The DC Council advanced a bill yesterday that would dramatically curtail (sort of, GM will get to that) the ability of homeowners to rent out their properties on a short term basis on sites such as Airbnb or VRBO.
The bill, which is a modified version of an earlier bill, makes a distinction between the first and second (or third, etc.) home of the homeowner. With the first home, a homeowner can rent it out on a short term basis an unlimited amount of times, if the owner is present. This covers what Airbnb has always emphasized as their core use: homeowners essentially having paid guests into their home. (This isn’t really how most people use the service though). These owners can also rent out their home while they are absent up to 90 nights a year.
The bill is far less permissive for second homes. The bill would ban people from renting out second homes on a short term basis, period. This essentially prohibits investors from using DC properties for Airbnb.
GM has written about Airbnb and how it impacts Georgetown several times before. When he first looked at it in 2014, there appeared to be about 18 properties in Georgetown available for rent on Airbnb. Later that year he first noticed that investors appeared to be buying properties and converting them to Airbnbs. When he counted the available properties in 2016, it looked like they had jumped to 30 properties.
And now if you go on Airbnb, it appears that there as many as 70 Georgetown properties available, if not more. And the listings can seem to clump. For instance, in and around the intersection of 33rd and Q there are ten different listings. At least three of the nine homes on the south side of Q St. just west of Wisconsin are exclusively Airbnb properties.
One of them, the home at 3256 Q St., used to be rented out on an annual basis. Starting about four years ago, it was shifted to exclusively an Airbnb house. It’s owned by Wavely Veney, but Airbnb says the owner is “Cliff“. Another house on the same block is also “owned” by Cliff (it’s actually owned by yet another person). Clearly Cliff is just a property manager. Airbnb doesn’t list how many properties Cliff manages, but his reviews suggest he manages properties around the city.
The bill would make this arrangement illegal. But not really. They’re already illegal. Even if you stay in the property, to rent out your place for short periods to 1-2 people at a time, it’s already the case that you are required to have a permit as a Bed and Breakfast. If you host more than two, you need a general purpose business license. If this property is in a residential zone (which includes the vast majority of homes) zoning requires you to get a special exception to even get these licenses. If you don’t live in the property, it’s barred under zoning and you need a variance. Nobody is getting these licenses, therefore almost all Airbnbs are illegal already.
Zoning laws are structured to essentially subsidize residents over businesses or visitors. Most real estate in DC is zoned residential. What this means in practice is that people who want to buy this property to live in only have to compete against other people who want to live in it. They don’t have to compete against businesses that want to use the property for commercial purposes or visitors who would happily spend a ton of money to use that real estate for a couple days. Airbnb essentially arbitrages on this structure by gaining control over some of these properties and letting the visitors outbid long term residents for the property.
Airbnb likes to say bills like the Council’s is an attack on people who are just trying to make ends meet by renting out portions of their house. Of course the bill doesn’t actually limit that (but again, unenforced zoning laws probably do). Airbnb swiftly elides these types of homeowners with those who own multiple properties, like those who own the Q St. homes. This is, of course, hugely dishonest. If somebody owns multiple homes in DC and is struggling to make ends meet, clearly what they should do is sell one of those homes! Or rent it out long term!
That home at 3256 Q St. is right around the corner from GM’s house. It used to be occupied by some slightly rowdy groups. But it was occupied at least. Now it sits empty 80% of the time. The sidewalks don’t get shoveled. Nobody’s home on Halloween. Nobody waters the tree out front. It’s just an occasional cycle of families in for graduation or parents’ weekend. The reason zoning laws subsidize residents is that it makes the city a more pleasant place to be a resident. This bill is a step towards restoring that.