A map of identified short-term home rentals in the city show the greatest concentrations in the Fan and Museum districts, Jackson and Monroe wards, Church Hill and Shockoe. (Courtesy of the City of Richmond)
A year and a half since the city adopted rules to allow Airbnb-style home rentals in Richmond, more than 500 short-term rentals remain active in the city. But only 14 are considered legal and in compliance with the rules.
City planners are looking to change that with a revision of the rules, which went into effect in 2020 but have had minimal effect on permitting and regulating the short-term rentals, or STRs – homes or rooms rented out as lodging for less than 30 days.
A delayed rollout of a third-party compliance monitoring program, as well as the pandemic’s impacts on travel and tourism, have factored into the rules’ effectiveness, planners have said.
But at issue to most observers is a requirement that operators reside at the property being rented for at least half the year, meaning the property is considered their primary residence.
At a meeting last week, the Richmond Planning Commission approved a resolution of intent to amend the rules and revisit certain regulations, including the primary residency requirement.
While no changes to the rules have been recommended, the action starts the process of re-engaging the public and working toward revised rules that work better for operators as well as the city.
Kevin Vonck, the city’s planning director who’s leading the effort, said this week that engagement could start in February, with a goal of presenting recommendations to the commission this spring.
The commission had been slated to consider amendments to the rules last summer, having adopted them in mid-2020 with the caveat that they would be revisited after a year to review their effectiveness. But that was a year that included COVID and changes in leadership and staff within the planning department, prompting commissioners to delay the process for six months.
While he didn’t offer specific amendments at last week’s meeting, Vonck said in a presentation to the commission that recommendations would come from the process that they’re getting underway.
Kevin Vonck, Richmond’s planning director, outside Richmond City Hall. (BizSense file)
“We adopted an ordinance that’s been in place now for a sufficient amount of time that warrants looking at again and perhaps making some adjustments, to really enable individuals to do a short-term rental in a way that hopefully promotes more to come forward and get compliant,” Vonck said.
Using “Host Compliance” software from third-party vendor Granicus, a Denver-based company that also manages Richmond’s Legistar calendar platform for meetings, the city has identified more than 500 STRs active in the city. It also has ramped up efforts to notify operators of how to comply with the rules, sending out nearly 200 letters since April.
But since July 2020, when the rules took effect, Vonck said the city has received 84 applications for permits. And of those, only 14 permits had been issued – two more than when Vonck last presented on the topic in July.
About 40 applications were pending or under review, while the rest were either expired, voided or denied, due to issues such as incomplete applications, fees not being paid or inadequate dwellings, Vonck said.
The biennial permits come with a fee of $300 to help pay for the Granicus software and administration costs. But with 14 permits issued, the total revenue from those fees would come to $4,200, far below the roughly $35,000 the city is paying annually for the service.
“The thought was we’d register enough short-term rentals to help pay and offset the cost of the contract, and we’re not even close to doing so,” Vonck said.
Speakers in a hearing that preceded the commission’s vote put the blame for that squarely on the 185-day residency requirement, which Vonck acknowledged is challenging to enforce.
“How do you ensure that somebody who says they live in a dwelling is really waking up and going to bed there every single day? That is a very difficult thing to enforce to a tee and should be one of the things, if we do open this up for discussion, that should be considered,” Vonck said.
Stacie Vanchieri, a former STR operator who spoke at the hearing, encouraged the city to change the requirement, not only to encourage compliance but to make the program self-sustaining and potentially an additional revenue stream. She said the requirement is the reason why more operators aren’t applying for permits.
“It’s that 185-day rule that is making people go underground or not answer your letters, because they know they’re going to get denied if the city hears that they actually do not live 185 days in that home,” she said. “It seems to me that, from a financial point of view…taking out that 185-day rule is going to open up hundreds of STR operators filing permits and paying the fees for it.”
Vonck said STRs are generally seen as positive in the community because they add lodging options and help attract visitors who may not want to stay in a hotel, particularly in light of the pandemic. He said STRs are also seen as a way for residents to start businesses and generate wealth.
“I know that sometimes that can get taken as, ‘Well, it’s just a landlord or a property owner just building their wealth.’ But it’s for anyone who owns property – a way to supplement and build income,” he said.
“On the other hand, I think we do have to have concerns in terms of our housing market right now,” Vonck said, acknowledging impacts that STRs can have on housing availability.
“It’s very well-documented we have a shortage of supply of units, and so things that reallocate units from long-term living to short-term rentals can and do have an impact on the housing market,” he said. “It’s important that we have those considerations when we look at the true amount of short-term rentals in our community.”
Katherine Jordan
Katherine Jordan, the commission’s City Council representative, stressed that such potential effects need to be talked about in the process.
“I agree that the one-size-fits-all isn’t really working, but I feel that we absolutely have to emphasize the negatives, which are increasing the housing costs and housing availability,” Jordan said. “The administration hears complaints about affordability, gentrification, access to housing, every day. I want to make sure that those larger goals are not lost in this conversation, which I agree does need to happen.”
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