Saturday, December 9, 2023

Virginia Beach wrestling with regulating Airbnb rentals

Hosting travelers through the online room and house-renting service Airbnb is illegal in Virginia Beach, but that hasn’t stopped more than 300 residents from posting their homes on the site.

The Virginia Beach rentals on the mobile app-based lodging service are not authorized under city zoning rules, according to Robert Matthias, assistant to City Manager Dave Hansen. The short-term rentals, which are among more than 2 million listings worldwide on Airbnb, operate without home business permits and don’t pay a transient occupancy tax, something all local hotels pay, Matthias said.

“We think we’re losing at least $200,000 a year from lost transient occupancy taxes, or hotel taxes,” Matthias said.

The city pushed hard to ensure state legislation didn’t pass earlier this year that would have kept renters’ locations and identities private, Matthias said. Currently, there remains no city regulation for Airbnb hosts in Virginia Beach, but city officials hope to establish a framework to regulate the rentals to collect hotel taxes and add safety inspections, Matthias said.

Last week, the Virginia Housing Commission appointed a study group to help shape state Airbnb-related legislation for the General Assembly to consider in its 2017 session. The group’s first meeting is open to the public and is scheduled for May 10. Matthias said the city will be following the group’s meetings throughout the summer.

Several Airbnb hosts contacted for this story did not want to share their names in the article because of legal situation but said they were unaware the practice was prohibited in the city.

Beach resident Daniel Duhl, who lives in a home designed by Frank Lloyd Wright, began using Airbnb in 2014 to rent his “staff suite.” The 90-year-old said during busy months, he and his wife could host a dozen or more guests.

Asked in phone interview whether or not they would continue to rent with Airbnb if the city enforced registration and hotel taxes, Duhl said he wasn’t sure.

“One of the reasons I’m doing this at all is because of the simplification,” he said. “I don’t have to fill in registration or get inspections or all of the other things that are involved. I pay taxes on what I get.”

Duhl said he and his wife used to rent out their home for weddings, but the preparation and cleanup was too much work. The couple held back from renting the suite in the past because of the paperwork it would have required, he said.

“When Airbnb happened, it seemed like a simple way to be able to do it, and enjoy doing it without any of the problems,” Duhl said.

Eric Terry, president of the Virginia Restaurant, Lodging and Travel Association, is in the state’s study group, as are representatives from Airbnb corporation, Travel Technology Association, Hilton Worldwide and others. Rentals have increased in Hampton Roads; Norfolk was recently ranked one of the highest growing markets for Airbnb, Terry said.

“Right now, by not paying taxes, there’s no accountability,” he said. “No transparency, and so the city of Virginia Beach has no idea who is renting their homes now on Airbnb.”

Terry said the renters should be treated like all other business owners and be required to get a business license, and register their homes as hotels do to allow the city to charge proper sales and bed taxes.

Virginia Beach hotels pay a $1 “bed tax” per night, an 8 percent hotel tax and a combined local, state and regional sales tax, Matthias said. Airbnb hosts pay income tax but sidestep the other levies.

The Virginia Beach Hotel Association also wants Airbnb rentals regulated, according to Diana Burke, executive director of the association.

“We’re not opposed to Airbnb, we just want them to have the same level playing field as us, or at least close to it,” Burke said.

Many Virginia Beach residents renting their space via Airbnb may not know the service is prohibited under the city’s zoning policy, Matthias said.

“I imagine a lot of people don’t know it’s illegal,” he said. “I could say ignorance of the law is not an excuse.”

One host said Airbnb is her only source of income because she is limited to working from home due to a medical condition. Another host said she would not be opposed to paying additional taxes, but only if the resident log and her address are kept private from the city.

Have a story idea or news tip? Contact Business reporter Hillary Smith  at or 757-490-2750.

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