What You Need to Know About the New Airbnb and VRBO Laws

On October 2, 2018, the D.C. Council unanimously gave preliminary approval for a bill known as the “Short-term Rental Regulation Act of 2018.” The bill, if ultimately passed as currently written, would drastically change the way short-term rental booking services, such as Airbnb and VRBO, are used in Washington, D.C.

First, it would create unprecedented licensing and reporting requirements for hosts and booking services. For example, section 104 of the bill would require operators of homes listed on short-term rental websites to acquire both a basic business license and a short-term rental license, each of which would need to be renewed on a biannual basis. Booking services would be required to submit detailed monthly reports to the Department of Consumer and Regulatory Affairs for each short-term rental transaction.

Second, it would impose severe restrictions on short-term rentals – more severe than anywhere else in the country other than New York City and San Francisco. Sections 102 and 106 of the bill provide that for an owner’s primary residence and when the owner is not present a “vacation rental shall operate for no more than 90 nights cumulatively in any calendar year.” The legislation would block second homes on a short-term basis. There is no limit on short-term rentals in one’s primary residence—such as a spare bedroom or basement—when the owner is present. This would affect many owners of multiple properties in D.C., who use booking services like Airbnb and VRBO to help pay the high costs of living in the city.

Those who support the legislation say it is designed to increase the availability of long-term housing rentals, which are currently being converted to temporary use for higher profits. On the other hand, opponents say the legislation goes too far, that it will cost property owners tens of millions of dollars in lost income, and that the Council is putting the interests of the hotel lobby ahead of the residents it purports to protect.

The bill has passed preliminary approval and is due for another vote in the coming weeks before it is sent to the mayor’s office and Congress for review. Even many proponents of the bill agree that its wording is too restrictive in its current form. However, D.C. residents who currently rely on short-term rental booking services should expect a major change when the bill is finalized and should contact a lawyer for help to remain in compliance with D.C. law and avoid substantial penalties.