Guests are flocking to Airbnb to book rooms in Richmond’s luxury lofts and quaint row houses, despite it being illegal to rent out your house for short-term stays.
But that could change during this session of the General Assembly.
Demand for the online house-sharing site peaked during the UCI Road World Championships, with a few hundred rentals reported. But city attempts to regulate Airbnb and other temporary online rental platforms stalled before the big races.
Demand continues to grow as more travelers turn to short-term online rentals. Visitors often cite cost, convenience and uniqueness of staying in someone’s house as main draws. But Richmond and other Virginia localities haven’t caught up with the trend by adopting zoning changes and ways to collect taxes.
Richmond Councilman Charles Samuels is holding a public information session on the city’s progress toward regulating short-term rentals tonight at 5:30 at the Washington Redskins Training Center.
But a bill being proposed by Delegate Chris Peace, R-Mechanicsville, would solve the issue if enacted. His legislation, the Limited Residential Lodging Act, would allow property owners to rent out a primary residence for periods of fewer than 30 consecutive days. The bill is written to supersede any local or state laws regulating “temporary lodging.”
Peace says that Richmond is primed to take advantage of the revenue that could be generated through Airbnb.
“In Richmond we are establishing ourselves as a destination for outdoor recreation and a restaurant scene,” he says. “I think [by] allowing Airbnb, FlipKey and others … we can tap into a whole new generation and offer accommodations to even the business traveler, that otherwise might not be available today.”
The legislation seeks to ensure that localities receive lodging tax revenues from Airbnb rentals, which isn’t possible now. Peace says that currently in Virginia, hosts pay state income tax on rental revenues, but that doesn’t go to localities.
The bill would solve the problem of Richmond getting the short end of the stick by allowing the Virginia Department of Taxation to decide what revenues go to localities. Peace says that this takes the burden away from individual local finance departments to collect their due.
Airbnb host John Giglia says that he pushed the city to look at ways to streamline revenue collection. Giglia was told by the city in May to stop renting his condo on Airbnb because it violated what he calls an “arcane” ordinance. He received a letter stating that city code allows only a certain number of unrelated people to live in a residence.
Peace says that tax collection was a sticking point for a Richmond City Council member with whom he spoke about the city’s progress toward allowing Airbnb.
The city plans to move forward with soliciting public comment to draft a local ordinance allowing Airbnb.
Taxes are a sticking point for other Virginia localities. Virginia Beach asked the General Assembly to address the safety and tax equity issues presented by Airbnb.
Peace says that because his bill allows only primary residences to be rented, it also would address hospitality industry concerns about competing with illegal hotels. Many Airbnb hosts who own multi-unit dwellings rent their properties, but aren’t subject to the same safety and code violations as hotels.
The bill also requires Airbnb hosts who operate over a period of 90 days or more in a calendar year to obtain a business license. It also stipulates hours when guests may receive visitors and includes clauses to honor local noise ordinances and other measures to minimize impact on the surrounding community.
But the Virginia Restaurant Lodging and Travel Association says that the bill doesn’t do enough to create a level playing field between Airbnb renters and hotels. Airbnb operators should meet a stricter threshold for when they are required to apply for business licenses, association president Eric Terry says.
“We are not opposed to Airbnb. We know it’s part of the economy,” Terry says. “We just want them pay the right taxes and adhere to the same standards as traditional hotels.”
He also notes that there's nothing to prevent Richmond properties from being listed on short-term rental sites, even though Airbnb is illegal in the city. Terry also says that the legislation could do more to make renters comply with many of the same public safety regulations required of hotels.