Getting rights to operate an Airbnb or Vrbo in Virginia Beach isn’t ‘a very equitable or fair process,’ some argue

Virginia Beach

VIRGINIA BEACH, Va. (WAVY) — Some of those looking to legally operate short-term rentals in Virginia Beach say the current process is not “fair” and the city’s proposed changes aren’t much better.

The Virginia Beach Planning Commission recently recommended that City Council approve new regulations that would greatly limit which communities are allowed to have home rentals for less than 30 days. They also advised limits be placed on how many property owners within a particular community would be allowed to operate a short-term rental.

This is just the latest set of rules to be debated when it comes to short-term rentals. Since 2015, City Council has lamented over how to regulate the growing industry.

Property owners in the tourist town can make extra money by renting their properties through sites like Airbnb and Vrbo to vacationers who prefer homes over hotels. However, those owning homes in coastal communities and not interested in renting have complained that the constant flow of strangers coming and going is disruptive. 

Finding an agreeable balance has improved nearly impossible.

“This is by far, in terms of stress, the hardest issue,” said Councilman Guy Tower (Beach District) who has been one of those leading the effort to further regulate short-term rentals. “There are people in neighborhoods that when they bought, they didn’t expect to have short-term rentals to deal with.”

Within the last month, outrage over the issue from some homeowners in the North End boiled over after gunshots were fired at a party outside an unregulated short-term rental.

However, advocates for short-term rentals argue one bad property owner or manager shouldn’t ruin things for everyone else.

Equitable process?

Scott Westfall, a broker for CGP Real Estate, said he was contacted late last year by Bao Lo following Lo’s purchase of a more than 4,600-square-foot, three-floor, four-bedroom home off 25th Street in the Old Beach neighborhood near the Oceanfront.

Westfall said Lo and his family still live in northern Virginia but frequently visit Virginia Beach and bought the property with plans to retire in it.

In the meantime, he had hoped to rent it to vacationers.

“It’s kind of been their dream to own their own property that they could one day retire in and also share with other people and share the experience they have been given the last 10 years,” Westfall said.

Westfall was hired to help Lo through the process of being able to rent to home legally. Under the latest rules passed by City Council in 2019 to manage rentals, that meant Lo would have to obtain a conditional use permit (CUP).

The permit holds the property owner to specific operating rules and regulations.

The city planning department recommended that the Planning Commission recommend City Council approve Lo’s application.

His property had enough parking in the driveway for up to four vehicles and Lo told city planners he would abide by added restrictions that bar special events, limit overnight occupancy to no more than two people per bedroom and only one booking per seven-day period.

Westfall would be the property manager and agreed to respond within 30 minutes of any issues.

“It met all of the requirements of what was in place.” Westfall said.

Yet, the Planning Commission by a 6-4 vote and the City Council by a 10-0 vote denied his application.

Four letters in opposition were submitted, one each from Lo’s direct neighbors. They were concerned about the large home attracting out-of-town partiers — as well as the fear of constant people coming-and-going changing the character of the historic Old Beach community.

Westfall said what discouraged Lo the most is the fact that City Council approved an application in the Old Beach community several weeks before, and the house that backs up to his is currently marketing itself as a short-term rental.

“In my opinion, it is not fair,” Westfall said. “[Lo] doesn’t feel it’s a very equitable or fair process in the way the City Council has gone about just addressing each of these applications… [Lo] owns this property he would love to use it how’d he’d like. He wants to be a part of this neighborhood. He has no intentions of upsetting any of his neighbors.”

However, Tower, who represents the Old Beach District, countered that nobody should be convinced they will automatically receive approval.

“That was never the intention. It was always a discretionary thing with the council, that if there were too many in an area or they didn’t feel too comfortable with an operator or any of those,” Tower said.

An analysis completed by 10 On Your Side found that City Council denied 17% of the short-term rental applications brought before them in 2020. The highest percentage of denials were located in the Bayside district that includes the west side of Shore Drive on the Chesapeake Bay.

As application hearings pushed City Council meetings late into the night, Tower along with Vice Mayor Jim Wood (Lynnhaven District) and Councilman Louis Jones (Bayside) proposed another new way of doing things.

Early bird gets the worm

The latest proposal to regulate short-term rentals will be in front of City Council on April 20.

The Virginia Beach Planning Commission has amended Wood, Jones and Tower’s proposal to limit short-term rentals to the communities of Sandbridge, the resort area of Oceanfront, parts of the North End, and roughly 23 blocks north of Shore Drive, east of the Lynnhaven Inlet.

The communities were chosen as they have historically hosted vacationers and short-term rentals would likely not greatly change the neighborhood dynamic.

In Sandbridge and in the resort area, CUPs will no longer be required for a person to have a short-term rental as long as they live within the set boundaries. That means a person could begin operating after receiving just planning department approval. They would be allowed to have up to two rentals in a given week.

In the North End and Shore Drive area, short-term rentals would only be allowed by CUP still with one rental per seven days. No more applications will be approved once 10.6% of homes in the North End community and 11.5% of homes in the Shore Drive community have permits.

Those who are currently operating short-term rentals outside the specific communities would have their CUP “reviewed” for violations every five years. If violations of the regulations are found, City Council could revoke the permit.

None of this applies to property owners that were already operating and up-to-date and registered with the Commissioner of the Revenue’s Office prior to July 1, 2018. In which case, they never needed a CUP.

A view of the proposed Oceanfront boundaries for short-term rentals (City of Virginia Beach)

Critics of the plan say the latest proposal makes it so that only those who started operating short-term rentals early on will get to keep operating.

Tower said, in a sense, “the early bird will get the worm.”

As of April, the city estimates 2,700 properties in the city are operating as short-term rentals. All those operators are required to pay city and state taxes just like hotels, motels and bed-and-breakfasts.

Those found not operating “legally” can face a fine of up to $200 for the first offense and $500 for any additional.

Under the new proposal, the difference between “legal” and “illegal” could depend solely on what side of the street your property is on.

When asked if that was fair, Wood responded “it is what it is.”

Planning Director Bobby Tajan said his department is currently paying for an outside company to track who is operating without a permit.

Following several council members’ push for more enforcement of short-term rentals, Tajan is proposing a $150 to $200 yearly user fee for short-term rental operators in order to help pay for the outside vendor, staff a 24/7 “in-person” hotline for people to call into with complaints and hire part-time inspectors.

“We need to get boots on the ground,” Tajan said. “Help put the citizens at ease that aren’t operating … that the city’s out there, and also operators know we are keeping an eye on them.”

Tower insisted that whatever decided could still be altered if they find it’s not working.

Westfall thinks the whole ordeal might just hurt the city in the long run.

“When my wife and I travel, half the time we stay in Airbnbs, and half the time we stay in hotels,” Westfall said. “But travel is moving towards Airbnbs, and if there is not that type of housing, we are going to start losing tourists and tourism dollars.”

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