On September 7, 2018, the Washington Post published an article in its Opinions section entitled “D.C. should learn from Arlington’s mistakes on Airbnb regulations”. The article discusses short-term, Airbnb-style rentals, and notes that despite regulations by Arlington County prohibiting such rentals without a permit, 90% of rentals in the County appear to be unpermitted after rules promulgated by the D.C. Council in December 2016 required permits. Goldman & Pease LLC, who has been closely monitoring this trend and publishing articles on the subject, is mentioned in this Washington Post article in the last line of paragraph 3. Click on the words “causing insurance liability problems” to view our article on our web site entitled “The Rise Of Airbnb: What Condominium Associations Need To Know About Short Term Rentals.” Feel free to contact us if you have a question or want to learn more about this ongoing issue.
D.C. should learn from Arlington’s mistakes on Airbnb regulations
By Dusty Horwitt and Pamela J. Lee | As published in The Washington Post
This fall, the D.C. Council is expected to join other local jurisdictions in considering regulations for short-term, Airbnb-style rentals in which homes and apartments function as hotels. Council members should learn from the ineffectiveness of regulations in Arlington County, where more than 90 percent of these rentals appeared to be unpermitted a year and a half after new rules took effect requiring permits.
The rules, enacted in December 2016, replaced an earlier prohibition on short-term rentals that was widely ignored. The new standards provide that owners and renters can offer their primary residences for short-term rent after they obtain a permit. To qualify, residents must pay $63 and show proof of residency, among other requirements. Enforcement is conducted on a complaint basis against individual hosts and not against major short-term rental companies — including Airbnb, HomeAway and VRBO. Short-term rental industry websites showed more than 1,000 units advertised for short-term rent in Arlington as of early July, but only 72 residents had obtained permits, down from 86 in January.
Regulating short-term rentals is important to protect affordable housing and public safety. To prevent conversions of residential units into full-time hotels, Arlington’s regulations stipulate that short-term rental hosts can rent only their primary residences. If such conversions are occurring (and they have in other cities), they could further reduce the county’s already limited supply of affordable housing. Prohibitions on short-term rentals in apartment buildings and condominiums such as ours are necessary to prevent unknown people from accessing multifamily buildings, including common areas that can be isolated, such as laundry rooms and gyms, and causing insurance liability problems.
Yet Arlington’s regulatory system, the realities of short-term rentals and a recently enacted Virginia law make it difficult to prevent illegal rentals or to know if they’re occurring. For example, Arlington’s regulations give our condominium the authority to enforce our prohibition on rentals shorter in duration than six months, a policy typical for condominiums and one that we have publicized in our community. But since at least 2015, one of our 134 units has been listed for short-term rental on Airbnb’s website as indicated by photographs of our community in the ad. The condominium board doesn’t know which unit is listed because the ad lacks an address, and the unit’s location on Airbnb’s maps is intentionally imprecise, both of which are apparently standard practices for Airbnb (other short-term rental company ads also lack addresses). The host is unfamiliar to our board and manager. The only realistic option for identifying the unit and communicating with the owner seems to be posing as guests and renting the unit ourselves — a step that no one should have to take. Neither Airbnb nor county officials have responded to requests to address the situation.
Complicating regulation further is a 2017 Virginia law that appears to exempt several classes of short-term renters from obtaining permits, including those represented by a real estate licensee. This measure seems to be another way to obscure the locations of short-term rentals and makes it difficult to know if unpermitted rentals are operating illegally.
Under these circumstances, regulation is effectively impossible. Regulators would have to consume significant amounts of time and funds simply to locate unpermitted short-term rentals.
The D.C. Council and other local and state governments should respond by enacting legislation consistent with the bill authored by D.C. Council member Kenyan R. McDuffie (D-Ward 5). His bill would require a short-term rental company to pay fines if a host lacks a business license. The license numbers would be linked to addresses in the license application. Regulators could enforce this provision by monitoring ads from their desks rather than searching for undisclosed rental locations. Compliance for the companies would be as easy as checking with D.C. government to ensure that potential hosts had a valid business license and license number before allowing ads online.
To protect affordable housing and public safety, the short-term rental business model requires an effective regulatory model, one that prioritizes regulation of the major companies.