An industry group opposing D.C. legislation to regulate Airbnb-style short-term lodging has filed a complaint with the Federal Trade Commission claiming an ad promoting the measure is deceptive and misleading.
But a former FTC official said in an interview that the agency is unlikely to take up the case.
The Travel Technology Association sent a formal request Tuesday to acting FTC Chairwoman Maureen Ohlhausen, saying her agency “has guidelines for testimonials and D.C. residents deserve an honest conversation on short-term rentals.”
Travel Tech claims an ad against short-term lodging sites by the advocacy group Share Better DC runs afoul of FTC endorsement regulations.
Share Better DC last month aired a television ad that opens with the title card “Anacostia, Washington, D.C.” A woman appears and says, “I was 5 years old when we moved to the neighborhood, but it doesn’t feel like the place I grew up or where I raised my children.”
The woman describes how the neighborhood has turned into a place for tourist rentals and says landlords kick out tenants and rent out entire buildings to tourists for short-term stays.
Airbnb hosts in Anacostia said on Twitter that they had never seen the woman in the neighborhood. The company slammed the ad, claiming the woman isn’t a resident.
Share Better DC did not return requests for comment on the ad or the FTC complaint. The organization confirmed to NBC4 in late April that the woman is an actress and the ad is ” intended to depict the real experiences D.C. residents have had with Airbnb in multiple neighborhoods.”
FTC spokesman Mitchell Katz said the agency had received the complaint but does not comment on whether it intends to investigate any particular matter.
Thomas J. Maronick, who spent 16 years as in-house marketing specialist for the FTC’s Bureau of Consumer Protection, said the agency is unlikely to take up the case.
“The fact that she is an actress versus a resident, they should have disclosed that, but it isn’t likely to be the kind of thing that would rise to the level of a federal trade issue,” Mr. Maronick, who now serves as an expert witness in marketing and advertising cases, told The Washington Times.
He said the FTC is likely to tell Tech Travel to pursue a claim at the local level because federal agencies must weigh budget and staffing concerns to address complaints.
“One of the questions they have to ask is, ‘What is cost-benefit trade-off, and do we want to put staff on this?’” Mr. Maronick said. “This is so local that I think that you look for a local resolution.”
The D.C. Council is considering a bill sponsored by Kenyan McDuffie, Ward 5 Democrat, that would create a special business license for residents who rent their homes to short-term visitors. They would be required to live at their rental properties or be present during the short-term stays, and they could not register more than one property.
Hosts could list properties as a “vacation rentals” for up to 15 nights per year without being present during short-term stays.
Violators could face fines from $1,000 to $7,000 — half of which would go to the city’s general fund and the other half to the District’s Housing Production Trust Fund.
Residents who use companies like Airbnb, VRBO and HomeToGo would be affected.
Airbnb has released ads opposing the bill, saying the “current proposal is unworkable and a clear nod to hotel-industry-funded organizations eager to attack regular families sharing their homes to protect the industry’s bottom line.”
About the Share Better DC ad, Airbnb said: “This deceptive and duplicitous ad is just the latest effort by the hotel cartel to short-sheet the middle class. While hotels have ignored Anacostia for decades, Airbnb is helping people in every corner of the District of Columbia, including in Anacostia, earn a little extra money and pay the bills.”
Mr. McDuffie said regulations are needed so people don’t buy up the city’s affordable housing stock and use them to charge high rents for short-term stays. He also said in a public hearing on the bill that he was willing to compromise on certain restrictions.
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