. Council voted without opposition to “institute some of the most stringent home-sharing regulations in the nation,” according to the Washington Business Journal. Today, the regulations impact the significant supplemental income that Airbnb hosts could make during the cherry blossom festivities.
The Short Term Regulation Act adds significant regulations to the properties hosts are allowed to rent to their guests. It restricts short-term rentals to only a homeowner’s primary residence, enforces a 90-day cap on rentals when an owner isn’t present, and prevents the short-term rentals of second homes entirely.
“Affordable housing advocates agree with the Council’s unanimous vote that occurred last year,” states Ward 5 D.C. Councilmember Kenyan McDuffie who originally introduced the idea for home sharing regulations. “There have been too many loopholes for too long that have put the city’s residents in a sticky situation. We needed to legitimize this process, keep homes and living spaces on the market and prevent neighborhood disruptions to the best of our ability.”
With this new bill in place, 2019 has been marked by American lawmakers clambering to gain some control over Airbnb’s mighty growing empire. The app that makes use of “sharing spaces” has garnered a large following since its launch in 2008.
App users have access to a global community that consists of 2.9 million hosts and 150 million users located in 81,000 cities around the world, according to recently collected statistics provided by Digital Marketing Ramblings. With an average of about 14,000 new hosts joining the ranks each month, the legality of renting out one’s extra space with the help of Airbnb has grown more complex than ever.
Tourist destinations like San Francisco, Chicago, D.C. and New York City “[implemented] measures to limit the types of property that can be rented through Airbnb,” states Washington Examiner. The article notes the restrictions placed on the length of guest stays as well as the requirement for hosts to disclose their rental information to their local governments.
In cities like D.C. where the average cost for an overnight stay at a hotel is $270 according to 2017 statistics, hotel stays are often viewed as costly for guests, so Airbnb’s short-term rental success has proven to be a threat to the hotel industry. During times of peak tourism, the correlation between spiked hotel room prices and increased Airbnb listings available at discounted prices is significant, according to The Case of Airbnb. The hotel industry has begun to take a serious look at their methods of renting space and even began to incorporate more personable elements similar to those provided by Airbnb to attract guests.
Outside of addressing internal factors, the American Hotel and Lodging Association launched an investigation of Airbnb’s impact in 2016. The hotel industry took a stance on a local, state and federal level to begin to “reign in” Airbnb so that the playing field would be more equal. The investigation highlighted the major differences that led to the passing of the bill in 2018: “Airbnb hosts do not collect hotel taxes or [follow the same safety and security regulations as hotel operators.]”
Those that support the passing of legislation to regulate D.C.’s Airbnb, including the lodging industry, hotel industry unions, and local lawmakers argue that these measures are being taken to preserve the quality of life for D.C. residents. Amidst scattered claims that the rental services introduce more noise violations and complaints, some go as far as to claim some homeowners are, essentially, operating illegal hotels.
“What we’re doing isn’t illegal,” laughs Milly Crofton, Washington D.C. Airbnb Superhost since 2015. “I follow the rules, make sure my guests conduct themselves appropriately, and I always charge a fair price. In fact, [every host I know] follows the rules to the best of their ability to protect our guests, earnings and reviews. I’m not sure where the crime in that is.”
For years, Crofton, who lives with her family of four in an elegant three-story home, has used the extra rooms in her house to create lavish, private guest suites that collect an admirable $4,500 each month in supplement income. “I work from home, so I treat this like my second job. While I don’t feel like these new laws will change how I personally operate, I know that for a lot of other hosts, they will.”
Feeling the impact of the Short Term Regulation Act is host Sivi Barot, a young single woman whose dreams of quickly paying off her student loans once seemed possible with Airbnb. As the owner of two units in an upscale D.C. apartment complex located on Blair Road, she was hopeful that she could treat her spaces as separate Airbnb rental rooms until she was debt free. When she heard of the new regulations, this plan that could have brought her an average of about $3500 a month in supplemental income came to a screeching halt.
“Cherry Blossom Festival season could’ve brought in so many guests,” stated Sivi with a sigh. “I’ve grown to love hosting and helping my guests experience D.C. to the fullest. I’m still struggling to believe that I have to start my entire career with Airbnb over from scratch.”
Sivi has been a Superhost for only a year. Now that she is unable to rent her properties for short term visits, her plans for the future are unsure. “No matter what,” she said when asked if she would continue her involvement with Airbnb, “I plan to host in the future. I just need to come up with a new way to do so.”
Charles Allen, Councilmember for Ward 6 in Washington, D.C., was the first to suggest amending the bill to provide homeowners with the opportunity to seek exemptions to the rigid regulations.
“Our goal isn’t to stifle the use of Airbnb altogether,” he stated when asked why he supported alleviating the strict regulations. “The Council is fully aware of the role Airbnb has taken in the lives and finances of so many D.C. residents. We want to do what’s best for the majority, while also keeping in mind the interests of the lodging industry.”
While Airbnb didn’t respond when asked for an interview, their statement released on November 13, 2018, to WUSA9 states “The D.C. Council’s reckless vote [is] the latest example of the misleading tactics used to pass fiscally irresponsible home sharing policy. This Council [deprived] D.C. residents of $64 million in supplemental income annually and [is sending] D.C. taxpayers a bill for $104 million. While our host community [hoped] for a better solution, we remain committed to ensuring home sharing is protected in our nation’s capital.”
As she places a handwritten note in a seasonal fruit basket for her next guests, Crofton explains that she and the majority of Airbnb hosts in D.C. are generally compliant when it comes to the regulations.
In looking forward to the future of lodging and renting spaces, she’s confident that change will come again that will be in her favor. “Hotels won’t be everyone’s first choice forever. Just look at what D.C. hotels charge for parking! Now, that should be illegal.”