Hotel lobbyists scored a last second victory in the fight over how to regulate short-term rentals in Virginia.
Lawmakers sent the so-called “Airbnb bill” to Gov. Terry McAuliffe this week, after making a few final changes that will push-off some elements of the legislation for a year while the state continues to study the issue. If McAuliffe signs the bill, Virginia will become the first state to have a statewide framework legalizing Airbnb and other short-term rentals that have become a popular part of the sharing economy.
Airbnb lets people rent their homes, or extra rooms, over the Internet, and takes a cut of the rate. The service connects travelers and would-be renters, similar to how other travel sites connect travelers with hotels.
The bill establishes a statewide mechanism for Airbnb users to pay taxes to the state, rather than the current mish-mash of local rules that exist across the rest of the country. A statewide framework is beneficial to travelers and would-be renters because it means the service will be available in every part of Virginia.
“Embracing online homesharing platforms and efficient revenue collection and remission mechanisms is not only beneficial for consumers, but also a win for the commonwealth,” wrote Gary Shapiro, president of the Consumer Technology Association, in a letter urging lawmakers to pass the bill.
They did — the House of Delegates passed the final version of the bill with a 90-8 vote, while the Senate agreed to it by a margin of 32-7 — but not before lawmakers, backed by the hotel industry, made a few late changes.
Leading the way was Senate Majority Leader Thomas Norment, R-James City, whose district includes the tourist hotspot of Colonial Williamsburg, along with the hotels that surround it.
“I don’t think the localities were prepared to see something this dramatic coming forward without a reasonable amount of study,” Norment told the Hampton Roads Daily Press last week, as he was pushing to postpone the bill’s passage.
The mayor of Williamsburg was in Norment’s corner, writing a letter to the senator that sharply criticized the Airbnb bill. The Virginia Restaurant Travel and Lodging Association also lodged complaints with the proposal, calling it “short sighted.”
They couldn’t stop the bill from passing the state General Assembly, but Norment did insert language into the bill to postpone enforcement of several provisions, including one that prohibits local governments from banning Airbnb. So bans remain possible until at least next year.
Norment and the hotel lobbyists say the delay is intended to give the state time to study the issue.
“With more and more local governments, business and communities realizing the unintended consequences of the proposed online short-term rental legislation as it had been initially proposed, support for the Virginia Housing Commission to study this entire issue has significantly increased,” said Eric Terry, president of the VRTLA.
“We welcome competition, but fair competition,” he said.
Some supporters worry that the delay will give local governments the opportunity to impose bans or pass restrictive zoning laws to block Airbnb users from renting their property.
Even if that doesn’t happen, the changes to the bill mean that most of the revenue provisions won’t take effect until 2017. Airbnb will continue to operate in the state, but the state and local governments won’t get any additional revenue until next year.
“While Airbnb is doing business in Virginia, it’s not doing the business that it could,” State Del. Christopher Peace, R-Hanover, told the Richmond Times. “And therefore it’s not able to provide the revenues that it really could to the state and to localities.”