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Virginia Beach considers restricting Airbnb rentals and creating harsher penalties for violations

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Virginia Beach is considering dramatically restricting who can lease short-term rentals and implementing harsher penalties for those who break the rules.

While the proposals are still in the early phases of development, the city council could change its policies and procedures for renting homes on websites like Airbnb by the fall. The goal of many council members is to further protect the character of neighborhoods.

The city implemented rules on the short-term rental industry in November, but several council members said the regulations don’t go far enough. They are floating the idea of creating civil penalties of $200 to $500 for violations.

Currently, the city allows residents and real estate companies across the city to apply to have short-term rental properties. Each permit is considered individually by the planning commission and city council.

Council members are now interested in creating districts that would allow homeowners to rent only their primary residences — where they must live at least half of the year. It would still require an application, but the Planning Department would give approval as long as all zoning requirements are met.

“I think there is a recognition that the existing laws are not everything we want them to be,” said Councilman Guy Tower, who represents the Oceanfront district.

The city has 2,678 registered short-term rental properties, according to Eric Schmudde, the chief deputy commissioner of the revenue. Of those, more than half — 1,437 — belong to real estate companies.

Planning Director Bobby Tajan said 68% of the short term rental applications come from five zoning districts — the Oceanfront, Old Beach, North End, Shore Drive and Shadowlawn. He recommended the council start with looking at these neighborhoods first.

Tower said he would like to move forward with implementing the changes for the Old Beach neighborhood, which is located near the Oceanfront. He said he fears the neighborhood is most at risk to be taken over by commercial short-term rentals that will leave properties empty during the off-season, making the area a “ghost town.”

If the council moves forward with Tower’s proposal, it could have a significant impact on companies who wish to turn single-family homes into short-term vacation destinations.

“I am not against short-term rentals,” Tower said. “I think we have an obligation to help the neighborhoods keep their character.”

Tajan said any changes the council adopts would need to be approved by the planning commission. He recommended the city solicit feedback from the community over the summer. He said August or September is the soonest staff would be prepared for a public hearing in front of the council.

Tajan said the council will have the difficult decision of deciding whether to allow outstanding applicants to be subject to the current rules, or delay approving them to make them adhere to new regulations that could be approved in the future.

About 180 housing units are waiting for a short-term rental permit approval, Tajan said. The council did not meet in person for about six weeks earlier this year amid concerns over the coronavirus pandemic, creating the backlog.

In response to a budget shortfall fueled by the pandemic, the city cut several planning department positions that would have monitored short-term rentals. Councilwoman Barbara Henley, who represents the Princess Anne district, said she has concerns with approving more applications while the city has no way to enforce the rules, especially with the coronavirus spreading throughout the country.

“We have no enforcement, and we have absolutely no inspections, safety or health control over these units whatsoever,” Henley said. “People who are coming in and renting these units need to know that.”

Alissa Skelton, 757-222-5155, alissa.skelton@pilotonline.com.