The DC council moved yesterday to delay its second reading and final vote on a short-term rental bill that includes a ban of second-home rentals and a 90-day limit on non-owner-occupied rentals of primary residences, among other regulations.
The postponement came after the Monday release of an updated fiscal impact statement from chief financial officer Jeffrey DeWitt. The statement increased its estimated cost of Bill 22-92 from $96 million over the next four years to $104.1 million. The revised estimate includes the administrative costs of enforcement by the department of consumer and regulatory affairs (DCRA) in addition to the $96 million in lost tax revenue.
Council chairman Phil Mendelson introduced an amendment ahead of the meeting to use surplus revenue to cover the costs. Council members Charles Allen, Brianne Nadeau, David Grosso, and Anita Bonds raised concerns with Mendelson’s amendment and how the CFO’s revenue loss estimate would impact future budgets.
DeWitt’s report cites one of the biggest reasons for the revenue loss is the bill’s limitation of short-term rentals to areas zoned for transient rentals. This excludes exclude short-term rentals located in residential areas, which make up 80 to 90 percent of all current short-term rentals in the District.
Mendelson argued that the costs of enforcing rules that were already in place (that short-term rentals are not allowed in residential zones) should not be charged against this bill. He contended that even if the bill did not pass and the mayor decided to start enforcing the zoning regulations that were already in place, that revenue would not be included in the CFO’s estimates.
Mendelson also said he would submit a letter to the DC zoning commission requesting that it relaxes its prohibition of short-term rentals in residential zones. “If we get the zoning commission to change the regulations over the next year, the chief financial officer’s argument largely goes away.”
Grosso, Allen, and Nadeau were still not comfortable moving forward. “There [is] a whole mess of very important programs that I’d like to see revised revenue go to,” Nadeau said.
Mendelson withdrew his amendment and moved to postpone the vote until the next legislative session on November 13 to give time for the council to thoroughly address the financial concerns.