Virginia legislation would limit local governments’ power over short-term rentals

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Supporters and opponents of short-term rentals have fiercely debated how they should be regulated in Hampton Roads, but legislation advancing in the General Assembly may soon limit local governments’ power over the growing industry.

SB 544, introduced by Sen. Lamont Bagby, D-Richmond, would prevent localities from implementing certain new short-term rental requirements. However, it would not overturn requirements already in place. Specifically, the bill says that no local ordinance enacted after December 31, 2023, shall require that a special exception, special use permit, or conditional use permit be obtained for the use of a residential dwelling as a short-term rental where the dwelling unit is also legally occupied by the property owner as his primary residence.

Bagby’s legislation passed the Senate on a 25-15 vote, and on Friday was reported from the House’s Counties, Cities and Towns Committee on a 13-9 vote. The legislation has not been a party-line issue thus far — both Democrats and Republicans have supported and opposed the legislation.

Neighboring residents often complain about short-term rentals — such as Airbnb or Vrbo — changing the character of a neighborhood and bringing noise and parking issues. Supporters have argued that having short-term rentals available gives homeowners an additional source of income and benefits the community by attracting more tourists — and their revenue — to the cities.

Bagby has said his legislation pertains to short-term rentals located on a homeowner’s primary residence. He said the legislation does not limit the ability for local government to use the conditional use or special use permit process for “properties whose primary use is short term, such as vacation homes or investment properties.”

The legislation drew backlash from representatives of various local governments, who did not want to lose their ability to regulate short-term rentals. However, short-term rental owners voiced support for the legislation, saying rentals allow them to “help others.” Some called the CUP application process “bureaucratic” and “very costly.”

Ron Jordan, a lobbyist representing Airbnb, said during a Senate committee meeting earlier this month the company found the conditional use/special use permit process to be “arbitrary, obtuse at times, and expensive and lengthy and, frankly, quite unfair.”

According to AirDNA — a short-term rental data provider — there are thousands of short-term rentals across Hampton Roads, including 243 active listings in Newport News, 710 in Hampton, 2,000 in Norfolk, 2,900 in Virginia Beach, 444 in Portsmouth, 269 in Chesapeake, 70 in Suffolk and 2,500 in Williamsburg. The company counts properties listed on Airbnb and Vrbo and defines available listings as those that had at least one day booked or available during the month.

This fall, numerous localities — including Hampton, Newport News and Virginia Beach — voiced support for maintaining local control over short-term rental regulation.

Virginia Beach is opposed to any short-term rental legislation that compels localities to allow short-term rentals and/or limits the abilities of localities to regulate them. The city currently has 2,699 short-term rentals registered with the Commissioner of Revenue.

SB544 originally allowed short-term rentals for homes that are a primary residence regardless of a locality’s zoning or planning rules. It was amended to grandfather any locality that had an ordinance in place already, which Virginia Beach does, but it would prohibit the city from changing its existing STR laws, “which really restricts our ability to continue to grow in this space,” said Brent McKenzie, the city’s legislative affairs liaison, during a discussion with council last week.

During Friday’s House committee meeting, Hampton’s Director of Community Development Bonnie Brown said the city opposed the legislation. She noted the city has spent the last two years with a community stakeholder process focused on short-term rentals and hopes to build on the city’s current short-term rental ordinances, which were adopted in 2022.

“We’re hoping to bring amendments forward soon to address the community sentiment around short-term rentals,” Brown told the committee. “We’re concerned that the bill language would impact our ability to amend our ordinance and so for that reason, we oppose it.”

Another bill somewhat connected to short-term rentals — SB 304, introduced Sen. Saddam Azlan Salim, D-Fairfax — won’t be revisited until 2025. The bill would have required localities to allow accessory dwelling units, or ADUs, in single-family residential zoning districts without requiring a special use permit. ADUs, which are sometimes used for short-term rentals, are an independent unit on a residential lot with its own living, bathroom, and kitchen space.

SB304 would have originally allowed any home zoned for residential to build an accessory dwelling unit by right without any local government authority or licensing. It was amended with some protections and standards and passed in the Senate 22-18. On Friday, the House’s Counties, Cities and Towns Committee decided to continue the legislation to 2025, to give Salim a chance to “fine-tune the language.”

Virginia Beach’s zoning officials are not fans of the SB304 as its currently written because it still takes authority away from the local government, said McKenzie.

The North Virginia Beach Civic League actively opposed the legislation.

“The localities should have the authority to determine where they are permitted by right or where they would be subject to a conditional use permit because of density, parking limitation or safety zone like around Oceana,” said Andrew Cohen, the civic league’s legislative affairs co-chair.

The group was specifically concerned about how an amendment to the bill would be applied to local short-term rental regulations.

The civic league lobbied for the ADU legislation to be continued until next year so that revisions can be made.

“We think that was the right solution and we look forward to participating in the process and improving on that bill,” Cohen said Friday afternoon.

Josh Janney, joshua.janney@virginiamedia.com

Stacy Parker, 757-222-5125, stacy.parker@pilotonline.com