Free Airbnb!

Nancy has lived in her house in Richmond's Fan district for 25 years. She rents out an upstairs bedroom and bath for $89 a night.

An upstairs bedroom and bath in this house in the Fan neighborhood of Richmond rents out for $89 a night.

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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12 responses to “Free Airbnb!

  1. When it comes to services for tourists and traveling business-people, it’s hard to argue with open competition, regulated merely to avoid abuses of customers and neighborhoods. We should even grant the hotel industry the need for the equal application of taxes. That said: Just what does “adhere to the same standards as traditional hotels” mean? The studied ambiguity of that phrase is what’s wrong with the ordinance, and with the people that enacted it. Thank you, Del. Peace, for doing something about it.

  2. If you decide to rent out your place be sure to check with your insurance carrier about liability,potential damage and fire

  3. I think people, once again, take for granted what insurance and building codes and regulations is present for hotels/motels and what is not for AirNb.

    Most Motels and Hotels are in areas where you can find other services like restaurants and fuel… and less often sited in sketchy areas of towns.

    There is a certain level of expectation – much like what you’d expect from a McDonalds and Motel 6 – that is totally out of the window with a local diner or local residential lodging.

    I’m not opposed to AirNb nor Uber but I’m betting as time goes by – the less advantageous side of these kinds of arrangements are going to become more apparent and the “fad” part of it is going to wear off.

    They’ll be options for some people at some times – but they are not the transformative market disrupters the free market folks are claiming they represent – either.

    Both motels and cabs now also let you “book” from a phone.

    what’s good for the goose is also good for the gander.

    Motels are going to start touting what they provide that home arrangements – don’t.;

  4. The way I read Fairfax County’s zoning ordinance, these uses would likely be defined as a bed and breakfast (up to five guest rooms). And the owner would need a special exception since the use would be a “Commercial and Industrial Uses of Special Impact.”

    The question that pops to mind is when does a weekend rental turn into a quasi-commercial use? One summer we let an acquaintance of my son stay on our futon for a couple months because he had an internship and it was too expensive for him to rent a room. I don’t think that caused any disruption in the neighborhood, especially as we had him park in an out of the way location. But what if we put my daughter’s empty bedroom and bath on AirNb? We might need a special exception.

  5. The statists on this blog fail to recognize that the market will sort this out. Why? Because the feedback on AirBnB hosted accomodations is readily available on the web, just like hotels.

    • Right you are! I travel constantly and use Yelp! all the time. After a while you recognize the “handles” of other business travelers. From then on … cakewalk.

  6. the feedback mechanism is another one of those things that SOUNDS like it works fine – but in reality – we know that feedback can and is done fraudulently.

    Geeze – if everyone told the truth – we’d not need regulations at all, right?

    😉

    where is the marketplace does it say – you have to tell the truth and cannot misrepresent ?

    you free market folks kill me sometimes!!!

    willing seller – willing buyer transactions – right?

    😉

  7. AirBnB fills a niche, not just in places like Richmond. Visiting my daughter in Brooklyn recently, we were struck by how few motel-like, small-hotel venues even exist for overnight stays by motorists. The ones that do are mostly in very sketchy surroundings and feature by-the-hour rooms. Finally found an Airbnb location that had just had a cancellation (these are booked way in advance; there’s a demonstrable pent-up demand); had a good experience with it (provided, you’ll learn a thing or two about on-street parking conditions everywhere in Brooklyn).

  8. I definitely feel that AirNb should be a legal and accepted part of the temporary lodging landscape – no question!

    however – residentially-zoned areas and buildings are fundamentally different from commercially-zoned buildings and areas in things like parking and building and fire codes to name a couple.

    It’s not a house – renting out a room – as much as it might be more of a business with business issues.. including taxes and liability.

    You cannot deduct expenses for such an endeavor on your Schedule A itemized deductions – you’ll have to file a Schedule C to get those expenses and issues like taxes and liability insurance come into play.

    There is – with this issue -like others these days -a bit of a sound-bite perception and appreciation – almost like a child’s simplistic view of how things work especially the need for regulation and insurance.

    • I agree with Larry. The law must accommodate new developments in technology and markets, but opening a short-term rental business needs to be consistent with the zoning ordinance and appropriate authorizations must be obtained first. Ditto for taxes.

  9. AirBnb – yet another example of technology and the Internet smashing corrupt politicians and their cash spewing puppet masters. Power to the market! Metaphorical death to crony capitalism and corrupt politicians for life!

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