This year Governor Terry McAuliffe signed legislation giving localities authority to regulate short-term rentals such as Airbnb. In Harrisonburg, those regulations of this currently illegal form of hospitality are taking shape. WMRA’s Christopher Clymer Kurtz reports.
On a recent Saturday I stopped by to visit the Wilson family.
JEANINE WILSON: Hi. Come on in. Hey Buddy, can you bring your basket over here so I can start putting some of your stuff in here?
This is Jeanine, and her seven-year-old son Jonah.
JONAH WILSON: Sure.
WILSON: We’re just going to be folding laundry, is that okay?
The Wilsons live in Belmont Estates just west of Harrisonburg.
WILSON: Yeah, that’s our koi pond.
I’d come to their home to ask about Airbnb — they use Airbnb as guests, and they’re active hosts.
WILSON: I really like the idea of meeting new people and having people in our home, especially for Jonah, him being an only child. He really enjoys having guests stay, and he likes to help them make their coffee, and I think it’s a good social thing for him, to meet new people and to realize that home is a welcoming place for people.
Now, lucky for the Wilsons, as Rockingham County residents, they are permitted to operate their Airbnb. In Harrisonburg City, though, where they used to live and where they also hosted through Airbnb, it’s not allowed.
ADAM FLETCHER: If you are in a residential zoning classification, and you are renting an Airbnb right now, or if you are the proprietor of one, it is illegal.
Adam Fletcher is Harrisonburg’s Director of Planning and Community Development. He said that earlier this year Virginia decided that localities can regulate short-term rentals such as Airbnb. Lexington, Charlottesville and other localities have already implemented rules. Rockingham County Administrator Stephen King said that the Board of Supervisors will likely discuss taxation and short-term rentals in the coming months. The city of Winchester has only had some internal “preliminary discussions” and has no timeline for “any future actions,” said the city’s communications director Amy Simmons.
Harrisonburg City Council member Richard Baugh said now is time for local government to get involved with regulating Airbnb.
RICHARD BAUGH: It’s been around long enough, it’s gone from not existing to, “Wow, we see clearly what this is and what it can do.” If you’re going to adopt rules for this stuff, better to do it now than have let the marketplace sort this out for 20 years and then go back and do it.
Although in Harrisonburg hosting short-term rentals is currently not legal, it will be made permissible — and taxable — by regulations currently being drafted and expected to end up before the City Council early next year. The current draft defines both Airbnbs and more traditional bed and breakfasts as the same use of property: short-term rentals that need a special use permit to operate. Again, Adam Fletcher:
FLETCHER: There are parameters and different things to look at, different circumstances, location being a big one. Is that location appropriate for short-term rentals?
A special use permit costs at minimum $405, depending on the size of the property. It’s usually a one-time fee and process, and is a case-by-case consideration. A requirement, for example, that short-term rental hosts would actually have to reside on site, to ensure accountability for neighbors, could be included as needed.
And under the current draft regulations, once a permit is granted? That Airbnb activity will be taxable. Harrisonburg’s Commissioner of the Revenue is Karen Rose.
KAREN ROSE: They would be required to get a business license with our office, and then they would need to be also collecting the transient occupancy tax and remitting that on a monthly basis such as our bed and breakfasts do.
Many hosts in Harrisonburg probably wouldn’t owe any business license fee. That cost depends on annual gross receipts; for a business with gross receipts of less than $10,000, there is no fee. Airbnb reported that last year the average host in Virginia earned well below the threshold for having to pay a fee in Harrisonburg.
But all city hosts would have to collect the 7% transient occupancy tax from guests, and remit that to the city every month. Either they’d have to lower their fees, or Airbnb guests would end up paying more. An Airbnb spokesperson said that it already collects and remits taxes on behalf of more than half of its U.S. hosts, but to do that in Virginia would require state legislation that hasn’t been passed.
However the transient occupancy tax would be collected, it’s not a matter of pennies. For Harrisonburg, it could be several tens of thousands of dollars. For Charlottesville, it’s potential is more like in the low hundreds of thousands.
Until the new regulations are implemented in Harrisonburg, the city’s Airbnb hosts are a bit, well, left up in the air. Rachel Whitmer has hosted through Airbnb over the last two years. She just recently learned that it’s not allowed.
RACHEL WHITMER: I wouldn’t knowingly move forward breaking the law. I would jump through the hoops unless they’re not worth it, and then I would just cancel the whole operation.
For the next while visitors to Harrisonburg might have to Airbnb outside of city limits, or get a hotel room. It could be mid-2018 before any Airbnb hosts in the Friendly City legally can begin welcoming more guests.
Adam Fletcher, Harrisonburg’s Director of Planning and Community Development, sent us more details about what happens in Harrisonburg in cases of short-term rental zoning ordinance violations:
"If and when we receive complaints regarding a potential short term rental, we investigate and send proper notices so that the operation ceases and the property is brought into compliance with the Zoning Ordinance.
When violations of the Zoning Ordinance are found, depending upon the type of violation, property owners are given either 10 days or 30 days to bring the site into compliance. The notice that property owners receive is via certified mail, which means that the owner has to sign for the letter and then the City receives a return card that confirms when the property owner received the notice. The clock to bring the site into compliance begins the day the property owner signs for the letter.
When a short term rental violation is found, because it is a “use” violation, the notice that the property owner receives explains that they have 30 days to bring the site into compliance. This means that after 30 days staff inspects the property to ensure the site no longer has a violation.
For short term rental violations, it is a little odd for an inspection because there really is nothing to inspect unless we view that they are still advertising the space on some kind of platform. On the plus side, aside from canceling already planned lodging appointments with future customers, it should be quite easy to bring the site into compliance because the property owner simply just needs to cease renting the space for a short term rental.
Staff is always hopeful that the property owner is respectful and brings the site into compliance on the first notice. We do the best we can to work with property owners, but depending upon the circumstances, if staff re-inspects a site and continues to find a violation, a second notice might be sent, where we typically will offer a shorter time frame for rectification. In the end, however, if the site is not brought into compliance, the way the current Zoning Ordinance operates is that we do not have the administrative authority to fine a property owner. This means that when a site is not brought into compliance, staff will file a summons with the local magistrate, who will issue the summons to the property owner and set a court date. If found guilty by the court, the charge can be a Class 1 Misdemeanor. I believe a Class 1 Misdemeanor can carry a punishment of confinement in jail for not more than 12 months and a fine of not more than $2,500 or both.
Unfortunately, just about every year we end up filing summons’ with the magistrate for different land use violations that were not rectified. However, to the best of my knowledge, I do not think we have ever issued a summons for someone not correcting a short term rental violation."