The Airbnb question: City struggles to regulate short-term lodging industry

Debra Weiss rents a guest house made of refurbished materials called the Recycled House. She doesn’t buy the “bugaboo” that out-of-state moguls will buy up houses to turn them into short-term rentals and ruin neighborhoods.
Photo: AMANDA MAGLIONE Debra Weiss rents a guest house made of refurbished materials called the Recycled House. She doesn’t buy the “bugaboo” that out-of-state moguls will buy up houses to turn them into short-term rentals and ruin neighborhoods. Photo: AMANDA MAGLIONE

Unregulated short-term lodging is a booming business in Charlottesville, but as more and more locals rent out rooms and houses to guests on sites like Airbnb, city officials are increasingly anxious to get rules on the books and find a way to make hosts pony up for required taxes and fees.

Charlottesville’s Department of Neighborhood Development Services (NDS) saw the writing on the wall last summer, when the city had more than 300 listings on Airbnb, a global online network that allows homeowners to advertise to potential guests and turn a profit. Staff launched a study of how other cities—including Austin, Texas and Madison, Wisconsin—have managed the issue of transient lodging. Six months later, Charlottesville’s Airbnb listings are north of 400, and the city isn’t much closer to finalizing regulations.

Former NDS director Jim Tolbert, who recently stepped down, presented the study findings to City Council January 20. He said a big concern is whether or not hosts are available in case there’s a problem with the property or neighbors have a noise complaint.

Not all short-term rental setups are created equal, Tolbert told Council. He said short-term rental company Stay Charlottesville, which manages dozens of properties, is setting a standard by providing a number to call for both guests and neighbors in case there’s any sort of problem, and recommended that the city require that other hosts provide similar accommodations. (C-VILLE co-owner Bill Chapman is a Stay Charlottesville partner.)

Travis Wilburn, co-founder and managing partner of Stay Charlottesville, said he just wants a level playing field for everybody in the industry.

“We’re actually asking for regulations,” he said, noting that he’s come across Airbnb hosts who don’t know they’re supposed to be paying fees, a 6 percent lodging tax and sales taxes. “It might not even be ill intent, they just don’t know the factors,” he said. “We want to inform people on how to go about operating whether with a management group or as an individual, and how to make sure that your neighbors are happy.”

Wilburn also pointed out that Charlottesville’s tourism industry is not as commercially driven as other cities in Virginia. The city has received four noise complaints about homes being rented out to large groups, but overall, people come to Charlottesville for weddings, winery hopping and graduation weekends, or to check out neighborhoods they’re considering moving to. They’re not expecting a Virginia Beach or Williamsburg experience.

But some city officials aren’t entirely convinced that Charlottesville is immune to the rampant commercialism of larger cities, and think there should be carefully considered regulations when it comes to how many properties a host can own and rent out.

“If one person starts buying up houses in residential neighborhoods to use as transient lodging facilities, we’ll end up with real gaps in the neighborhood,” Vice Mayor Kristin Szakos said after the meeting. “That happens in some communities that are very tourist-driven, and it’s in the range of possible.”   

Szakos said she herself uses Airbnb when she travels, and she wants to support it in her own town.

“Transient lodging certainly meets a need in the market,” she said. “I personally tend to favor regulation, but I don’t want it to be so onerous that we shut it down.”

On the other hand, Szakos said, Charlottesville is kind of in a league of its own.

“Places like Portland, Austin, Madison, that either have colleges or are just places that people want to go—they’re a lot bigger than we are,” Szakos said. “Most places our size don’t have this problem because people aren’t trying to go there. We have to be careful about finding a community that has the same issues we do, and we don’t know if we’ve gotten that.”

Debra Weiss, a homeowner who rents her detached city property—which she calls The Recycled House, because it’s made entirely from refurbished materials—doesn’t think Charlottesville is at risk of being overrun by real estate moguls who just want to rent entire streets of houses out to short-term travelers.

“Nobody’s getting rich off Airbnb,” Weiss said. “It’s fear-mongering, and I think they jump to conclusions that aren’t applicable to our town. I think that this short-term rental thing is fantastic for so many reasons.” 

Weiss said she has a business license for her rental property, and she happily pays the 6 percent lodging tax to the city.

“I want people to be reasonable,” she said. “So far it seems to be working. Once the city figures out exactly how they want to tax it and make money, and they make everybody comply, I’m down with that. I don’t want to sneak around or do it in secret. But I don’t want anyone telling me I can’t.” 

Other Airbnb hosts, like Olive Platts-Mills and his wife Natasha Sienitsky, a former planning commissioner, have reached out to the city to share their own experiences and suggestions. The couple, who have used the website both as hosts and travelers, sent an e-mail to City Council in January, urging members to consider fair regulations that won’t harm the industry.

“Local regulations should be easy for residents to locate, understand and comply with,” they wrote. “Registration requirements should establish a reliable way for local authorities and neighbors to identify and contact the short-term rental owners, not used as a tool for limiting short-term rentals. To encourage registration, the fees should be minimal and should not be applicable to those who rent their homes below a certain threshold.”

So what happens next? After a lengthy discussion January 20, Council lobbed the issue back to the Planning Commission, agreeing that more research needs to be done before making any changes to the zoning ordinance. The commission will hold a work session on Tuesday, February 24, and a community open house on the issue will be held at the Water Street Center two days later.

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