Aug 1, 2023 - Real Estate

Richmond is eyeing big changes for its short-term rentals

Estimated short-term-rental listings in Richmond
Data: AirDNA; Chart: Simran Parwani/Axios

The city is in the process of updating its regulations for Airbnbs and other short-term rentals for the first time since it adopted them three years ago.

What's happening: The proposed changes are intended to bring STR hosts that are operating without permits out of the shadows — and into compliance with city policy, including by paying their annual permit fee, BizSense reported earlier this year.

  • Those changes include allowing renters to operate STRs, doubling the biannual permit fee from $300 to $600, and dropping the requirement in nonresidentially zoned neighborhoods that the rental must be owner-occupied for at least half the year.

Why it matters: The vast majority of short-term rentals in the city are still operating illegally.

  • There were 63 short-term rentals with permits and therefore operating legally in Richmond as of June, according to city data, VPM reported.
  • Yet there were 1,059 listings actively booking at least one night within the city limits in June, according to data shared with Axios by short-term rental analysis firm AirDNA.

Right now, the city isn't generating enough revenue from existing STR permitting fees to cover the $35,000 annual cost of the third party compliance software it uses to monitor them, city planning director Kevin Vonck told BizSense.

Worth noting: STRs can promote tourism and interest in a city and provide an added revenue stream for operators.

Yes, but: They can also deplete the existing housing supply and drive up prices, some studies suggest.

By the numbers: The number of short term rentals has exploded in Richmond since the pandemic, with available listings rising by 51% since June 2020, per AirDNA data.

  • At 290 listings, zip code 23220, which includes the Fan, has the highest concentration of STR listings.
  • There are 160 active listings in 23223, which includes Church Hill.
  • Followed by 91 in 23219, in downtown and Jackson Ward.

Be smart: The proposed STR changes are one of three major zoning changes city officials unveiled last year intended to make it easier to do business in the city and/or to increase the housing supply.

What's next: The Planning Commission is expected to take up STRs and issue its recommendations at its next meeting on Aug. 21.

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