Staying Power: County Considers Tightening Rules for Short-Term Rentals

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Homestays (such as “Airbnbs”) could become more regulated in Albemarle.

Suppose you find yourself with some unused living space in your house, perhaps due to kids moving out or other life changes. If you’d like to rent out an extra bedroom or two, an accessory structure like a garage apartment, or even the entire house for a period of less than 30 days, those activities are called “homestays” and they are regulated by the county. The Albemarle Planning Commission (PC) and Board of Supervisors (BOS) are currently considering an overhaul of the homestay rules, even as many residents may be unaware of, or choose not to follow, the rules as they now stand.

Sarah Tremaine relies on the short-term rental space in her house near Crozet to be able to pursue her work as a fiber artist. “I have an art studio in my house, and [my homestay] is a way I generate income to support my business,” she said. Tremaine offers guests a bedroom/living area, bath, and mini-kitchen, along with expansive mountain views, and says the flexibility of the arrangement works well for her. “I’ve had really great luck with renters, and if I have a big project deadline I just block off the calendar.”

Sarah Tremaine’s short-term homestay rental is a bed, bath, and mini-kitchen in her house in the rural area between Crozet and White Hall. Submitted photo.

The homestay business can be lucrative for homeowners who don’t mind hosting strangers. From a single bedroom and bath rental to an entire large house with private grounds, listings tagged on one popular lodging website as being in or near Crozet ranged from $35 to $800 per night. Led by the convenience of online booking through sites like Airbnb and VRBO, homestays are widely popular both in the U.S. and around the world, and are attracting increased government scrutiny as they vie with the regulated hotel industry for visitor dollars. 

In Albemarle, interest in hosting is on the rise. Between 1985 and 2010, applications to the county for short-term rental approvals averaged only 1 to 2 per year, but since 2011 applications have increased sharply, numbering 22 in 2017. Requests to open homestays in residential areas (as opposed to the rural area) were almost nonexistent before 2014, but make up one-third of the 2017 applications. Current zoning regulations require that the homeowner go through a zoning approval process, acquire a business license, and pay a 5 percent “transient occupancy” tax on gross rental income.

“With the homestay regulations, we are trying to figure out what is the best fit for the community that balances people’s desire to use the accessory areas of their homes for homestays while also retaining the neighborhood character and minimizing the effects on neighbors’ uses of their own property,” said county Director of Zoning Amelia McCulley.

To achieve this balance, current county rules strictly forbid renting out an entire house or an attached dwelling such as a townhouse or apartment anywhere in the county. An accessory structure such as a carriage or guesthouse may be used for homestays only in the rural area, i.e., not in the residential or designated growth areas of Crozet. In all cases, to protect the tranquility of neighborhoods, a homeowner or manager must reside on the parcel and be present during the rental.

Home Alone

Non-compliance is pervasive. A quick survey of a sampling of homestays offered in and around Crozet based on publicly available information revealed zero compliant listings, mostly due to obvious violations such as a whole-house rental located in a residential neighborhood. A more comprehensive look at all listings within a five-mile radius of Crozet produced only a 40 percent compliance rate, even given the assumption that the homeowner is duly registered and always on site.

At present, enforcement of the homestay rules is solely complaint-based, due to a lack of staff available to investigate each of the hundreds of listings county-wide. While relatively rare in the past, formal complaint rates and informal inquiries are rising along with the recent increase in short-term rentals. “We get a lot of calls where people are asking questions about what’s allowable in cases where they have an issue with a neighboring rental that they’re trying to deal with,” said Bart Svoboda, Chief of Zoning for the county. 

White Hall District BOS representative Ann Mallek wants the board to take a firm stance on the issue. “When we create a situation where neighbor is pitted against neighbor because the county won’t do its own enforcement, that is a real problem,” she said. Beyond the lost tax revenue from unregistered rentals, which she suspects must be in the tens of thousands of dollars, Mallek feels that allowing unpermitted homestays to continue and proliferate is dangerous to communities.

“You have people who come into a community and buy houses, spiff them up to rent out and don’t even live there, which is absolutely illegal,” said Mallek. “The impact on affordable housing where this has been allowed has been dramatic.” She finds the sheer risk that non-compliant owners are taking to be “shocking.” “If a homeowner is using their property in a way which is unpermitted and illegal, and a renter gets drunk and falls off a balcony or starts a fire, none of their insurance is going to cover the loss. At that point it becomes the owner’s personal liability.”

