VIRGINIA BEACH, Va. (WAVY) — After years of debate, new rules regulating Airbnbs and other short-term rentals go into effect Friday.
Virginia Beach City Council approved the rules in January. Short-term rentals, which are defined as “dwellings” in which rooms or the entire unit is rented for fewer than 30 days, now have to be registered with the city to operate legally. They are required to pay city and state taxes just like hotels, motels and bed & breakfasts.
In addition, a short-term rental must have one off-street parking space per bedroom, no more than two rental groups in the home per week and no more than three people per bedroom in the home overnight, among other requirements.
The City of Virginia Beach has sent letters to all property owners that have identified as doing business as a short-term rental to remind them of the changes. The Commissioner of the Revenue’s Office has determined there are about 200 properties not yet registered, per city spokeswoman Julie Hill.
According to officials there are about 2,500 short-term rentals currently in properties in Virginia Beach.
The number of rentals has grown exponentially over the past five years.
For example, 2014 saw 2% percent growth of these types of properties. Then in 2016, a 300% growth. Experts say companies like Airbnb have made the rental property business much more approachable in recent years.
“Renting out your home can enable you to pay your entire mortgage in months and actually turn a profit,” explained Chase Harper with Harper Brothers Holdings. “Which is just a totally new business model that hasn’t been feasible for a lot of home owners who want to get into the rental game. It’s a real easy way to make that transition and kind of get your feet in the water and try it out.”
The industry continues to grow every year, which is why the commissioner of revenue says he asked the city to figure out a way to regulate the growing industry.
The new regulations will be easier for some to comply with more than others.
“I’ve got the parking, so the parking isn’t a concern. The bedrooms are not a concern. But I can definitely see how other homes along this street that don’t have as much parking behind the house as we have here could definitely be a hindrance,” Harper said.
This mostly affects rentals run by individuals. City officials explain this involves 900 of the city’s 2,500 short term rental properties. Those properties previously were not taxed by the city or the state. Officials say this will bring in an estimated $1.2 million in additional revenue to the city.
The resort city isn’t the only one looking to crack down on the industry. Norfolk has identified that only 39 of the nearly 500 short-term rentals currently operating in city have registered.
In a memo from the City Manager’s Office, council was told that if even half the operators register, the city would stand to collect between $363,711 and $472,903 in taxes and fees per year.