A few weeks ago, my organization had a problem: more people wanted to come to our annual Washington meeting than we had hotel space for. Since hotels marked up their rooms to as much as $1,000 per night during cherry blossom season, a number of our invited guests canceled, some shortened their trips and others pursued a third option – staying with area residents through the home sharing services such as Airbnb, HomeAway and VRBO.
Unfortunately, this safety valve alternative for D.C. visitors – and source of income for D.C. residents – may all but disappear, if the D.C. Council does the bidding of the hotel lobbyists in their now not-so-secret campaign to block home sharing nationwide. On April 26, the council is set to vote on a proposal that would arbitrarily restrict rentals to no more than 15 days and cap the number of homes D.C. residents can share. Also, violations of this measure would be punishable by fines up to $7,000.
City council members should consider the benefits that home sharing services provide – to hosts, guests and the city.
First and foremost, these services provide a source of income to the many D.C. residents who rent out their homes. And for many hosts, that income is crucial. Short-term rental income helps roughly 60 percent of Airbnb hosts stay in their homes and 70 percent of HomeAway owners cover more than half of their mortgages.
More, this additional income serves as a source of tax revenue for D.C. The District’s 14.5 percent hotel tax also applies to home sharing. And rental income must be reported to and is taxed by D.C. if it is more than $12,000 during the year.
Home sharing visitors also precipitate extra revenue to a diverse set of D.C. businesses, with the accompanying sales tax to the D.C. government. Visitors shop at stores, eat at restaurants and visit bars in the neighborhoods surrounding the homes in which they stay. Most of these homes are far from hotels and the additional revenue is significant for these D.C. businesses. In fact, 42 percent of spending by Airbnb guests is in the neighborhood in which they stay.
Nationwide, residents overwhelmingly support home sharing. Research from the Consumer Technology Association found those who have participated in the sharing economy – as guests or hosts – are overwhelmingly supportive (85 percent) of the services and of their entrepreneurial neighbors.
So why would the D.C. Council hamstring rather than embrace home sharing? Why would D.C., the city that represents the entrepreneurial spirit of 1776, innovators and a progressive city government, damage its reputation for being innovation friendly and restrict a service which helps D.C. residents, businesses and visitors?
The D.C. Council should do what is best for D.C. residents and businesses – not what is best for a hotel lobby trying to preserve a high-priced monopoly.
Calling for added rules on an already self-regulating, innovative ecosystem is backward thinking. And moving forward with proposals to curb the sharing economy is downright dangerous – to consumers, to the D.C. economy and, most importantly, to the innovative individuals who rely on the freedom, flexibility and additional income of this entrepreneurial economy.
Let’s make it easier for D.C. residents to earn extra income, stay in their homes and welcome the world to the nation’s capital.
Gary Shapiro is president and CEO of the Consumer Technology Association (CTA)®, the U.S. trade association representing more than 2,200 consumer technology companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro
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