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CL- 2073 Work Session   Item #:   B.    
Work Session Meeting
Meeting Date: 03/05/2019  
Subject:    Review of Regulations on Bed and Breakfast Establishments
From: Kenneth C. Gillie, Jr.

COUNCIL ACTION
Work Session Meeting:     03/05/2019
SUMMARY
City staff have been instructed to review regulations regarding short-term rentals, specifically bed and breakfasts.
BACKGROUND
In late 2018, City Council received and approved two (2) requests for Special Use Permits to operate bed and breakfast establishments. When considering the requests, both the Planning Commission and City Council discussed whether or not the requests should require a Special Use Permit, and what may be done to update the City’s short-term rental regulations to reflect current trends. City Council also discussed emerging partnerships between some Virginia municipalities and online short-term rental platforms, such as Airbnb.
 
Under the current Zoning Ordinance, short-term rental establishments are classified as bed and breakfast establishments, boarding houses, or hotels/motels. Bed and breakfasts are permitted in all residential districts by Special Use Permit only, and in five out of six (5/6) commercial/office districts (one of which is by Special Use Permit).  Bed and breakfasts are also required to provide one off-street parking space per room accommodation.  Boarding houses are only permitted in one of eight (1/8) residential districts by Special Use Permit only.  Hotels and motels are permitted in four out of six (4/6) commercial/office districts, and two out of three (2/3) industrial districts.
 
In considering the issue of short-term rentals, staff have referred to the recent Special Use Permit requests, concerns raised by residents, current research, and existing regulations in other Virginia Cities. Staff have identified the following concerns related to short-term rentals:
  1. Where to permit short-term rentals;
  2. Whether or not to permit rentals by right or by Special Use Permit;
  3. Different classifications of short-term rentals based on criteria such as the presence of a host, the number of rooms provided, and whether or not breakfast is provided;
  4. Internal safety of the home, such as the presence of fire extinguishers, smoke detectors, carbon monoxide detectors, and methods of escape;
  5. Restrictions on the frequency or annual number of rentals;
  6. The number of rooms for rent and number of people at any one time;
  7. Effects on housing affordability and availability;
  8. Competition between large-scale (hotels) and small-scale rentals (homeshares);
  9. Parking requirements;
  10. Observable appearance of commercial activity in residential districts;
  11. Use of online platforms, such as Airbnb, VRBO, TurnKey, and several others;
  12. Tax collection;
  13. Ability of officials to enforce regulations; and
  14. Annual registration of short-term rental establishments, which is permitted under state law.
RECOMMENDATION
Staff recommends that City Council request that the City Planning Commission consider one of two options regarding short-term rental regulations. The key difference between the two options is whether or not to permit any additional short-term rentals by right. Of the two, staff supports the first option requiring Special Use Permits.  This allows for adjacent property owner notification and input, and allows for items such as parking, frequency of occupation, and other items to be addressed by conditions on the permit.  The following are the options staff has generated:
 
Option One:
Staff recommends that City Council not permit short-term rentals by right in additional districts. There is still a significant amount of variety regarding policies for short-term rentals. Although some municipalities have relaxed restrictions, the long-term implications are still relatively unexplored at this time. The use of Special Use Permits allows the City to continue to evaluate short-term rentals on a case by case basis to address the concerns listed previously, and to notify neighbors of the proposed use and potential impact.
 
Additionally, staff recommends that City Council request the Planning Commission to discuss some clarifications to reflect current trends, while still preventing adverse impact on the community. Potential changes include the following:
 
1.          Provide a new definition for homestay in Article 15 entitled “Definitions”, Section B entitled “Definitions” of the Zoning Ordinance to recognize differences in how residents choose to host visitors; and
 
2. Provide a new definition for homestay in Article 15 entitled “Definitions”, Section B entitled “Definitions” of the Zoning Ordinance to recognize differences in how residents choose to host visitors; and

Option Two:
City Council might instead wish to relax restrictions for short-term rentals. If Council chooses this option, staff recommends that Council instructs the City Planning Commission to consider a potential Zoning Ordinance Amendment to reflect current trends related to short-term rental establishments. Potential changes specifically include the following:
 
1.          Provide a new definition for homestay in Article 15 entitled “Definitions”, Section B entitled “Definitions” of the Zoning Ordinance to recognize differences in how residents choose to host visitors;
 
2. Amend Article 2 entitled “General Regulations”, Section T entitled “Home Occupations” of the Zoning Ordinance to add safety requirements for both homestays and bed and breakfast lodging, including annual inspections. This amendment should also stipulate that a Special Use Permit still be required to operate a bed and breakfast in any residential district.

If Council pursues this option, staff also recommends that Council consider additional policies regarding short-term rentals. Such changes could relate to tax collection and annual registration. However, City Council should consult the Commissioner of Revenue regarding any potential policy changes related to finances.

Attachments
Amendment Options
Locality Comparison Information

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