The apartment building in Adams Morgan, which until July was rent-controlled, was meant for District residents. Instead, records show that hundreds of tourists and vacationers have been booking one- and two-night stays in the building since late 2015 using short-term rental sites such as Airbnb.
As of Monday morning, at least eight units in the 12-unit building at 2388 Champlain St. NW were listed on Airbnb and similar other sites, with nightly rates ranging from $65 to $155.
“Just what my friends and I needed for a one night stay,” a reviewer posted on Airbnb.
“Exactly as described and the location is superb!” another said.
The building, also called the Peary House, serves as an example of the type of commercial enterprises lawmakers say they’re hoping to prohibit with new rules being reviewed by the D.C. Council. Under the proposed legislation, property owners could rent out one unit at a time, and only in their permanent homes. A hearing is set for April 26.
An estimated 37 percent of D.C. listings offered on Airbnb are done so by commercial owners with multiple listings, according to a report expected to be released Tuesday by the Working Families Party, which receives funding from advocacy groups and labor unions, including one that represents hotel workers.
“We believe that the commercialization of rental units in the District of Columbia is causing real problems for working families being able to afford the rising cost of rentals,” said Valerie Ervin, senior adviser to the party.
Crystal Davis, a spokeswoman for Airbnb, said the report was full of “false claims.”
The data in the report “misrepresent the thousands of D.C. residents who use home sharing to pay their mortgage and support their families,” Davis said in an email. “We remain committed to working with lawmakers and community groups to develop clear, fair home sharing rules.”
Public records show that the building at 2388 Champlain St. NW is owned by Lock 7 Development, and that it was bought in June 2015 for $2.05 million. Executives of District-based Lock 7 did not respond to requests for comment.
The building’s management company, Thos. D. Walsh, applied for a rent-control exemption on July 20, according to public records. A spokeswoman for the D.C. Rental Accomomodations Division confirmed that the property was subject to rent-control laws before that.
Apartments in the building were listed on Airbnb beginning in November 2015.
Zoning laws prohibit the conversion of residential housing units into transient rentals, said Joel Cohn, legislative director of the D.C. Office of the Tenant Advocate. But, he said, it was not clear how short of a stay would be considered “transient.” Some parts of the law, he said, require people to reside in a home for at least 90 consecutive days before they are considered “permanent” tenants.
“Transience is prohibited by the law, but we are finding that there are different standards for the term ‘transient,’ ” Cohn said. “Airbnb is a new kind of reality that the government is trying to feel its way through.”
Even so, property owners can easily make twice as much money through short-term rentals as they can by finding permanent tenants. In the District’s top 20 neighborhoods for Airbnb use, the average monthly rent was $2,752, according to the Working Families Party report, which used data from the online real estate company Zillow. The average Airbnb listing, meanwhile, could bring up to $5,711 a month, according to the report.
“When you look at how much money somebody could make by turning a rental unit — particularly something that’s rent-controlled, where the city is trying to keep rent low — into what is essentially a hotel room, you see there’s a powerful incentive there,” said Ed Lazere, executive director of the D.C. Fiscal Policy Institute, which helped oversee the report. “It’s a wild, wild west out there.”
Recent Airbnb listings at the Peary House included one for a 525-square-foot one-bedroom for $99 per night. Another unit of the same size was listed for a monthly rate of $4,657, or about $155 per night. Listings were removed Monday morning after a Washington Post reporter asked the building’s owners and management company for comment.
Thos. D. Walsh, a property management company, manages at least four of the short-term rental properties at 2388 Champlain, according to its website. Keith Carr, its vice president, said he was not authorized to comment.
This is at least the second building in the District where multiple properties have been used as short-term tourist rentals while it was under rent-controlled restrictions. Last year, housing advocacy groups found that all 20 units in a rent-controlled Columbia Heights apartment were advertised on short-term rental sites. The owner of that building, at 3504 13th St. NW, could not be reached for comment.
“The reason this is of concern is that it is taking housing off the market,” Lazere said. “Clearly we have a really tight housing market — and housing prices are affected by supply.”
Airbnb, founded in San Francisco in 2008, has quickly mushroomed into a leading short-term rental service, accounting for more than 3 million listings in 50,000 cities. In the District, the number of Airbnb listings grew 38 percent between October 2015 and October 2016.
Last year, District residents earned $59 million in revenue by hosting Airbnb guests, according to the company, which said it has contributed $14.5 million in taxes on behalf of its local users in the past two years.
Will Burns, Airbnb’s public policy director, says 498 homes (not just a bedroom) were rented out for more than 180 days last year, accounting for 0.16 percent of the District’s total housing supply. Many users, he said, use Airbnb to rent out unused spaces or entire homes while they’re on vacation.
“This idea that Airbnb is what’s at the root of the rising cost of Washington is so dispiritous and wrong,” he said. “The data just don’t bear that out.”
D.C. Council member Kenyan R. McDuffie’s bill would create a new business license for short-term rental hosts. Under current rules, District residents must have basic business licenses, but McDuffie (D-Ward 5) says those rules are not well understood and are seldom enforced.
“Demand is much higher than supply,” McDuffie told The Post in January, “and when you turn an apartment building into a de facto hotel, it has a deleterious ripple effect on the housing stock.”