NYC Outlaws Airbnb, Will DC Follow Suit?

by Shilpi Paul

image
An Airbnb rental in New York City.

A recent court ruling made Airbnb illegal in New York City. Is DC next?

The precedent-setting ruling came in the case of Nigel Warren, who had been renting out his bedroom, part of a two-bedroom East Village apartment, to Airbnb users. The city caught wind of it, and charged Warren with breaking the law.

Earlier this month, Warren and Airbnb representatives tried to make a case for themselves at a hearing. They found language in city law that they felt allowed short-term renters to stay in an apartment like Warren’s, The New York Times reported.

The city laws in question are a bit unclear and can be hard to interpret, making it difficult for hosts to know if they are in violation. However, Warren seems to have broken at least one law, cited by The Times here, which states that it is illegal for someone to rent out portions of their home or apartment for a short time unless they are living in the residence during the same time period.

The judge handed down his decision on Monday, and ruled against Warren, who was fined $2,400 and, presumably, cannot rent out his room anymore.

The ruling makes clear that many people using the website are probably breaking city laws, particularly hosts who are renters themselves. The tricky part is that Airbnb itself is not doing anything illegal; it is simply setting up its users to break the law.

The business, valued at $2.5 billion, will now start issuing a more explicit warning to those who sign up to be an Airbnb host, making it clear that many cities may deem the practice illegal, or have certain requirements, like acquiring permits, that must be completed before renting out a room.

Now that one of Airbnb’s largest markets has deemed renting out rooms through the site illegal, does this harken the ultimate demise of Airbnb? Will users simply flout the law or will hosts acquire the pricey permits necessary to participate?

Readers, do you think DC will now crack down on Airbnb? Let us know in the poll below and in the comments section.


See other articles related to: airbnb illegal, airbnb

This article originally published at http://dc.urbanturf.com/articles/blog/nyc_outlaws_airbnb._will_dc_follow_suit/7101

17 Comments

  1. KL said at 11:31 am on Wednesday May 22, 2013:

    As hotels continue to lose business in DC, it is only a matter of time until the city cracks down on Airbnb. The company must have lobbyists working on their behalf to change the law. Gonna have to start working overtime.

  1. Diana said at 1:01 pm on Wednesday May 22, 2013:

    I am sure that DC will eventually crack down on the service and those who use it, the question is how much?

    Plenty of homeowners in DC already rent out their places without the appropriate permits and licenses and only a fraction face the consequences. I suspect it will be the same with Airbnb.

  1. Janice said at 2:12 pm on Wednesday May 22, 2013:

    Fight the power!

  1. sapo said at 2:23 pm on Wednesday May 22, 2013:

    I agree with Diana. I could see the city passing a law against AirBnB to appease the hotel industry but hardly enforcing it. It’s really not in their interest to crack down on people renting units out illegally. I believe the shadow market for basement and room rentals in this city actually drives up housing prices because people factor the rental income into their purchase. The rental income allows them to afford more house and thus drives up real estates prices and subsequently, real estate taxes.

  1. Justin S said at 2:47 pm on Wednesday May 22, 2013:

    As someone familiar with the AirBnB scene, I think it’s unlikely that DC would write any new laws until the city starts enforcing the existing laws.  Currently DC hosts are supposed to have buisness licences and go through all the normal hoops that a landlord would have to go through in order to be “legal.” As far as I know, excactly zero AirBnB hosts I’ve met have bothered with this step.  Related: In 6 years of renting all over the city via craigslist, before buying my own house, I don’t think I ever once lived in a legally rentable apartment.

    As “pro tenant” as DC’s whiny landlords claim this city is, it’s almost impossible to find a legal english basement on Craigslist. Obviously there’s a pretty big gap between the laws on the books and the city’s enforcement of those laws.

  1. Jake said at 3:05 pm on Wednesday May 22, 2013:

    Just force Airbnb to collect room tax on each transaction in each jurisdiction. Or, drop the room tax on hotels. Then as I citizen I won’t care. But parity is required. Without tax parity, I respect the hotel industry’s grievance.

    Amazon faced the same challenge vs. retail, and   parity was enforced.

  1. Wilson said at 3:19 pm on Wednesday May 22, 2013:

    It is unlawful to rent out rooms in a house that is not zoned for that. The issue has nothing to do to Airbnb.  The City doesn’t ignore anything.  they are losing the sales and use tax which is 14.5% , permit fees which are substantial, housing business licenses fees and the list goes on.  Illegally renting out rooms is an affront to all other DC residents and businesses who operate their businesses lawfully.  I doubt very seriously if people who are engaged in this illegal activity report it as income on their taxes because tax records can be cross referenced with housing and business records.  It is a matter of public record as to how a particular piece of property is zoned as and what housing business license are required. Rental income can’t be counted as income for purposes of supporting a mortgage application unless it is declared on Schedule E of the 1040.

    Homeowners insurance doesn’t cover damages to or from illegal renters.

    What is really interesting is that these very people who are profiting from illegal
    Actively want to hold everybody else to the letter of the law.

