Rental restrictions come into effect in Washington DC

US: Restrictions on short-term rental housing have come into effect in Washington D.C., which will affect all homeowners in the city renting out properties on Airbnb and similar home-sharing platforms.

The incoming bill, which will govern the city’s short-term rental housing market, is called ‘The Short-Term Rental Regulation Act of 2018’, was officially passed by DC Council last year and came into effect on 1 October 2019.

It came in response to opposition from lawmakers in Washington who argue that rental platforms such as Airbnb are swallowing up inventory which could otherwise be used to create supply for local residents. Instead, they say this supply is being restricted and rental prices are consequently shooting up, with many locals being displaced from their neighbourhoods because they cannot afford to live there anymore.

The hotel industry is feeling increasingly and collectively threatened by such firms taking over affordable housing options. This year, it was reported that the American Hotel and Lodging Association (AHLA) spent over $1.6MM on lobbying authorities to enforce more extensive regulations that will slow down the growth of short-term rentals in the country.

The key points from the bill are as follows: 

1) Property owners in Washington DC will only be allowed to rent out one home as a short-term rental, and this home must be the landlord’s primary residence.

2) To legally operate a short-term rental, landlords / hosts must register with the city.

3) To rent out an entire property, hosts will need to obtain a valid vacation rental licence from the city.

5) The maximum number of times that hosts can rent out an entire property as a short-term rental is 90 nights per year.

6) Hosts will still be required to collect the city’s 14.95 per cent sales tax on accommodation from guests, and will be required to pass it on to tax authorities.

7) All short-term rental hosts are required to register for tax collection with the DC Office of Tax and Revenue (OTR) and must file regular sales tax returns.

8) Property owners who do not adhere to these new restrictions and requirements will be subject to fines ranging from $500 to $6,000.