VIRGINIA BEACH — The city is still tackling how to manage online short-term rentals, like Airbnb and HomeAway, almost a year after taking action based on its concern.
City officials gave recommendations on how to regulate short-term rentals in the wake of the 2017 General Assembly session at its workshop session Tuesday afternoon.
During the 2017 General Assembly session, Sen. Tommy Norment patroned a bill regulating short-term rentals in the Commonwealth.
The bill’s major points includes localities establishing a registry specifically for this activity that requires annual registration with the city, capping penalty fines at $500 per violation, barring rentals from operating if its owners fail to register them and more.
Last August, city council created a $1,000 bond requirement for people who failed to register their short-term rental with the commissioner of revenue, and agreed to tack on a $1,000 fine for those who “willfully” evaded registration.
“We held back then, and I think it’s still true now, that people renting out their homes are operating businesses out of their homes, and they needed to comply to the law,” Robert Matthias, assistant to the city manager, said.
Even with a 45-day grace period, Matthias said no one in the city has been fined at this point.
The new bill takes effect July 1, which means city council needs to cut in half the amount it could fine owners who fail to register.
Philip Kellam, commissioner of revenue, said the city has contracted a company called Host Compliance to help identify online rental owners in an effort to register them.
“Now that we have this contractor, we’re able to identify these properties much easier,” Kellam said.
Kellam said the average short-term rental paid $1,386.79 in transient occupancy taxes and that the lodging tax revenue could reach $1.1 million this year if the trend continues.
As of May 17, Kellam said there are 1,337 registered and verified short-term rental properties in Virginia Beach, which he said will continue to grow.
These numbers include 1,092 rentals managed by real estate companies, 186 rentals operated by individuals, 55 partial-home rentals and four bed and breakfasts, according to the presentation.
In addition to cutting the registration failure fine, Matthias recommends city council direct the city council to direct city manager Dave Hansen to draft an ordinance to amend city zoning to address the rentals.
“Fifty-five [of the 1,337] are partial home rentals — a room in your home, a sofa in your home in some cases,” Kellam said. “These are technically considered boarding houses, and these are issues you’ll begin to deal with when we keep working on developing zoning ordinances in the like.”
City council appropriated fund to have Old Dominion University study the impacts of short-term rentals locally, and its findings will be presented June 27.
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