MY TESTIMONY BEFORE THE DISTRICT OF COLUMBIA BUDGET COMMITTEE: A Local Solution To A National Problem In Defense Of The OTA Office of Tenant Advocacy

The Office of Tenant Advocacy, OTA, asked if I would testify at the DC Budget hearing contemplating reducing OTA’s budget. I said yes. I came to OTA after my landlords demanded my rent increase, twice within one month, five months after I became their tenant. I believe DC government’s goal for OTA should not be reducing OTA’s budget but giving OTA tools it needs to work effectively. 

I witnessed OTA staff expending precious time playing catch up on renter problems that existed long before I arrived in Washington- unlicensed landlords exploiting city residents and robbing city coffers. I figured out DC doesn’t know who a landlord is until a tenant, with landlord problems, walks through OTA’s door seeking help, leaving hundreds or thousands of landlords to exploit DC renters because the District has no  idea who these landlords are or where to find them.

In process, I learned a legal landlord must have a DC business license to rent in the District- be it a house, room, apartment, condo or couch. No  business license, no landlording; landlords can raise tenant’s rent, once in 12 months, if the increase is DCRA approved. No license, no rent increase; rents must be kept in a DC compliant security deposit escrow account.

DC must take two steps to reduce OTA workloads with speed bumps (1) at the time of the real estate transaction, when the dollar crosses the counter, make realtors responsible to identify to DC, the OTA, potential landlords, owners who may one day use their property for income; (2) implement a mandatory uniform lease for all District rentals, eliminating renter problems from leases not in compliance with DC law.

The District knows every property sold in the District is potential income producing taxable rental property. The District, to identify and reduce the number of  problem landlords must legislate, at the time of property sale, buyers signing a one sheet advisory “Notice of Potential Intention To Rent” the realtor then must file with the OTA, confirming the property owner was advised at the time of purchase if they rent their property after buying it, they must get a DC business license; keep their tenant’s security deposit in a DC compliant escrow account; and comply with DCRA process for approved rent increases, or be penalized for failure to do any of the above. Their Realtor, would be under severe penalty and stand to lose their Real Estate license if the Realtor failed to have this pre-cautionary “Potential Intention To Rent” signed off by the purchaser or not given to the OTA. Property sellers would sign a document stating, with a penalty of fines they did not rent out their property while owning it; had a business license, and paid all taxes on earned rental income. 

Property managers must be penalized harshly if accepting for management property rental agreements without a DC Business License Number; proof of DCRA rent increase approval numbers; and statement of where the security deposit is held.

Paramount to OTA budget reform is teaching DC tenants these rules a legal landlord must comply with. Place them where tenants go to find rentals: on newspaper and internet rental pages; pop ups when words like DC, rent, realtor are typed into Internet real estate sites, pagers and search engines ie Craigslist. The landlord’s Business license number and relevant DC renting codes, must be displayed on “For Rent” street signs where OTA inspectors can spot them driving by, easy to investigate for compliancy.                                              

With addressing tenant issues with landlords before problems begin by mitigating landlord/ tenant problems before they become a problem is the ultimate goal with bringing culpable “partners in crime” on board, making sure realtors risk losing their license if failing to provide a “Notice of Potential Intention To Rent” to landlords and proof of to renters, the needed second step is partnering with tax investigators able to immediately run on the landlord Recorder of Deeds along with tax compliancy, business license and other checks with the operating theorem being a person who is dodgy of the law in one area is usually dodgy of the law in other areas. If there is ever a partner for tenant advocacy agencies to bring on board the moment a landlord’s name crosses the tenant advocacy agencies desk, it is the IRS. While Elliot Ness and the FBI always get their man, it is the IRS and its crack investigators who not only get the man and the woman, they also get their money owed, or, in the alternative, the legal pound of flesh.  Not only will the OTA will work more effectively, at the same time, the IRS and a District’s Office of the Chief Financial Officer, will aid cities bottom lines by tracking unreported incomes from unlicensed landlords operating, in DC, and across the country.

DIALING THE DIGITAL RENTAL GOLDEN CALF AIRBnB:

There is a consistency in my life DESIGN and otherwise to be ahead of my time. I guess there is something to be said for consistency even when it comes to Testifying THREE YEARS before the DC City Council budget committee headed by Muriel Bowser as an advocate FOR the OTA Office of Tenant Advocacy to not have their budget cut. My experience was the OTA department was overworked and UNDER enforced. What good is having laws on the books if the laws are not enforced EVEN make that ESPECIALLY in DC.

