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Regulation of Short Term Rentals Norfolk City Council May 8, 2018
Regulation of
Short Term RentalsNorfolk City Council
May 8, 2018
Winter 2016 – General Assemblyo No locality could restrict short term rentals
o Same bill had to pass in 2017
June 16, 2016 – City Councilo Recommend continuing prohibition
o Recommend working to get “good neighbor” legislation
Summer 2017 – Chapter 741 (Senate Bill 1578)o Localities can require registration
July 11, 2017 – City Councilo Consider regulations for
• Homestays
• Vacation homes
History
July, 2017o City Manager tasks Neighborhood Action Team (NAT) to analyze
the issue
August-September, 2017o Neighborhood Action Team sets up STR subcommittee
• Planning
• Neighborhood Quality
• Police
• Fire
• ODU
• Health Department
• Commonwealth’s Attorney
o STR subcommittee completes research and recommends
allowing activity: “carrot & stick” approach
History
November 11 & 13, 2017
o Town Halls (Pretlow Library and Virginia Arts Festival)
o High turnout of STR supporters
March 1, 2018
o New Zoning Ordinance• Only permitted in single-family dwellings in R-C (Residential
Coastal) district
• Requires CUP from City Council
History
Analysis
The Market
o Airbnb in Norfolk = 279 listings 1
o VRBO (Homeaway) in Norfolk = 10 listings 1
o Flipkey (Tripadvisor) in Norfolk = 1 listing 1
o Average annual revenue per operator for Airbnb in Norfolk =
$5,700 2
o Average stay is 2 nights 2
o 8% occupancy tax = $456
o $2.00 Room night tax = $225 3
o With 150 active hosts, annual tax revenue from Airbnb would be
± $100,000 4
1 Search performed May 7, 2018, 2 adult guests, rental on June 29 for 2 nights2 Source: Airbnb, letter from Brandon K. Hatton to Mayor Alexander (Jul. 18, 2017)3 Assuming avg. rate of $100/night4 Assuming 100% host compliance
Looked at other localities
Analysis
o Annapolis, MD
o Austin, TX
o Charleston, SC
o Chicago, IL
o Louisville, KY
o Memphis, TN
o Portland, OR
o Santa Monica, CA
o Albemarle (County)
o Arlington (County)
o Bedford (County)
o Blacksburg (Town)
o Botetourt (County)
o Charlottesville (City)
o Roanoke (City)
o Warren (County)
o Williamsburg (City)
Analysis
Registry alone is not a solution
o STR operations occurring now, with no permitting
o Prohibition does not result in preventing the activity
o Registration only presents a burden for:• Lawful operators
• Unlawful operators who get caught
o Registry authorized by 2017 legislation has many exemptions
o Mandatory registration has low compliance in other cities
Enforcement alone is not a solution
o Current prohibition has not prevented the activity
o Additional enforcement might result in less activity
o Unlikely that the activity can be stopped entirely
o Del. Knight (Va. Beach-Ches.) introduced HB824:• Prohibit Lexington from regulating any stays longer than 30 days
• Prohibit Lexington from requiring a business license or BPOL taxes
• Declare that SRT in Sandbridge is a “principal use” subject to
applicable City of Va. Beach regulations
Analysis
A Cautionary Taleo Localities have generally taken a permissive approach
o Lexington adopted a new zoning ordinance in Oct. 2017
o Regulated short term rentals:• Inspections
• Permit and business license required
• Parking rules
• Contact person
• Taxes
Analysis
Subcommittee identifies “carrot & stick” approach
o Work with the market• Enable good operators
• Discourage bad operators
• Retain control to stop operators that start good but turn bad
o Make it easy to operate in the open• Free registration
• By right operation with registration
o Enhance enforcement and impose monetary penalties• Search out illegal operations using online resources
• Impose penalties for zoning violations
o Level the playing field with other transient occupancy
businesses
o Do not overregulate and invite a “fix” from the General
Assembly
Proposal
Homestay
o Allowed by right citywide
o Owner must be present
o Zoning Certificate required• Not allowed where an Accessory Dwelling Unit (ADU) already
exists on the property
o Max. Occupancy = 2 guests per bedroom
o Max. Length of Stay = 29 days (per guest per year)
o If a boarder resides in the home, one bedroom must be set aside
for each boarder (maximum of 2)
o Business license and transient occupancy taxes required
Proposal
Vacation Home
o Allowed in two ways:• By Zoning Certificate, if operator registers
• By Conditional Use Permit (CUP)
o Specific operational conditions imposed as part of the
Certificate or CUP• Off-street parking spaces required (1 per br.)
• In-town manager on call
• Fire inspection
• Posting of City ordinances on noise, trash pick-up, etc.
conspicuously in guest areas
• Max. occupancy
• Expires in 1 year
o Max. Length of Stay = 29 days
o Business license and transient occupancy taxes required
Proposal
Registration
o Not required – optional
o Information to be submitted by operators who register:
• Name of operator
• 24-hour emergency contact
• Annual fire inspection (no charge)
• Operator keeps log of stays and guests
• Provide proof of liability insurance
• Identify number of bedrooms available to guests
• Identify adequate parking (1 space per guest br.)
• Valid for one year (must renew annually)
o Benefits• “Norfolk Registered” badge appears on listing
• Vacation Homes not required to secure CUP
• Listed on City website: “Norfolk Registered”
Proposal
The 3-part Approach
o Create the opportunity to operate legally• Including neighborhood protection rules for Vacation Homes
o Set up a Registry• Enable open, lawful, safe operations
o Increase Enforcement• Help good operators crowd bad operators out of the market
• Protect neighborhoods
• Maximize operator revenues = maximize tax revenues
