Short-Term Rentals can be defined in many fashions but most share the common trait of being rental stays of less than 30 days in duration. Today companies such as Airbnb, VRBO, HomeAway, Roomorama, Wimdu, and 9flats are all offering online platforms to connect travelers with short-term housing outside of the traditional hotel concept. This might include renting an entire house in a residential neighborhood, a small studio apartment above a commercial store, or a couch in someone’s apartment. The impact of having short-term rentals in a neighborhood or an apartment not licensed or intended for such a use can present difficulties for the renter, neighbors and owners.
Concerned citizens should contact their representatives concerning this issue:
State Senator Monty Mason
Delegate Mike Mullin
Local governments all over the world are wrestling with how to ensure the safety, limit the liability, and minimize the impacts of such uses on all those participating. The industry behind these unique offerings is seeking to simplify the process for a property owner to legally list their available couch, room, or home for short-term lease. Unfortunately, the best method for simplification is to regulate the use at the state or federal level which would eliminate local controls. Obviously, in communities like Williamsburg, where compatibility of use is important and regulations are based on decades of public review and collaboration, this concept is not well received.
Current Williamsburg Policy
The City of Williamsburg currently, absent statewide policy, allows short-term rentals as a Bed and Breakfast use and requires that they comply with all of the requirements imposed on that type of use. This includes allowing them in certain zoning districts, collecting taxes and requiring a permit process.
The City supports the “sharing economy” and welcomes innovation in business while at the same time desires to protect neighborhood stability. We support local authority to regulate the short-term rental use including approval processes, taxation and zoning controls. The City can be a dynamic and responsive locality for any new business but we also have to guard our residential and historic properties, which are very much, part of our identity.
During the 2016 Virginia General Assembly Session, the topic of short-term rentals was heavily debated. SB416 which was introduced by Senator Jill Holtzman Vogel, a Republican representing the areas around Winchester, was adopted. The Bill contained several impacts to the industry and local government:
- Allows persons to rent out their primary residences or portions thereof for charge for periods of less than 30 consecutive days or do so through a hosting platform.
- Localities are preempted from adopting ordinances or zoning restriction prohibiting such short-term rentals, but authorized to adopt ordinances requiring persons renting their primary residences to have a minimum of $500,000 of liability insurance, prohibiting persons from renting their primary residences if they fail to pay applicable taxes, and requiring persons renting their primary residences to register with the locality.
- A hosting platform must register with the Department of Taxation to collect and remit all applicable taxes on behalf of the property owner using the hosting platform.
- The bill defines "limited residential lodging," "booking transaction," and "hosting platform" and provides for penalties for violations of the Act.
The City of Williamsburg opposed SB416. Former Mayor Clyde Haulman addressed the City's concerns in a letter to Governor Terry McAuliffe in January 2016.
None of these changes took effect because the bill, as signed by the Governor, included a provision that required it to be ratified a second time during the 2017 General Assembly. The Bill also included a requirement for the Virginia Housing Commission to form a work group to study the issues involved. The work group was required to report to the General Assembly in December of 2016 with recommendations for legislative action or a proposed bill to be considered during the 2017 legislative session.
The work group consisted of representatives from the General Assembly, the industry, hoteliers, restaurateurs, bed and breakfast establishments, state agencies, counties, cities and towns. They produced a series of recommendations for inclusion in any new legislation that might be introduced. These were:
- Statewide policy application with consideration for whether the type of housing is a primary or secondary residence and how many nights per year a property is leased short-term.
- Centralized tax collection – The state would define and collect any taxes derived from the short-term rental industry in Virginia and return a pro rata share to the localities in which the use occurs.
- Local registration of a short-term rental would be an allowed requirement for local governments with some exceptions and considerations for how many nights per year a property is rented for short-term stays.
The 2017 Session of the General Assembly convened on January 11. Senator Thomas K. Norment and Senator William M. Stanley, Jr. introduced SB1578 and SB1579 respectively. While these bills are similar in that they protect the local control for taxation and zoning applications for short term rentals they are structured differently. During discussion of these proposals by the Senate Committee on Local Government, they were combined under one number. SB 1578 patroned by Senator Thomas K. Norment is now making its way through the legislative process.
SB1578 establishes the authority for a local government to establish a registration requirement for short-term rentals and maintains the ability for the locality to regulate the uses through zoning and collect applicable taxes. The Bill includes short-term rentals in the definition of a Bed and Breakfast.