by James A. Bacon
Let’s say you’re a widow trying to make ends meet. You convert your basement to an apartment and rent it out to out-of-town visitors through Airbnb. Or, let’s say you’re a young couple. You’ve bought your dream house, but you don’t have any children yet, so you rent out a room for short-term stays through FlipKey. Should that be illegal? Well, it is in the City of Richmond.
Why? Because, very simply, hotels don’t like the competition. And hotels, unlike Airbnb participants, have organized in a highly effective lobby to stack the law in their favor. It’s emblematic of how organized special interests nationally have harnessed the power of government to buttress their privileged positions in the marketplace at the expense of the little guy.
Fortunately, the City of Richmond has not enforced the law as aggressively as it could. Airbnb rentals surged during the recent UCI Road World Championships, with several hundred rentals reported, and Airbnb reports 300+ rentals available in Richmond today. Still, the ordinance undoubtedly keeps law-abiding homeowners from participating, and even sporadic city efforts to clamp down on the rentals discourages those who don’t mind operating in the gray market.
Del. Chris Peace, R-Mechanicsville, would dispel uncertainty with proposed legislation, the Limited Residential Lodging Act, which allows Virginians to rent out their homes or portions of their homes for periods of less than 30 consecutive days, or to do so through a hosting platform. To ensure that localities receive any taxes that are due, the bill makes the hosting platform responsible for collecting the taxes and remitting them. Ensuring the payment of taxes would eliminate an unfair competitive advantage that homeowners would have over hoteliers.
Peace told Style Magazine that Richmond is primed to benefit from Airbnb. “In Richmond we are establishing ourselves as a destination for outdoor recreation and a restaurant scene. I think [by] allowing Airbnb, FlipKey and others … we can tap into a whole new generation and offer accommodations to even the business traveler, that otherwise might not be available today.”
Peace’s bill also stipulates hours when guests may receive visitors, writes Style, and includes clauses to honor local noise ordinances and minimize impact on the surrounding community. Hosts who rent 90 days or more are required to get a business license. Still, the restaurant lobby says the bill doesn’t do enough to level the playing field. Hosts should meet a stricter threshhold to acquire a license. Says Eric Terry, president of the Virginia Restaurant Lodging and Travel Association: “We just want them pay the right taxes and adhere to the same standards as traditional hotels.”
Bacon’s bottom line: In two of the best vacations the Bacon family has ever taken, we rented small apartments in Barcelona and London. The apartment-rental option adds significantly to the experience of visiting a city, and anyone wanting to promote tourism in Richmond and Virginia should want to make it available to out-of-town visitors. Moreover, there is a moral case for the policy: Citizens should be allowed to supplement their incomes by renting out all or part of their houses. The right to make money from lodging shouldn’t be limited to big corporations.
If Uber and Lyft could hash out their differences with the taxicab industry, surely Airbnb and Flipkey can reach an accommodation with the hotel industry. Peace’s bill is a good place to start. I hope the lodging lobby will approach the legislation in a constructive manner, working to correct legitimate abuses — renting out to loud, drunken partiers in a quiet residential neighborhoods comes to mind — rather than kill it outright.
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