Lawmakers, residents call for more regulations on short-term rentals

Panelists discuss the Airbnb law (from the left): Mason Hills Citizens Association President Mike Rioux, code compliance official Elizabeth Perry, zoning administrator Leslie Johnson, Del. Kaye Kory, and Sen. Dick Saslaw,

Local residents who attended a meeting on short-term rentals Oct. 5 raised concerns about homeowners filling up their homes with transients, leading to declining quality of life, problems with noise and trash, reduced property values, and the potential for attracting undesirable elements like drug dealers and sex offenders.

The meeting, hosted by the Mason District Council, was all about how the state and local governments can regulate short-term rentals booked through Airbnb and similar online platforms. Well over a hundred residents packed the cafeteria at Sleepy Hollow Elementary School to learn more about the Airbnb trend.

The Limited Residential Lodging Act (SB416), passed by the Virginia General Assembly in April, allows people to rent out a room or their entire primary residence for up to 30 consecutive days. Localities would not be allowed to prohibit short-term rentals, but could require homeowners to register with the local government, have at least $500,000 of liability insurance, and pay all applicable taxes.

Regulations needed 

The legislation was passed with a “re-enactment clause,” which means it has to be passed again because regulations need to be drafted before it can take effect. The General Assembly formed a study group to recommend whether the bill should modified and heard in the 2017 session or dropped.

Coming up with a solution will require balancing the rights of property owners with the need to maintain safe, stable neighborhoods.

It’s not realistic to try to totally ban short-term rentals, said Sen. Dick Saslaw. “People supported the law because they felt some sort of regulation is better than nothing.”

Currently there are no laws in Virginia regulating short-term rentals, and according to a U.S. Supreme Court ruling involving Amazon, states can’t regulate online businesses that don’t have a bricks-and-mortar presence in the state, Saslaw said.

Counties and cities in Virginia can ban short-term rentals, but those ordinances aren’t easy to enforce, he said.

Fairfax County’s occupancy limits “are pretty hard to enforce,” Saslaw said. “If you can’t do that, how are you going to enforce something that’s less visible?”

Rather than banning short-term rentals outright, he suggested a better strategy is imposing regulations, such as requiring homeowners who use Airbnb to have a business license.

Empowering HOAs

While homeowner associations can regulate short-term rentals, it’s difficult for them to get a quorum to change their bylaws, said Sen. Dave Marsden. He said HOAs need more flexibility so they can have more control over what goes on in their communities.

Marsden has heard from people with financial difficulties who have moved out of their homes so they can earn some money renting their home through Airbnb. They have the right to do that, but “it doesn’t mean you can disrupt your neighbors and threaten their safety,” he said.

Del. Kaye Kory, who called for the meeting, said she didn’t support the bill because it prohibited localities from setting strong enough regulations.

If the General Assembly enacts the bill, “life will change for everyone in this room,” said Mike Rioux, president of the Mason Hills Citizens Association in Alexandria, which supports a draft resolution calling for stronger restrictions on short-term rentals.

“People are trying to make a lot of money with this. They are buying properties just to do short-term rentals,” Rioux said. “It’s gone up 400 percent in the Mount Vernon District. It’s exploding.”

At one point, he saw 10 trucks on his street and discovered a neighbor had rented his house through Airbnb to a film crew that was using it as a setting for a TV commercial. The owner bought the property to rent out via Airbnb, Rioux said. It wasn’t his primary residence.

The Mason Hills resolution would require any homeowner that rents accommodations for more than 15 days a year to register as a business and have commercial business insurance. It would require Airbnb and other platforms or the host to pay taxes on rentals and would allow HOAs to impose further restrictions.

The resolution will be presented to the Mount Vernon Council of Citizens Associations, the Fairfax Federation of Citizens Associations, and the Fairfax County Board of Supervisors.

Edward Mullin, an attorney with Reed Smith who is representing Airbnb, said the company prefers state regulations rather than having to deal with separate regulations in every city and county in Virginia

Airnbn would collect taxes from homeowners, send the tax revenue to the state, and the state would reimburse localities, Smith proposed. “Now local governments get nothing. Counties need and should get this money.”

The only way the county can collect taxes on this is by cooperating with the platform companies, Saslaw said. He would like to require anyone who does a short-term rental for more than three or four days a year to get a business license, then persuade Airbnb to ban prospective hosts who don’t have a license.

Difficult to enforce

Leslie Johnson, Fairfax County zoning administrator, said she has some concerns with the legislation, including the lack of an occupancy limit.

The county ordinance currently allows up to four unrelated people or a family plus two unrelated people in a single-family dwelling unit.

“It’s one thing to live in your unit and rent out an extra bedroom. It’s very different from turning your home into a commercial enterprise,” Johnson said.

The county currently does not permit short-term rentals, she noted. Transient occupancy of less than 30 days is not allowed. The only exception is bed and breakfasts, which are permitted in certain types of residential zones. Establishing a B&B requires public hearings, and the BoS must approve a special exception.

Elizabeth Perry, of the Department of Code Compliance, said there are only about six open cases in the county involving complaints about short-term rentals. Most of the complaints to the department have been resolved through voluntary compliance, and in other cases, DCC hasn’t been able to collect enough evidence to pursue the case in court.

As this is an emerging issue, DCC is still trying to figure out how to investigate complaints about short-term rentals. Staff needs training on this, she said.

The Board of Supervisors opposed the state law in the last session, said Mason Supervisor Penny Gross. A proposal calling for homeowners that participate in short-term rentals be to licensed, among other things, is included in the board’s draft legislative agenda for 2017.

The BoS will hold a public hearing on its legislative package on Nov. 1 and will vote on it Dec. 6.

Virginia is a property rights state and the state Supreme Court is very conservative, Saslaw said, so if the state enacts an overly restrictive law, a homeowner could end up winning in court and the law would be overturned.

“There’s a growing movement in the state against regulations that restrict entrepreneurship,” Marsden added. “Legislators from other areas will react negatively if we push the envelope too far. This has to be done in a careful, artful way.”