County zoning officials voice similar concerns from a community health and safety perspective. “An unpermitted homestay may not have had fire or health inspections, and hasn’t been reviewed for compliance with land-use regulations,” said McCulley. “Beyond these issues, there should be parity with other homestays and inns in the area, so that everyone in the market is on a level playing field.”

While none of the non-compliant local homestay owners were willing to speak on the record for this story, their positions mirror those of other homeowner groups across Virginia who are fighting homestay ordinances. In Fairfax County, one citizen group is suing its Board of Supervisors over rules such as the requirement that operators be permanent residents on the homestay parcel, saying those rules exceed the authorities explicitly granted by the state. (In 2017, the Virginia General Assembly passed a law allowing localities to establish an annual short-term rental registry requirement for operators, which has inspired many Virginia jurisdictions to re-assess their ordinances.)

Crozet’s realtor community is especially aware of the impact of out-of-town visitors on Crozet’s economic health. “From my perspective, tourism is great for this area and really helps support local businesses,” said Nest Realty’s Dawn Cromer. “When people come for a wedding or to tour the wineries or hike the trails, they eat at Crozet restaurants and shop at our stores, and having places available for them to stay is key to that cycle, especially since we don’t have a hotel here.”

House Rules

County officials have been working for almost two years on an update of the homestay rules, with the oft-conflicting goals of protecting rural character, promoting economic prosperity, addressing community complaints, and bringing existing homestays into compliance. The differences between the current and proposed rules form a complex matrix, as the nearby table illustrates, but on balance, the proposed rule changes are more restrictive, not less.

One significant change is a split of the “rural area” designation into two categories based on size: “under 5 acres” and “5 acres or greater.” In addition to new requirements that mandate an annual registration and safety inspection for all rentals, residential and smaller rural properties would be limited to two guest rooms (down from five), rural structures used for homestays would have to have a 125-foot setback from abutting lots, and (detached) accessory structures would no longer be allowed for homestays on smaller rural lots. While a whole house rental would be newly allowed for larger rural lots, it could be rented out only for a maximum of 45 days per year. 

Svoboda says the new rules will include a grandfather clause. “If you are properly permitted now, these regulations would not prohibit you from doing what you already have approval for.” He stressed that an ordinance is a “living, breathing document” that can be altered as circumstances evolve. “Some think that once it’s adopted it never changes, but an ordinance has to be able to adapt to changes in conditions, stakeholders, and other factors.”

Current and Proposed Homestay Regulations (as of January 2019). Proposed changes highlighted in red. Source: Albemarle County Community Development.

Thus far, many homeowners don’t see the proposed changes as an improvement. “Whose life are they really making easier?” asked Tremaine. “I can’t see how creating another layer of requirements is going to be less expensive or take me less time. I already have to file [the transient occupancy tax form] every month, which is crazy for the tiny amounts we’re talking about.” Even so, Tremaine, whose homestay complies with the current ordinance, admits there are plenty of others who choose to ignore it. “Sure, people are pushing the rules, and they rent their whole house and are clearing $80,000 a year, and never report it.”

After almost a dozen work sessions and public hearings on the subject during 2017 and 2018, the Planning Commission is set for another work session February 12, followed by a public hearing on its recommendations in April, and consideration by the Board of Supervisors after that. While the BOS has gotten an earful from disgruntled neighbors, non- compliant homestay owners are unlikely to voice their opinions in open forum for fear of retribution. At least one supervisor is unsympathetic.

“If they’re not compliant, then they don’t have a voice,” said Mallek. “It’s not my job to make an allowance for somebody who is breaking the rules and let them get away with it. I feel strongly about the destructive nature of [these violations], and I’m horrified by the blasé attitude some people have about them. Homestays have the potential to ruin our communities if we don’t do this right.”

Crozet resident and Planning Commissioner Jennie More says the PC’s effort to balance homeowners’ and neighbors’ rights with safety, consistency, and economic growth has been a challenge. “Sometimes we find ourselves deep in the weeds, trying to foresee all of the possible scenarios and account for them, but at some point chasing all the “what-ifs” can send you down a rabbit hole,” said More. “When we take a step back, at the end of this process we want to create a set of expectations, and some limitations, so that [the ordinance] is done well.” 

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