Nadeau Blasts Illegal Rentals After ‘Sting Operation’ in Columbia Heights

(Updated at 12:38 p.m.) Ward 1 Councilmember Brianne Nadeau is speaking out against an online room rental service after an apparent sting operation revealed an “illegal short-term rental hotel” in Columbia Heights.

Someone was illegally listing a rent-controlled apartment in Columbia Heights on Airbnb, Nadeau said today in a press release.

A recent undercover investigation conducted by several local advocacy groups revealed that the apartment was being run as an “unlicensed hotel” instead of being used to house people or families in need.

“We need to strike a balance between people who are trying to earn a little extra money by renting out a spare bedroom, and people who are using short-term rental platforms to support a commercial enterprise and undermining our efforts to preserve affordable housing,” Nadeau said in a statement. “This investigation shows that we need better rules and better enforcement so that these kinds of abuses are curtailed. In order to protect and expand affordable housing in the District, we need to do a lot more to police this growing problem.”

In response, Airbnb said it helps people in D.C. get “extra income that helps to cover their mortgage, pay down debt, repair their homes and make ends meet.”

The rental service added that it “collected and remitted over $12 million in tax revenue to the District of Columbia” since 2015.

“The vast majority of our D.C. hosts have a single listing on the platform and use home sharing to support their families and everyday expenses,” said William D. Burns, the company’s public policy director in D.C., in a statement. “The District has always been a leader in the innovation economy and any new rules introduced and adopted by the City around home sharing should be fair, progressive, and protect the economic benefits of all residents.”

Read highlights from the investigation in the full press release from Nadeau’s office:

In an effort to preserve affordable housing and crack down on the abuse of short-term rental websites, Ward 1 D.C. Councilmember Brianne K. Nadeau, joined by the D.C. Working Families Party, the Latino Economic Development Center and D.C. Jobs with Justice conducted an undercover sting operation of an illegal hotel.

To demonstrate the seriousness of the threat that illegal commercial short-term rentals pose to the local housing market, the D.C. WFP booked a rent-controlled apartment unit on Airbnb in Columbia Heights which, instead of being used to provide affordable housing for families, is being used along with other units in the building, to run an unlicensed hotel.

“We need to strike a balance between people who are trying to earn a little extra money by renting out a spare bedroom, and people who are using short-term rental platforms to support a commercial enterprise and undermining our efforts to preserve affordable housing,” said Councilmember Nadeau. “This investigation shows that we need better rules and better enforcement so that these kinds of abuses are curtailed. In order to protect and expand affordable housing in the District, we need to do a lot more to police this growing problem.”

“Affordable housing is scarce or nonexistent in this area,” said Valerie Ervin, Senior Advisor, Working Families Party. “Companies like Airbnb are pouring gasoline on the fire by creating a platform to profit off of illegal activity. It’s time for stronger regulations and tougher enforcement to protect affordable housing.”

Highlights from the exposé revealed:

• How easy it was for a tourist to rent an illegal apartment on short-term rental websites;
• How easy short-term rental platforms make it for operators to illegally rent residential units as transient hotels;
• How a number of short-term rental hosts are abusing the sites as commercial operators illegally renting multiple units;
• How substantial affordable housing could likely be returned to the market through more proactive enforcement of current D.C. law.

In her role as chair of the Subcommittee on Consumer Affairs, Councilmember Nadeau will introduce the “Short-term Rental Housing Abuse Reduction and Transparency Enhancement Resolution of 2016.” The resolution calls on the Zoning Commission to quickly revise its rules on short-term rentals to allow their use, but ensure health, safety and neighborhood concerns, such as affordable housing, are addressed. It also calls on the Department of Consumer and Regulatory Affairs to establish a business license for all short-term rentals offered through platforms such as Airbnb and VRBO. This property was cited by DCRA for an illegal rental in October, after being flagged by Councilmember Nadeau, but unfortunately the problem persists.

Illegal hotels are the unlawful conversion of permanent residential housing units into short-term transient properties. Both the D.C. Zoning Code and the Rental Housing Act of 1985 make this practice illegal. Short-term rentals are permitted in many circumstances, but D.C. regulations are designed to prevent abuses like the conversion of rent-controlled apartment buildings into hotel use.

Short-term rental platforms, like Airbnb and VRBO, financially incentivize the conversion of permanent residential units into more lucrative commercial short-term vacation rentals, resulting in a depletion of scarce affordable housing. Airbnb alone currently lists over 5,000 residential units in Washington, D.C.

Exposé Background:

The Latino Economic Development Center (LEDC) encountered this illegal hotel located at 3504 13^th St NW in the course of their normal organizing activities related to tenant protection. Dating back to November 2015, LEDC found evidence that this rent-controlled apartment building in Columbia Heights was being used for illegal short-term rentals instead of permanent housing. LEDC subsequently found that the property has 21 units, but the owner had represented to the District that, as of November 2015, there was currently only one tenant, and the other 20 units were listed as vacant. Further investigation also revealed that the owner of the building also owns several other buildings that he lists on other short-term rental platforms. Following their investigation, LEDC brought the case to the attention of Councilmember Brianne Nadeau, who then pursued the issue with DCRA, and joined with the D.C. Working Families Party to conduct this exposé.

Account Set-Up and Booking Process:

• Went to Airbnb website (www.airbnb.com)
• Found the apartment building in question–first confirmed by location information and other details, second confirmed when the operator sent “Valerie” the address of the apartment.
• Created one Airbnb account with profile info.
• Message sent to “Elizabeth and Jarek” to book a room in the building from Monday night December 12 to Thursday morning December 15 (the operators have a three night minimum stay).
• “Valerie” received a positive response and booked the room.
• Following the operator’s acceptance of the rental request by “Valerie”, the exact address of the rental listing was then provided.
• It was not necessary to arrange a key pick-up, because the building had been equipped with keyless entry keypads on the front door and room doors.

Photo via Twitter / Brianne Nadeau