By Chris Teale (File photo)
Alexandria’s burgeoning Airbnb room rental market could become more regulated and structured under a bill making its way through the Virginia General Assembly.
With the 2017 legislative session reaching its closing weeks, a proposal requiring Airbnb hosts to register with local authorities and authorizes municipalities to charge room taxes on properties when occupied passed the state Senate and was referred to the House of Delegates last week.
The bill, introduced by state Senate Majority Leader Tommy Norment (R-3), passed the state Senate by a 36-4 margin on February 7. It then was referred to the House Committee on General Laws. The General Assembly had discussed legislation on Airbnb last year, but postponed it to 2017.
Hotel industry lobbyists praised the bill, and said it brings greater equity between traditional hotel rooms and Airbnb rentals.
“We are pleased with the outcome of the Senate’s vote today,” said Eric Terry, president of the Virginia Restaurant, Lodging and Travel Association, in a statement last week. “This brings us one step closer to creating a more uniform system for short-term rentals in a way that both best suits each community and simplifies tax collection. Legislation that upholds the authority of the local government and provides a reasonable system for registration and accountability is the right course for Virginia.”
Airbnb allows people to rent out single rooms or their entire homes to people on a short-term basis. Its use has grown nationwide and around the world since its founding in 2008, including in Alexandria. For example, on Monday, the website had 14 listings within the city limits for one guest staying for one night on Saturday.
Patricia Washington, president and CEO of tourism authority Visit Alexandria, said there are around 375 active Airbnb properties across the city, which she said is approximately 3 percent of hotel and short term rental accommodations.
Alexandria’s 2017 legislative agenda advocates requirements for hosts to register with the city, pay the appropriate taxes and comply with requirements under the zoning ordinance. At a city council meeting last month, Bernie Caton, the city’s top lobbyist in Richmond, said this bill takes care of all three factors.
Norment’s bill also incorporates a separate piece of legislation on short-term rentals by state Sen. William Stanley (R-20), which would allow localities to authorize Airbnb or prohibit it altogether. If localities allow it, the measure requires anybody with a rental to gain their neighbors’ approval first.
“If the neighbors don’t want it, then what?” asked City Councilor Del Pepper at the time. “Is there more to it? They can’t have it if the neighbors don’t want it?”
“The neighbors couldn’t prevent it, but the locality could prevent it and prohibit them altogether,” Caton replied. He said neighbors with complaints would have to take them to city council for resolution.
In an interview, Vice Mayor Justin Wilson said Alexandria’s main issue with Airbnb so far has been the impact on parking in residential areas. He said it can also affect housing affordability in two ways.
“You have residents who use Airbnb as a way to remain in their homes, so they’re renting out rooms and things like that so that they can keep paying their mortgage, so you have that side of it,” Wilson said. “But then you have investors who are buying up properties and making them essentially full-time Airbnbs. It drives up the prices in neighborhoods and really changes what is substantially a residential use into more of a commercial use, so there’s quality of life issues and things like that.”
But Washington said with no formal way of collecting taxes, Alexandria loses out on an estimated $400,000 in room taxes each year.
Currently, Airbnb collects and remits taxes on behalf of a host in 26 states and the District of Columbia. In those areas, the company has an agreement with the state to collect local taxes at the time of booking, then sends them to the applicable local tax authority for the host.
Washington said there must be a level playing field between Airbnb rentals and hotel room rentals to protect both the customer and the provider.
“To protect the integrity of the neighborhood and also to protect consumers who are purchasing these places, there needs to be adherence to the regulations that are already on the books related to safety and occupancy and [Americans with
Disabilities Act] requirements,” Washington said. “Just as hotels adhere to them, the Airbnb hosts need to adhere to those same rules and regulations.”
Wilson said the increase in Airbnb rentals is in keeping with the growth of the so-called “gig economy,” a labor market in which people use technology on a short-term basis to provide services to others. He pointed to the growth in the car-sharing applications Uber and Lyft over traditional taxis as additional evidence of these changes.
“You allow the use to develop, understanding what the issues are going to be and then try to regulate with as soft a touch as possible,” Wilson said. “In all these gig economy marketplaces, that’s what we’re seeing and that’s what driving this. Airbnb is in the same boat. We’ll see where we end up. I think it sounds like this bill gives us some authority to structure what’s right for our community.”