The big target of the legislation is people who buy commercial properties and list all the units of the building for short-term rental on such sites — thereby cutting into the supply of affordable housing available to local residents.
"When you look at the affordable housing crisis here in the District of Columbia, taking those types of units off the market really puts pressure on our housing market," McDuffie (D-Ward 5) said. "Demand is much higher than supply, and when you turn an apartment building into a de facto hotel, it has a deleterious ripple effect on the District housing stock."
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. Its presence has been particularly widespread in the District, where an estimated 18,500 visitors booked stays during this month's presidential inauguration.
"We've been engaged in productive conversations with D.C. officials for the last year and look forward to collaborating on fair, pragmatic home-sharing rules that allow native Washingtonians and long-time residents to continue sharing their homes," said Crystal Davis, a spokeswoman for Airbnb.
McDuffie's bill would create a new business license specifically for short-term rental hosts. Under current rules, District residents must have basic business licenses, but McDuffie says those requirements are not well understood and are seldom enforced. When hosts are in violation of the rule, there are no clear consequences in place.
Under the rules, hosts would be required to report their license number to online platforms such as Airbnb. The hosting platform would be responsible for verifying each license against District records. The rules also would clarify that hosts can rent their entire properties out for up to 15 days a year on Airbnb and other sites.
"Right now the regulations are confusing and [the D.C. government] has trouble enforcing them," McDuffie said. "We want to clear up the ambiguities and, at the same time, we want our city agencies to be able to enforce the laws that are on the books."
The bill comes on the heels of similar legislation that has passed in cities such as New York, New Orleans and Santa Monica, Calif. The Arlington County Council last month implemented rules that place similar restrictions on hosts by limiting them to renting out space in primary residences, and prohibiting parties, banquets, meetings and other commercial activities in short-term rentals.
A similar measure proposed by D.C. Council member Vincent B. Orange (D-At Large) and backed by a hotel workers' union expired when he left the council last year.
Housing advocacy groups, however, say the proliferation of short-term rentals has come at the expense of local residents. They estimate that 40 percent of Airbnb listings in the District are overseen by commercial operators and that 80 percent of Airbnb's D.C. revenue comes from illegal rentals of entire homes. (Airbnb disputes these numbers: "More than 75 percent of D.C. Airbnb hosts share their primary residences," Davis said.)
"Because these regulations aren't enforced, commercial operators are taking over the market," said Valerie Ervin, senior adviser to the Working Families Party. "This legislation puts teeth in the regulation, to make sure people are actually doing what they're supposed to do."
Specifically, she said, the measures would crack down on properties such as a rent-controlled Columbia Heights apartment building that was essentially operating as a hotel. All 20 units were recently being advertised on short-term rental sites, she said. The owner of that building, at 3504 13th St. NW, could not immediately be reached.
"This is taking affordable units right off the market," Ervin said. "And if there is less availability, rents get jacked up."
Airbnb is mired in a number of regulatory battles, as well as allegations that some of its hosts discriminate against renters. Lawmakers including Sen. Elizabeth Warren (D-Mass.) recently pushed the federal government to take a closer look at home-sharing sites after accusations that they were creating housing shortages and driving up rental costs.
The company has tapped four former mayors to help lobby city governments, and last year hired former U.S. attorney general Eric H. Holder Jr. to help craft new anti-discrimination policies.
If the law is passed, Airbnb hosts would have 120 days to comply with the new measures.
Those who violate the proposed rules could be fined up to $1,000 for the first instance and up to $7,000 for subsequent violations.
Airbnb and other platforms could face penalties, too. They would be fined $1,000 for each booking made in violation of the rules, McDuffie said. The fines would be used to create affordable housing in the District, with 50 percent of proceeds used to fund low-income housing.
"We appreciate innovation and technology — I encourage it, quite frankly," McDuffie said, "but we need to make sure we have a regulatory scheme that is designed to look after the best interest of residents in these communities."