THREE YEARS ago I laid out my professional evaluation of OTA effectiveness as learned through personal experience. LANDLORDS operate illegally because the simplest of conformances was not done- REQUIRING LANDLORDS TO PUBLISH THEIR BBL & DCRA license numbers on their lease OH and letting the renting constituency know these were DE FACTO not arbitrary. PUNISHABLE. CITABLE. But to the delight of the real estate community Builders Realtors Landlords not Tenants NOT enforced hence a boon of illegal landlords were getting away with operating under the radar costing the DISTRICT mega & much needed dollars. It took almost the same time for the office to hone in on my alert of SCAM rentals being offered on the Internet. Question was who would rent online in another country from someone they never met then send money expecting KEYS & comfort when they landed. That is why the phrase THERE IS A SUCKER BORN EVERY MINUTE has propulgated exponentially since the Internet morphed into warp speed.

AND THEN as the song says ALONG CAME in this case not Mary but Carrie who figured out the finger in the dyke to stem the flood of fiscal dollars out of local & federal government hands was to enforce the LICENSE NUMBERS in all and every ad Realtors Builders and Landlords are connected to Online in Print on Websites on Lawn signs Craigslist plus. Got to smile that it was Carrie who pointed out to the OTA at the OTA SUMMIT held at Galluadette earlier this year that the department had to set the example. Figures I saw the Department of Housing and Community Development’s web-based Apartment Finder had launched their E-HARMONY matching system for Landlords & Tenants SANS drop downs for BBL & RAD numbers required by DCRA law.

Fast forward a VC event or two and an awareness of SUCKER BEING BORN doubting becoming big business. AIRBnB http://www.airbnb.com was born more correctly founded in San Francisco CA August 2008 by Nathan Blecharczyk CTO & Co-Founder graduated Computer Science from Harvard then worked as a program manager at Microsoft, engineer at OPNET Technologies, and lead developer at Batiq. Nathan graduated with a degree in Computer Science from Harvard University. Co-Founder & CEO Brian Chesky takes pride in PUSHING THE STATUS QUO has stated his ambition is STAYING IN THE LINCOLN BEDROOM booked through AIRBnB. With offices now in London Paris Barcelona Sao Paulo Copenhagen Moscow Hamburg Berlin Milan & Singapore AIRBnB labelled “a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone… an apartment for a night, a castle for a week, or a villa for a month” has become a FISCAL & REGULATORY nightmare for cities starving for dollars. “ Airbnb is the easiest way for people to monetize their extra space and showcase it to an audience of millions” is putting BRICK business on the edge of their FISCAL CLIFFS. How nice to be right AGAIN at how wrong things will go & grow EXPONENTIALLY in Internet days and times. Talk about timing and technology, there I was spot on time again this time the potential for fraud became a business model costing locales dearly needed tax dollars.

Potential renters search by Dates Availability and Property. Hosts upload PHOTOS naming a price JUST like the none existent tree decorated address that was not across the street from the HOOVER building down on C Street in DC. Hosts are message through the onsite messaging system in which Credit Card info is entered. Not everything is can be wrong considering AIRBnB metrics of over 600 million Social Connections booking 10 million nights from over 200K listings worldwide in 33K in 192 countries. Have people not learned enough from ONLINE DATING fraud where pictured Princes turn out to be wart covered lotharios.

Every single booking on Airbnb is covered by AIRBnB’s Host Guarantee – at no cost to the host. Airbnb partnered with Lloyd’s of London, one of the world’s most reputable names in insurance so “in the rare case when something goes wrong” hosts know “forces are conspiring to protect” them for damage up to $1 million dollars FOR ELIGIBLE COUNTRIES with PAYMENTS subject to Certain conditions Limitations & Exclusions found in AIRBnBs. TERMS AND CONDITIONS does not cover Cash Securities Collectibles Rare artwork Jewelry Pets Wear and tear & Personal liability. TERMS AND CONDITIONS only covers currently eligible Australia, Austria, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Netherlands, Norway, Puerto Rico, Sweden, Switzerland, Turkey, United Kingdom, and United States. Even in the land of virtuality there is always a way out for Insurers. Surprised? NOT. After all business is business even in a Virtual Dog world.

