Thursday, June 13, 2024

Virginia Municipalities Crack Down on Short-Term Rentals

Lake Anna, a short-term rental hot spot, resides partially in Spotsylvania and Louisa Counties. Both counties have drafted ordinances that would put restrictions like occupancy limits on those rentals. (VCU Capital News Service)

RICHMOND — Several Virginia municipalities have recently drafted or passed ordinances to regulate short-term rentals.

Scrutiny of short-term rentals mirrors a nationwide trend. Companies like Airbnb and Vrbo have become popular lodging options for tourists, as well as people in need of temporary housing.

Municipalities have pushed back against the rental options for reasons that include parking issues, noise complaints, trash and septic tank use volume. Supervisors have also cited concern over loss of hospitality tax revenue, as well as limiting available housing inventory.

Approximately 30 localities throughout the U.S. have regulated short-term rentals, according to a Business Insider report.

Most Virginia short-term rentals are found in more populous areas and tourist destinations, according to Capital News Service analysis of the market research site AirDNA.

Louisa County

The Louisa County Board of Supervisors earlier this month passed changes to the short-term rental ordinance, which will take effect Jan. 1, 2024.

There is now a more formal process in place for an owner to provide their contact information to the county and an HOA, if applicable. An owner must provide renters with copies of noise ordinance and solid waste policies. They must also provide the definition of special occasion and gatherings, to determine if an event would require a conditional use permit.

The county staff had recommendations that if passed would have taken effect in 2025. Those included requiring rental owners to provide documentation of septic system inspections and repairs, provide contact information, and offer one parking space per bedroom.

Citizens told county supervisors they are concerned about the septic tank failures caused by over-occupied rentals. Some of the proposed occupancy restrictions hoped to limit the impact on septic systems and prevent failures.

Rentals became a hot topic in Louisa due to Lake Anna tourism. There are fewer short-term rentals than in a city like Richmond or Alexandria, but the rentals are entire homes, and a majority larger than three bedrooms, according to AirDNA data.

Short-term rentals spiked in Louisa in recent years, with peak occupancy in the warmer months. There are currently 500 such rentals, according to a county spokesperson.

Some residents are worried about the water quality due to septic failures.

“We need to be inspecting these septic systems and particularly the ones where they are being overloaded in rentals,” said Phillip Winston, a Mineral resident who spoke at the meeting.

The Virginia Department of Environmental Quality added Lake Anna to the state’s impaired, or “dirty” waters list last year, due to algae blooms. Parts of the lake have been closed multiple times due to the blooms.

The Lake Anna Civic Association recommended that occupancy be limited to two guests per bedroom to reduce the risk of septic tank damage, according to its website.

Some zoning districts in the county are agricultural. Short-term rentals in these zoned districts are protected from most local regulation, per an opinion issued earlier this year by the state attorney general’s office.

Part of Lake Anna is in Spotsylvania County. Spotsylvania has drafted its own ordinance similar to Louisa.

Richmond

There are over 1,000 listed units in Richmond as of September, an increase of 76% in a three-year period, according to AirDNA data. However, the majority of the units in Virginia are not operated legally, according to a VPM review of city permits in June.

Richmond City Council recently passed a long debated ordinance that put several new regulations on short-term rentals, including reducing the number of rentals allowed on a lot in residential zoned areas.

Other ordinance changes now require the rental to be located at the host’s primary residence in all residential-zoned districts and limit the maximum occupancy of a rental from 10 to eight people.

City leaders also extended the length of a short-term rental certificate to 730 days. And voted to allow homeowners to build an accessory dwelling unit, within parameters, without a permit. These are smaller units like an in-law suite or carriage house.

The changes will help create a “convenient, attractive, and harmonious community” by limiting the number of transient visitors in residential neighborhoods, according to city planners.

Only homeowners can offer short-term rentals, something that 1st District City Councilmember Andreas Addison said there is confusion about.

He heard from several renters upset that they would be unable to generate money from renting out their apartments.

“You can not rent out your rented apartment,” Addison said. It could be cause for eviction.

Richmond increased regulations because of disturbances to residents, such as parking, trash and late-night noise, according to Addison.

“Short-term rentals I do see as a potential cause of nuisance because if you are not an owner of that house, and you’re renting it out, you don’t really care about the neighborhood,” Addison said. “You’re just there for the money.”

Caroline McDonald is a physical therapy student who plans to use Airbnb during the four months she is temporarily placed at a Richmond hospital. She used Airbnb because of the ease of rental process, which is a monthly payment with an advance deposit.

“Someone still lives there, but I’m just detached from their house,” McDonald said.

Most rentals will primarily come from pre-existing additions, because of the costs of building a unit solely for a short-term rental, according to Addison.

“I feel like a lot of the concerns and objections being raised and elevated have a place of legitimacy, but I also think they may be a little excessive,” Addison said.

Tourism was a metric that Council heavily considered when passing the ordinance.

“We can’t expect people that are going to come to visit the James River with a kayak and a bike to stay in a hotel,” Addison said.

Hampton

Hampton City Council halted short-term rental permits in August. The decision gives the city time to receive legal guidance and consider its regulatory options, according to Hampton Mayor Donnie Tuck. The pause allows for public input on how to move forward without acting on new permits, Tuck said.

Nearby Virginia Beach, a popular tourist destination, has one of the highest short-term rental listing numbers in the state at over 2,000, per market data.

Danville

Danville has seen an over 800% increase in short-term rental listings in a three-year period, according to AirDNA. The market research indicates there are currently 154 listings. Caesars casino partially opened in Danville this year, with a full opening slated for 2024.

The Danville Planning Commission recently recommended capping the number of rentals allowed in the city, along with other regulations. A public hearing about the commission’s proposals will take place on Nov. 13

Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.

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