After years of back-and-forth, the city has finalized its plan to address its short-term rental requirements — a unanimous vote that comes with stricter restrictions that have left some disappointed with the outcome.
The decision comes after a months-long delegation from the city’s planning and zoning department ultimately ruled in favor of 12 short-term rental regulations.
These regulations include such factors as parking, proper signage, room and renter limits. However, the one requirement that has caused the most upset, and brought numerous folks from both sides of the aisle out to speak during public comment, includes the owner occupancy clause.
People are also reading…
As written, it states that hosts cannot operate a short-term rental, less than 30 days, on property that is not their primary residence, and they must live on or in the property for a minimum of 185 days a year.
For Richmond resident Terricina St. Clair, who co-hosts a home in the 4th District, the decision will hurt her business.
“Ninety percent of Airbnb hosts that host in the city of Richmond will lose their opportunity to host if they have to have un-hosted stays,” St. Clair said. “That’s my biggest concern. This is my livelihood and it’s the livelihood of a lot of short-term rental hosts in the city.”
On the other side of the table sit several homeowner associations that argue that short-term rentals are destroying neighborhoods as people buy up housing stock.
Housing broker Robin Levy addressed the council in favor of the ordinance, citing the ongoing impacts of the current housing market and its downfalls.
“A healthy market has six months of inventory. We have less than one month right now. So we’re struggling with inventory issues, which is driving prices up,” Levy said. “Taking away the (primary residence requirement) is a horrible idea.”
A need to protect housing stock
While intended to keep outside developers from buying up housing stock and raising housing and rent prices, the clause has stirred up issues regarding enforcement, infrastructure and property owner rights, with many fearing local business owners are being left behind.
With the new ordinance in place, Airbnb operators will have to either rent out a room in their home or they will have to build or transform an accessory dwelling unit to comply.
The approved ordinance has left many unhappy with the decision as it will affect their bottom dollar. If they would like to operate a property in the city that is not their primary residence, they will have to rent it out for more than 30 days, which will have lasting effects.
AirDNA, which compiles worldwide short-term rental data analytics, reports that Richmond’s average per night rate is $172. However, a one-month stay averages $1,500, and a three-month stay averages $1,200 per month.
If an operator were to rent out their property for $172 a night for 20 days out of a month, their profits would increase by nearly 130% for one month and 287% for three months.
However, Andreas Addison, 2nd District representative on the Richmond City Council, said the need to protect housing stock is worth the limitations it might place on rental operators.
“It’s not perfect, but it’s really good,” Addison said. “It’s not going to make everybody happy. That’s not the point. The point is that we’re putting forth the regulation that’s going to put in place a way to protect and preserve our neighborhoods for encroaching outside development.”
According to a 2020 study conducted by the University of Southern California, the purchase of vacation homes across the country exceeded the growth of existing home sales by more than 40% from the previous year.
Additionally, the Economic Policy Institute reported in 2019 that the economic costs associated with Airbnb likely outweigh the benefits as housing and rental prices increase, causing price gouging and relocation of community members because they can no longer afford to live in their respective neighborhoods — a phenomenon economists have coined “The Airbnb Effect” with many likening it to gentrification.
In 2020, the City Council unanimously voted to undertake three major zoning changes to address problem areas. These included eliminating parking minimums, permitting accessory dwellings and revising its short-term rental regulations.
The decision to change its short-term rental regulations came after numerous people came forward to discuss the impracticality of the current regulations. While operators pushed for fewer rules, others expressed the importance of protecting neighborhoods and the citizens who inhabit them.
Underlying, bigger-picture problems, like affordable housing, have served as a guiding rod for the planning department which, ultimately, has to find solutions to accommodate all parties involved.
1,100 known short-term rentals
After months of planning and public input, Kevin Vonck, director of Planning and Development Review, presented the department’s recommendations to the Planning Commission in early September.
The newly approved changes include two additional amendments that increase the maximum number of guests to 10 and adjust the owner occupancy requirement to include that the short-term rental must be located in the primary residence of the person who manages the day-to-day operations. The primary residence will be determined by DMV or the Office of the Registrar of the City of Richmond records.
As the city moves forward with the ordinance, questions have popped up as to how the ordinance will be enforced.
Currently, roughly 1,100 known short-term rentals are operating within city limits. But Vonck reported that the department has issued fewer than 100 permits.
Council member Ann-Frances Lambert admitted that she, too, has operated her own Airbnb illegally.
“We still don’t have a regulation. I know I was not in compliance. There’s a lot of Airbnb operators that aren’t in compliance,” Lambert said during a September Planning Commission meeting public comment period.
With no enforcement measures in place, there is little incentive for operators to comply with the city’s regulations. While hundreds are operating illegally, it does not impact tax revenue as Airbnb collects local and state tax charges directly from consumers, separate from operators, and reports them to the city’s finance department.
According to Vonck, there have been several compromises made to ensure operators can still operate in the city, including eliminating occupancy requirements in commercially zoned areas.
Additionally, the city approved an ordinance that allows by-right accessory dwelling units to be built on single-family home plots. Accessory dwelling units are smaller housing spaces usually located separately on a property. These typically are called mother-in-law suites.
So with the ordinance change, it is easier for homeowners to renovate existing garages or build them on their property to serve as housing. The goal is to expand affordable housing and, if people decide to rent them out as a short-term rental, they can all within the city’s guidelines.
Em Holter (804) 649-6178