Short Term Rentals VIRGINIA BEACH CITY COUNCIL NOVEMBER 7, Mark D. Stiles City Attorney

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1 Short Term Rentals VIRGINIA BEACH CITY COUNCIL NOVEMBER 7, 2017 Mark D. Stiles City Attorney

2 Overview Background Community Involvement Legislative History Alternatives for Consideration Next Steps 2

3 Background City is a tourist destination and multiple short-term* lodging options have historically been available: Hotels/Motels Bed and Breakfast Inns Country Inns Vacation Rentals in residential dwellings * The Commonwealth of Virginia defines a short-term rental as any lodging provided for a period of 30 consecutive days or less. 3

4 Background (cont d) City regulation of short-term lodging must address multiple public concerns: Public health, safety and welfare (building codes and inspections) Fair taxation (transient occupancy tax ( TOT )) Planning and zoning compatibility (zoning ordinance) While vacation rentals in residential structures is a long-standing practice, these short-term rentals are neither a permitted nor conditional use in the City Zoning Ordinance. The advent of online rental platforms (Airbnb, etc.) and the emergence of large single-family homes developed and/or increasingly utilized for the purpose of hosting large events have focused attention on zoning regulations. 4

5 Beaches & Waterways Commission By resolution dated April 19, 2016 City Council charged the Beaches & Waterways Commission with investigating and making recommendations regarding event houses. Between May 12 and July 27, 2016, Beaches & Waterways held several public meetings, including 5 public hearings at locations throughout the City. Proposed a draft ordinance designed to curb the potential disruption caused by event homes on the neighborhood in which they resided. 5

6 Recommendations: Beaches & Waterways Permit required for an event. 2 per year; Special event permit if more than 50 people, but no event shall have more than 100 people; Notification to all adjacent property owners of special events; Requirements for parking; liability insurance; employment of an offduty police officer; and a certification from building and zoning that the property is in compliance. Rentals need to be at least 7 days. These requirements covered many of the issues affecting short-term rentals - parking, trash, noise, etc. 6

7 Online Sharing Ad Hoc Committee By resolution dated August 16, 2016 City Council created the Online Sharing Ad Hoc Committee. Charged with investigating and making recommendations to City Council concerning: Legislation pending in the General Assembly in regard to short-term rentals; and City s regulation of short-term rentals. Met in September and October 2016, and presented their findings to City Council in November

8 Recommendations: Legislation Short-term rentals cannot be eliminated. Taxes should be paid to the locality. Require appropriate insurance coverage. Grant local authority to promulgate health and safety regulations. Protect the neighborhoods. 8

9 Recommendations: City Code Amendments Distinguish between daily less than 7 days and short-term 7 to 29 days. Registration with the Commissioner for taxes. A responsible party is required who can report in a reasonable time and has the authority to correct a situation. Maximum occupancy requirements. Parking on-site. Post text of applicable City Code provisions in the rental. Liability insurance of $1 million dollars. 9

10 Legislative History City Council adopted an ordinance in August of 2016 requiring that all shortterm rental properties be registered with the Commissioner of the Revenue and providing penalties for failure to register. Purpose: to facilitate identification of short-term rental properties and collection of transient occupancy tax. Properties represented by local real estate agencies and registered by those agencies exempted from new registration requirement. July 1, 2017 the local ordinance was amended to comply with the legislation passed by the General Assembly: Contact person should be named for each rental. Real estate professionals still exempt. Registration can be withdrawn. 10

11 Where Are We Today? The City has continued to meet with interested citizens and incorporate their input into the discussion; however, there is not a consensus about the best way to regulate short-term rentals. The three (3) alternate ordinances that follow include many of the recommendations that have come out of these public sessions. 11

12 Short-Term Rentals Alternatives for Consideration Distinguish Sharing From Short Term Rental Short Term Rental Overlay Districts (STROD) Grandfathering Provisions By Right Use CUP Required Short-Term Rental Ordinance Matrix Alternative 1 Alternative 2 Alternative 3 Sharing Yes No Yes Yes No Yes No No No Yes No Short Term Rental No, unless in STROD Yes, unless in STROD Sharing Yes No Short Term Rental No, unless previously paid TOT (grandfathered) Yes, unless previously paid TOT (grandfathered) Short Term Rental Accessory Use Registration Req. Yes Yes Yes Yes Yes Payment of TOT Yes Yes Yes Yes Yes Parking Must Be Provided On Site Post City Code Provisions Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Trash in Automated Bins Yes Yes Yes Yes Yes One rental contract per 7-day period Yes Yes Yes Yes Yes $1 Million Insurance Yes Yes Yes Yes Yes Maximum Occ. Limitation No Yes No Yes Yes Sign permitted No Yes No Yes Yes No Contact Person Req'd Yes Yes Yes Yes Yes Special Event Permit for groups > 50 (100 max.) (3 per year) No Yes No Yes Yes

13 Sharing vs. Short-Term Rental sharing. A dwelling in which a room or rooms are offered for rental for compensation for a period of thirty (30) consecutive days or less by an owner who utilizes the dwelling as his principal residence and occupies the dwelling during any such rental period. Short-term rental. A dwelling that does not meet the definition of home sharing in which a room or rooms, or the entire dwelling are rented for thirty (30) consecutive days or less for compensation. 13

14 Alternative 1 14

15 Alternative 2 Any short term rental that has paid transient occupancy taxes to the Commissioner of the Revenue prior to January 1, 2017 shall be considered grandfathered and shall not be required to obtain a Conditional Use Permit where otherwise required, but must meet the conditions of section Any expansion of the footprint of the dwelling housing the short term rental shall repeal the grandfathered status of the short term rental and require a conditional use permit for such use; 15

16 Alternative 3 16

17 Registration & Payment of TOT Sharing Short-Term Rental Occupation 17

18 Onsite Parking Sharing Short-Term Rental Occupation 18

19 Posting City Code Provisions Sharing Short-Term Rental Occupation 19

20 Refuse Requirement Sharing Short-Term Rental Occupation 20

21 Rental Period Sharing Short-Term Rental Occupation 21

22 Insurance Requirement Sharing Short-Term Rental Occupation 22

23 Occupancy Limitation Sharing Short-Term Rental Occupation No Limitation 23

24 Sign Use Sharing Short-Term Rental Occupation No Sign Permitted 24

25 Contact Requirement Sharing Short Term Rental & Occupation Sharing Short-Term Rental Occupation 25

26 Special Event Permit Requirement Sharing Short-Term Rental Occupation No Limitation 26

27 Next Steps If the 3 alternatives are referred to the Planning Commission today, the proposed schedule would be as follows: November 8 December 4 December 13 January 2, 2018 Planning Commission briefing Planning Commission workshop Planning Commission public hearing and vote City Council public hearing and vote 27

28 QUESTIONS COMMENTS