AIRBnB hosts pay 3% when their booking is successful. Transactions are handled through AIRBnB with payment options of Check Direct deposit or Paypal. AIRBnB sends a photographer at no cost to the host. Autopost listings can be sent in ONE click to Craigslist Facebook Twitter & Google traffic plus for anything that is translatable in to 7 languages for spaces that are rentable Castles Boats Cabins Homes Islands and apartments. HOSTS are advised there are advantages to connecting through FACEBOOK a no brainer in that all platforms is seems are being enjoined with the INTERNET user at disadvantage. RULES are the hosts responsibility to convey to their GUEST but as with all other adages some learn the hard way that RULES ARE MADE TO BE BROKEN even when it comes to Parties Noise Smoking Pets Co-op Board regulation or HOA plus example being the INAUGURATION. Something about green crossing a palm that makes Tenants take a risk to get $10K for a downtown flat for the week of PRESIDENTIAL INAUGURATIONS.

Homeowners see Inauguration Week as the perk of domiciling in the political capitol of the world hoping to make big bucks for anywhere from a night to a week even more made easier these days. There are more than AIRBnB brokering temporary rentals between strangers. Other sites are Homeway.com, Flipkey.com & Brbo.com that help line up waiting lists for owners who speculate their zipcode has equity when POTUS swears in. If only homeowners paid attention and set politics aside they would be renting out too during March For Life week which packs out more hotels then POTUS but not at the opportunistic rates of Inauguration week of $600 a night for a non de plus 2 bedroom. Key word? HOSTING not renting. Renting is under the domain of the Landlords & Tenants.

HOOTSUITE reported HALF OF AIRBnBs New York City listings are illegal citing half of the apartments listed on the site are illegal according to New York state law. NYC banned short term rentals May 2011. Thing is AIRBnB according to HOOTSUITE did not DISABLE LISTINGS THAT BREAK THE LAW nor WARN CONSUMERS New York City laws were being broken with fines starting at $1K even though New York City found value in using AIRBnB to host HURRICANE SANDY victims as guests for free. The New York Times reported one AIRBnB host faced fines exceeding $40K for hosting AIRBnB guests in his AIRBnB posted East Village apartment. AIRBnB has taken to arguing policy change on their public blog challenging New York State Senator Liz Krueger sponsored legislation making short term rentals illegal because corporate entities were making full time business out of short term rentals. AIRBnBs wants PROGRESSIVE laws so everyday guests can use AIRBnB consistently & fair the online rental middleman says pointing fingers at legislative bodies & city officials arguing its not always easy to know how a law on the books maybe upheld by the people responsible with law oversight.

AIRBnB does advise re regulations COVERING THEIR BACKSIDE for not ensuring in the case of the DISTRICT of COLUMBIA that matchmaking between HOSTS & GUESTS complies with District rules or vetting the guest overlooking the Presidential Inaugural route is really them & not an alias or other or ducking out being caught by a suspicious husband or wife.

Regulators and GC setting up policy for local AIRBnB matches should take a look https://www.airbnb.com/help/topic/hosting. The USER POLICY https://www.airbnb.com/terms starts out with a premise it seems AIRBnB is violating Local State Provincial National or other Laws or Regulation or any order of a court including without limitation Zoning restrictions & Tax regulations. LANDLORDS IN THE DISTRICT OF COLUMBIA have to be LICENSED. C’mon VINCE GRAY. In your effort to boost DC as a Tech Capitol of the East Coast don’t break your own laws at a time DC needs DOLLARS. Despite LIVING SOCIAL announcing their imminent firing thousands of employees the day after MAYOR GRAY dazzled DCs HACKATHON announcing $35 million over 5 years as glue keeping the slipping deal’r stuck in DC…. as a DIGITAL WORLD GOLDEN CALF

REFERENCE: A LOCAL SOLUTION TO A NATIONAL PROBLEM: IN DEFENSE OF THE OTA, Office of Tenant Advocacy

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LET CONGRESS HEAR FROM YOU. Contact Congressmen Fred Upton, Joe Barton and Ed Markey & Senators Rand Paul, Mark Warner to protect your Identity and Intellectual Property from theft and cyber stalking. Contact Senator Tim Scott to defend your rights as an Entrepreneur
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