Virginia Beach Short-term Rental Ban [July 2021]
In an effort to “protect the residential areas of Virginia Beach,” City Council voted on July 13, 2021 to ban all new vacation rental properties throughout the city. Read on for the full story behind the Virginia Beach short-term rental ban.
The rise of vacation rental companies such as Airbnb has increased both the supply and demand for short-term rental properties - but has led to an increase in certain challenges as well. Tourism-heavy cities like Virginia Beach have experienced a rise in noise violations, trash issues, and traffic as short-term rental homes began to take over.
In order to address these issues, Virginia Beach City Council representatives enacted the Short Term Rental Ordinance of 2018, which outlined the rental approval process and regulations for all vacation rental homes in the area. In 2020, City Council reviewed the ordinance, leading to the recent decision to ban all new short-term rental properties in Virginia Beach outside of the Sandbridge District.
Whether you see the new short-term rental ban as a protection to your neighborhood or an obstacle to your business, here’s what you need to know about the situation:
Who Can Operate Short-Term Rentals in Virginia Beach?
Those who were operating as a legal short-term rental with grandfather status or an approved Conditional Use Permit can continue to operate their vacation rental business. Properties located in the Sandbridge District of Virginia Beach have permission “by-right” to rent out homes there as long as they are operating within the City’s regulations and paying the appropriate taxes.
However, any homeowner seeking to convert their property into a vacation rental home outside of Sandbridge after July 13th, 2021 is banned from doing so under the latest ordinance change.
How Can I Operate a Rental Property Outside of Sandbridge?
For a neighborhood to be accepted as a short-term rental overlay district, 75% of property owners in a proposed community must sign-off on the petition. City Council would then vote to grant that neighborhood permission for rental properties to be approved “by right,” like in Sandbridge.
(Originally, Virginia Beach City Council had been considering making the North End and Oceanfront Resort District “by-right” areas for vacation rentals. However, no vote approved this in July.)
What’s Next for Virginia Beach Short-term Rentals?
City Council plans to convene again on September 7th, 2021 to vote on whether the Oceanfront Resort District should be included as a “by-right overlay district” like Sandbridge. If approved, new short-term rental properties within the Oceanfront Resort District would be approved to operate, but limited to two rental contracts per 7-day period.
There is still debate about what will happen to rental properties with Conditional Use Permits once those permits expire. Likewise, if a property with grandfather status is sold, it is unclear if that rental home will maintain its right to operate.
How Will New Vacation Rental Laws in Virginia Beach be Enforced?
This is another question that remains unanswered. In the past, the city has used third-party software and services to identify local properties listed on sites like Airbnb and Vrbo. They use these tools to check if each listing is operating legally under the current laws. They have also set up a hotline for local residents to report any illegal short-term rental behavior.
The planning department does have the ability to levy fines against property owners who are operating illegally. Prior to September 2020, any short-term rental violation was viewed as a civil offense and all fines had to be passed down from the court.
Options for New Rental Home Owners in Virginia Beach
Some property owners hoping to rent out their fully furnished Virginia Beach homes may be at a loss for what to do next. There are several alternatives to both a short-term rental and a standard yearly lease for these investors:
Monthly Rentals: The City of Virginia Beach defines short-term rentals as properties that use rental contracts for periods of less than 30 days. There is a healthy demand for fully furnished rentals to lease monthly at an increased rate.
Summer Homes: Hampton Roads has a large market of interested renters desiring to find the perfect beach home to rent for 1-3 months in the summer. These contracts can generate a lot of income during this peak season.
Long-Term Rentals: Virginia Beach is a great market for investors looking to establish their property as a long-term or yearly rental. This can generate a stable income without some of the turnover headache a short-term rental brings.
Get the Neighborhood Vote: According to Ordinance 3668, Article 23 Section 2301(b), a community requesting the short-term rental overlay will need to:
Create a proposed boundary of the overlay, using property lines, adjacent bodies of water, streets, alleys and easements as the boundaries. (Appendix A, Article 1, Sect. 102(4)).
Next they will need to present the proposed boundaries to the Planning Director for their review and interpretation (Appendix A, Article 1, Sect. 102(b)(6)).
If the proposed overlay is approved by the Planning Director, then the community would be required to obtain 75% of the property owners signatures before the overlay is presented and heard by City Council.
Finally, the City Council will hear the community’s petition and vote to approve or deny the overlay district.
The Bottom Line
As of July 13, 2021, new short-term rental properties are not permitted in Virginia Beach outside of the Sandbridge District.
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