  1. Tom A. said at 3:43 pm on Wednesday May 22, 2013:

    I find it hysterical that people are worried about a hotel- which regularly sells out 500 rooms at $400 per night, as compared to someone who rents out their one spare bedroom for 50 or 75 bucks.  If DC does crack down, I suppose people will just go back to doing the same thing on craigslist like they have for years.

  1. zcf said at 4:09 pm on Wednesday May 22, 2013:

    yeah that’s a crying shame.  I hate staying in hotels in New York, especially with a bigger group. It’s so nice to get a kitchen.  So does that mean that VRBO is illegal as well?  I hope this gets over-turned.

  1. cam said at 10:28 am on Thursday May 23, 2013:

    I discovered that a number of people in my downtown condo are using Airbnb to make much, much more than $50-75 per night.  The ads tout the great amenities in my building.  I wasn’t pleased to learn that I’m sharing my building’s amenities, including our front desk staff, with complete strangers.  It’s definitely a violation of condo rules, and I’ve reported this to the board, but I also contacted DC about the issue.  I received no response, so I’m under the impression that DC doesn’t care and/or doesn’t have the resources to enforce the law.  (I checked, and none of the folks in my building using Airbnb for extra cash have the required licenses).  Take a look at who is running an illegal hotel in your neighborhood.  You may be shocked.  There are plenty of reasons to object to Airbnb—safety and loss of tax revenue come to mind, but there are others.  Count me on the side of supporting legislation to ban the practice, or put much tighter controls on it.

  1. Com said at 12:52 pm on Thursday May 23, 2013:

    So, per this, though, a single person (or couple) with a 2-bedroom could legally AirBnB their 2nd bedroom, as long as they were occupying the other bedroom then? In theory?

  1. Jason said at 3:17 pm on Thursday May 23, 2013:

    I think subletting and re-renting while you are away should be legal generally but renting out a property that you own but don’t live in yourself should require a business license.

    If DC is going to enforce housing laws more stringently, start with the condo associations that have all kind of illegal rules about renting/renters and those that treat renters unfairly.

  1. mona said at 3:42 pm on Thursday May 23, 2013:

    Seriously doubt that DC will outlaw Airbnb. They don’t have the resources the control the illegal basement rentals going on in the city much less the Airbnb stuff. If only they could collect the revenue from all this our taxes would drop

  1. west side long term stay hotel in NYC said at 11:14 pm on Friday May 24, 2013:

    Truly an amazing post. Loved reading it

  1. Airbnb = Awesome said at 1:28 am on Sunday May 26, 2013:

    The ruling doesn’t necessarily mean all Airbnb hosts will be cracked down on, as the city only enforces the rule when a complaint is filed.

    http://www.fastcompany.com/3009953/where-are-they-now/airbnb-stay-illegal-in-new-york-rules-judge

  1. smn-dc said at 5:04 pm on Monday June 17, 2013:

    US hosts using AirB&B actually do pay taxes to Uncle Sam as AirB&B reports it. I’ve used AirB&B while traveling abroad and love the experience. Times have changed and especially w/the Internet at our finger tips, ways of doing things also need to change. Traditional hotels need to move over and make room for innovative ideas—such as AirB&B. Bravo to AirB&B!

  1. tmp said at 12:49 pm on Thursday November 14, 2013:

    I am big proponent of AirBnb. Since a rising tide floats all boats, I think hosts should focus on taking care of the neighbors around them and keeping them happy too. I fixed both of my neighbors leaky porch roofs when I was fixing mine and brought my neighbor shopping when she got a new job after being unemployed for a while. Take care of your neighbors with a little extra income AirBnB and keep them happy. Make sure they have your number if guests are loud or disorderly and make sure your neighbors know you are looking out for them too.

Join the discussion

UrbanTurf now requires registration in order to post comments. Register here, or login below if you are already registered.

Click here if you forgot your password.




 

Andy & Sue Hill

McEnearney Associates

301-646-3900

Serving:

Bethesda

Chevy Chase

Friendship Heights

NEW!

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We’ve collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Ballston
Looking to Give People A Reason to Stay Past 6pm
Clarendon
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Rosslyn
Hitting Its Growth Spurt
Shirlington
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
Huntington
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
Parkfairfax
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »

Maryland

Profiles of 14 neighborhoods in suburban Maryland

Annapolis
Small-Town Living in the State Capital
Bethesda
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
Potomac
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
Wheaton
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Hyattsville
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Bloomingdale
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
Brightwood
DC’s Northern Neighborhood on the Cusp
Burleith
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
Crestwood
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Fort Totten
Five Years Could Make a Big Difference
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
Georgetown
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
Kalorama
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
Palisades
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Petworth
Getting a Vibrancy of Its Own
Shaw
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Takoma
Not To Be Confused With Takoma Park
Tenleytown
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

Brookland
New Development Could Shake Up Pastoral Peace
Deanwood
A Little Bit of Country Just Inside the District’s Borders
Eckington
Not to Be Confused With Bloomingdale
H Street
A Place To Party, and To Settle Down
Langdon
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
NoMa
Evolving from a Brand to a Neighborhood
Rosedale
Ripe for Investment Right About Now
Trinidad
The Difference 5 Years Makes
Woodridge
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 'hoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Hillcrest
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