Feb 12, 2024 - News

Virginia considering loosening some Airbnb restrictions

Illustration of a ring of many keys and a man on a balanced scale of justice.

Illustration: Lindsey Bailey/Axios

An effort to limit local governments' ability to restrict Airbnbs and other short-term rentals is making its way through the state legislature.

Why it matters: If passed, the law could make it easier for short-term rentals to open and operate. But studies suggest they can deplete a city's housing supply and drive up home prices — two issues affecting Richmonders right now.

What's happening: Proposed legislation that would freeze localities' ability to regulate short-term rentals in some cases passed the state Senate Friday.

  • It'll now cross over to be considered by the House of Delegates.
  • The bill was supported by Airbnb and Virginia Realtors and opposed by representatives of counties and other localities, Virginia Mercury reported.

Zoom in: The proposed legislation would prohibit local governments from passing new ordinances that require property owners to get special or conditional use permits to operate a short-term rental at their primary residence, per Virginia Mercury.

  • The bill, sponsored by Richmond representative Sen. Lamont Bagby, doesn't affect existing policies as long as they were enacted by Dec. 31, 2023.
  • It also doesn't apply to properties that are not primary residences — i.e., vacation homes, investment properties and ones that are fully short-term rentals. Those would not be subject to the new, no-rules rule if the legislation passes.

Yes, but: Since short-term rentals took off more than a decade, localities have been struggling to get their arms around how many exist in their borders, and how many aren't occupied by their owners.

  • Richmond unanimously passed new rules for its short-term rentals last fall, in part because only 63 of them had registered with the city despite data that suggested more than 1,000 of them were listed.

Worth noting: A representative for the North Virginia Beach Civic League told the Virginia Mercury that it opposes the bill because it seems to benefit investors and real estate agents. Plus, it could allow short-term rentals to proliferate and further drive up home prices.

  • Sen. Bagby did not respond to a request for comment.

Meanwhile, a separate bill winding its way through the House proposes to create a statewide registry of short-term rentals.

  • That bill comes as localities across the state say short-term rental companies are not complying with current state law that requires them to send property addresses and gross receipts along with their monthly tax payments, Daily Progress reports.
  • According to officials around the Charlottesville area, companies like Airbnb are sending monthly tax payments, just not with addresses and receipts. Those documents would help officials know the tax payments are correct, plus give them a better sense of how many rentals are operating.

Worth noting: Richmond did not respond to a request for comment on its short-term rental tax situation, but Henrico County officials tell Axios they too are getting monthly tax payments, but not the required receipts and addresses.

By the numbers: With 1,212 listings actively booking at least one night, the city of Richmond has among the highest number of short-term rental listings in the state, according to data from STR rental analysis firm AirDNA.

  • Richmond ranks at No. 5, with only one less listing than Norfolk and around 100 fewer than Alexandria.
  • Williamsburg and Virginia Beach have the most with 3,872 and 1,972 listings, respectively.
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