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D.C. Council votes to restrict Airbnb and similar rentals in nation’s capital

(Issei Kato/Reuters)

The D.C. Council unanimously gave preliminary approval Tuesday to curbs on short-term rentals that would put in place in the District some of the nation’s tightest limits on Airbnb and similar home-sharing services.

The restrictions would ban hundreds of D.C. property owners from renting out second homes on a short-term basis and place limits on thousands more who rent out spare rooms or basements in their primary residences.

It would also create new licensing and reporting requirements, and other regulations for hosts offering short-term rentals, as well as reduce the availability of such lodging for visitors to the nation’s capital.

Airbnb lobbied hard against the plan, saying it would cost property owners tens of millions of dollars in lost income and give the District the most restrictive legislation of any major U.S. city except New York and San Francisco. The company said it would continue trying to persuade the council to soften the restrictions before a final vote later this month or in November.

But the council signaled that it supported the strict regulations, citing the need to protect affordable rental housing and prevent disruption of residential neighborhoods.

The bill would curtail short-term rentals that “take properties off the market for tenants for the long term,” said council member Kenyan R. McDuffie (D-Ward 5), who introduced the bill.

Mayor Muriel E. Bowser (D) has suggested that she thinks the bill is too restrictive but has not called for changes or threatened to veto it.

The legislation represents a victory for the hotel industry, community groups and other Airbnb critics. Red-shirted members of Unite Here Local 25, which represents hotel workers, filled most seats in the D.C. Council chamber when the debate took place and cheered the result.

“We praise the city council for pushing this important issue forward to not only safeguard housing for the families we serve in D.C. but also relieve the pressure short-term rentals cause on the cost of housing citywide,” said Kelly Sweeney McShane, president of Community of Hope.

Airbnb and similar companies have said the hotel industry and its unions are trying to eliminate competition. About 9,000 short-term rentals operate in the District, competing with about 31,000 hotel rooms.

The rental companies also say that short-term rental properties represent such a small fraction of the District’s 300,000 housing units that the effect on rents is minimal.

“We’re really frustrated that the council chose big hotels over regular people sharing their homes, but we’re here to work with the council,” said Christopher Nulty, Airbnb’s head of public affairs for the Americas. “We’re definitely not walking away from the table.”

Nulty and some council members also objected to the bill’s price, after Chief Financial Officer Jeffrey S. DeWitt said the measure would cost the city at least $96 million over four years, mainly from loss of taxes now paid by hosts of short-term rentals.

But McDuffie and Council Chairman Phil Mendelson (D) said they disagreed with DeWitt’s analysis, mainly because it assumes that the bill would lead the city to effectively shut down all home-sharing on grounds that short-term rentals violate zoning regulations in residential neighborhoods. Such violations are widespread but are rarely punished.

McDuffie said passage of the bill — which creates a license for short-term rentals — ought to encourage the city’s zoning commission to revise regulations that discourage home-sharing

“We’re sending a message that we want it to be legal,” McDuffie said.

Mendelson said he would meet with DeWitt and propose technical amendments to reduce the cost to the city.

“There will be some impact [on revenue], but I don’t believe it will be $20 million a year,” Mendelson said.

The debate over short-term rentals has become part of a broader controversy over gentrification in the District. Critics say Airbnb, HomeAway, VRBO and similar short-term rental companies are driving up housing costs and giving residential communities an unwelcome commercial feel.

But the home-sharing services and many hosts argue that people living in the city need the extra income gained from renting out their properties to afford to stay in the District.

The legislation blocks property owners from using Airbnb and similar companies to rent second homes on a short-term basis. And it limits homeowners to renting out a primary residence for a maximum of 90 days in a calendar year when the host is absent — a practice termed a “vacation rental.”

There would be no limit on short-term rentals of space in one’s residence — such as a spare bedroom or basement — when the host is present.

The voice vote approving the bill came after the 13-member council voted 8 to 5 to reject an effort to soften the restrictions. Council member Charles Allen (D-Ward 6), whose Capitol Hill jurisdiction includes many Airbnb hosts, sought to raise the ceiling on vacation rentals — when the host is absent — from 90 days to 120 days.

He noted that many of his constituents are military or diplomatic personnel who often need to rent their primary residences for more than three months, but not as long as a year, when they are called away for work.

Allen said he would try again to raise the cap before final passage but conceded, “I can see the votes are not here today for that.”

Joining Allen in supporting the failed amendment were council members Mary M. Cheh (D-Ward 3), Brandon T. Todd (D-Ward 4), Robert C. White Jr. (D-At Large) and David Grosso (I-At Large).

Opposing it were Mendelson, McDuffie, Anita Bonds (D-At Large), Jack Evans (D-Ward 2), Vincent C. Gray (D-Ward 7), Elissa Silverman (I-At Large), Brianne K. Nadeau (D-Ward 1) and Trayon White Sr. (D-Ward 8).

Cheh and Todd said they also would like to amend the bill to allow property owners to rent out at least one additional home — on top of their primary residence — because many of their constituents have second properties.

“For some folks, particularly if they’re older, they want to use the extra money to [afford to] stay in their homes,” Cheh said.

Todd said property rights were also an issue.

“I’ve also heard from Ward 4 residents that they don’t like the government to tell them what to do with their homes,” he said.

Mendelson said the public’s biggest concern was about short-term rentals of houses when the host is absent.

“This is where we get the complaints about the party houses . . . or how it transforms a neighborhood,” Mendelson said.