Five years after the state allowed localities to do so, the City of Richmond now has new rules in place to legalize the rental of short-term homes in the city, although not all rentals are permitted because they work today.
Richmond City Council on Monday passed the latest version of a proposal that has been around for years to allow Airbnb-style rentals in certain areas of the city, provided the rentals are registered and an operator’s primary residence, that is, the property where an operator resides for at least half of the year.
The primary residence requirement had been a point of contention for operators renting more than one property, as the new rules, which go into effect on July 1, would no longer allow them to do so. City officials say the requirement is necessary to prevent operators from buying multiple properties in residential neighborhoods and using them essentially as mini-hotels.
Describing the proposal as a starting point, officials said they would review it after a year to see how operators are performing and adjust the proposal if necessary.
The city would also have to decide whether rentals would be subject to the city’s transitional occupancy tax, which is not initially imposed on primary residence rentals. Officials said the reason is that the costs of enforcing the new rules are expected to exceed tax revenue.
The city had previously proposed charging an 8% transitional occupancy tax on certain rentals, with only operators of properties with four bedrooms or more being required to remit the tax. This proposal was withdrawn as the policy was changed over the past year. Business licenses and personal property taxes would not apply to rentals.
Council member Stephanie Lynch, who was the only dissenter in Monday’s vote, argued the city stood to lose potential tax revenue from operators who, not allowed to rent multiple properties, may no longer operate in the city in a year. Lynch asked for more time to further refine the rules, but a majority of the board voted to put the start-up policy in place.
Michael Jones abstained from voting. Reva Trammell was absent from the meeting.
The city’s policy comes weeks after neighboring Henrico County passed its own rules, which impose an 8% transitional occupancy tax – the same rate charged for stays in hotel and motel rooms . There is an annual fee of $ 200 to register with Henrico and the tax applies to the cost of renting a room or residence occupied for 30 consecutive days or less.
City policy requires a biennial permit, at a cost of $ 300, for anyone looking to rent a property for less than 30 days at a time. The policy no longer includes a restriction on the number of nights an accommodation can be rented per year – previously offered at 180 nights per year.
First rolled out last year, the city’s policy was revised over the course of several months with public input from surveys and community meetings. The Planning Commission approved the latest version earlier this year, and additional meetings with stakeholder groups were held before council reviewed the policy last month and postponed the vote to Monday’s meeting.
Approved surplus designation
In other cases, council has approved a surplus property designation for the public security building at 500 N. 10th St. The designation allows the city to pursue a formal request for proposals for the development of the 3-acre site. , which is one of many formerly owned properties associated with the Navy Hill Project.
The remaining properties were removed from the surplus designation to give the city time to complete a small area plan for these properties and to free the city from pursuing a specific RFP for the Public Safety building, which is the focus of the ‘one of two development proposals the city has received since Navy Hill was rejected.