Laws change while Virginia sleeps

The Virginia Gazette

In January 2016, two bills were introduced into the General Assembly, SB-416 and HB-812, one in the Senate, the other in the House, with one purpose: to open the Commonwealth of Virginia to the expansion of Airbnb and other short-term rentals. This would be achieved by removing authority for zoning ordinances from local authorities, and by nullifying the authority of all homeowners associations (HOA) and covenants. If they passed in their original forms, anyone would be able to do anything with property, anywhere.

It hardly needs to be said that the two bills are opposed by hoteliers and motel operators, the bed-and-breakfast industry, and innkeepers. Sen. Thomas Norment and other elected officials from Williamsburg and James City County have been unanimous in their opposition to the bills. Whatever impact the bills might have on the hospitality industry, they would have a potentially devastating effect on communities throughout the state.

By one estimate, there are more than 200 short-term rentals available in James City County, many in neighborhoods zoned R-1 Residential, and as many as 5,000 such throughout the Commonwealth. It was through the publication of a notice of a Public Hearing in the Virginia Gazette (April 23, 2016), that we discovered an Airbnb/tourist home in the Lakewood neighborhood, operated without a licensehosting and feeding guests since January 2015. Application for a Special Use Permit (SUP) was denied by the Planning Commission on May 4th, and by the Board of Supervisors on June 14th.

It is likely that some short-term rentals are operating in neighborhoods with homeowners' associations and with restrictive covenants. The belief that an HOA or restrictive covenants provides protection against "lone rangers" who are renting out one to three rooms in their homes is naive. James City County staff are unable to police all neighborhoods and, as in the case in Lakewood, neighbors are encouraged to "self-police" their own communities.

The rationalization for these two bills is the promotion of free enterprise and exercise of individual rights to do with one's property whatever one is inclined to do.

"Free enterprise is never free, someone always pays," wrote Nobel Laureate Milton Friedman, better known for his wisdom, "There are no free lunches." "Individual rights," wrote Justice Earl Warren, "is a fiction. All rights exist in social settings."

From research we have undertaken over the past two months in preparing opposition to the application for the SUP, we have learned a great deal about Airbnb, as well as the impact commercial business has on residential neighborhoods. To consider the last: Economists have determined that, on average, property values in neighborhoods with commercial operations such as short-term rentals (for example Airbnb) drop by 7.3 percent for every one percent increase in commercial activity. The assessed values of Lakewood are more than $12 million, and figuring the loss in property values, beyond the impact on residents, the County would lose almost $8,000 in property taxes.

Airbnb is the fastest growing hospitality business in the world, with an estimated value of $25 billion, but it has a checkered history, including tragic accidents and deaths, from Taiwan to Texas and in between, and most recently, a fatal shooting in an Airbnb in Virginia Beach in May. They are uninspected and unregulated, entirely dependent upon the local hosts. As one reviewer describes the business, "It is like some models of manufacturers in the Silicon Valley, who take the approach, `Put it out there, and let the consumer find out what's wrong.'" And from another, "Airbnb is litigation waiting to happen."

It is ironic that at a time when cities such as Berlin, New Orleans, and San Francisco have either banned or put restrictions on Airbnb rentals, legislators want to open Virginia to the proliferation of these and other short-term rentals.

There are places for Airbnbs -- in mixed-zone and urban neighborhoods -- but not in small, quiet neighborhoods, such as Lakewood, and perhaps, yours.

If you do not want to see your next-door neighbors renting out spare bedrooms in their house on a nightly basis, you must share your concerns, as soon as possible, with Elizabeth Palen, Executive Director, Virginia Housing Commission, at this email address: epalen@dls.virginia.gov . Tell her you want your R-1 Zoning, Neighborhood, Covenants and Homeowners Association policies protected in perpetuity.

Vinson Sutlive lives in the Lakewood area of James City County.

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