• Scott Westfall

[JUNE 2021] Proposed Changes to Virginia Beach Short-Term Rental Laws

Updated: Jul 23

UPDATE 7/13/21: Virginia Beach City Council has BANNED ALL NEW SHORT-TERM RENTAL PROPERTIES except those located in Sandbridge or those legally operating prior to the July 13th, 2021 ban. Read our latest blog for more info.

In November 2020, the Virginia Beach City Council proposed some changes to the new short-term rental laws that went into effect in 2019. The changes were suggested to make enforcing and regulating rental properties easier, with the hope of protecting the character of local neighborhoods and communities. This proposal has sparked a 6-month-long process of reviewing and debating the future of rental properties in Virginia Beach.

Proposed changes to short-term rental laws to be voted on by the Virginia Beach City Council

If voted into effect on July 6th, 2021, these proposed regulation changes will greatly restrict who can use their property as a short-term rental business.

Much discussion has taken place among City Council, the Planning Commission, and Virginia Beach residents who have shared their public opinion.

Here are the highlights from the most recent update to the proposed changes, which was presented and discussed at the City Council meeting held on May 18.

Properties outside of "overlay districts" won't be approved as short-term rentals in Virginia Beach.

As part of the recent proposal, City Council has asked the Planning Commission to consider applying “overlay districts” to help regulate which neighborhoods would be approved to house properties that rent out on a short-term basis.

Density limits will be set to regulate what percentage of properties in these areas may be used as short-term rentals, and further regulations, fees, and tax requirements will be enforced. Property owners in the East Shore Drive and North End overlay districts will still be required to obtain a Conditional Use Permit.

Proposed Overlay Districts

The Sandbridge area of Virginia Beach has been operating as an overlay district since 2019. Property owners may rent out their homes by-right as vacation rentals in this area.

In the same vein, three new overlay districts have been proposed. The descriptions below reflect the most updated proposed boundaries for each of these districts.

East Shore Drive Overlay: from the new Delta Hotel to First Landing State Park, North of Shore Drive.

In the East Shore Drive overlay district, vacation rental properties must obtain a Conditional Use Permit, will be limited to accepting one rental contract per week, and the City will only approve a density of 11.5% for units serving as short-term rentals.

North End Overlay : East of Holly Road, from 45th St. to 89th St.

In North End overlay district, vacation rental properties must obtain a Conditional Use Permit, will be limited to accepting one rental contract per week, and the City will only approve a density of 10.6% for units serving as short-term rentals.

Oceanfront Resort Overlay: ViBe District and along the Pacific Ave. from 1st St. to 35th St.

In the Oceanfront Resort overlay districts, vacation rental properties will be allowed to rent “by right” (without a permit) as long as they meet all short-term rental regulations set by the city. Oceanfront Resort properties will be limited to accepting two rental contracts per week.

Outside of these districts, other neighborhoods could still become an overlay district. It would require a 60% majority vote from the homeowners in the area for a new district to be considered an overlay.

Properties with Conditional Use Permits will need administrative approval to extend their permit once it expires.

City Council’s original proposal states that if a property is outside of an overlay district, it will not be allowed to function as a short-term rental property. This would likely mean that those presently operating elsewhere with a permit would need to stop renting after their current Conditional Use Permit (CUP) expires.

However, the Planning Commission has proposed that existing approved CUPs be subject to administrative review after their five years are up. At that point, extensions may be given, or the permits may be revoked if the property has any violations.

As of right now, it is unclear how long extensions for CUPs would last or if they can be transferred to a new owner if the rental property is sold.

“Grandfather” status will run with the land.

Properties that have received grandfather status - meaning they were registered as short-term rental businesses with the Commissioner of Revenue prior to July 1, 2018 and met all tax payment requirements - will maintain that status even if the property is sold.

Because the status “runs with the land,” another investor may purchase a grandfathered property and continue to legally rent it out. However, the City can still revoke grandfather status if there are violations, if there are major complaints about a property, or if the overall square footage of the structure is increased by 25% or 1000 sq. ft. (whichever is less).

If your property met the requirements to be grandfathered in, make sure to keep its registration up to date with both the Commissioner of Revenue and the Planning Commission.

The short-term rental regulations for approved rental properties are also being tweaked.

Properties approved to operate as short-term rentals will still be required to adhere to city regulations. The Planning Commission is proposing some updates to the regulations that came into effect in 2019.

Here are a few proposed changes to note:

  • Signage: Properties would be required to post a sign with a contact number for the operator or representative of the property, visible from the street.

  • Occupancy: The maximum occupancy permitted on the property between 11pm and 7am would be two people per bedroom - excluding minors under 16. With minors included, the total would not be permitted to exceed three per bedroom.

  • Special Events: No special events would be allowed at short-term rental properties. Permits would not be available, and events at the rental would be limited to the maximum occupancy of that property.

  • Safety: A structural report must be submitted every five years indicating the safety of exterior stairs, decks, porches, and balconies. A registered design professional must do the inspection. The occupancy load of all decks must be noted on a placard.

  • Rental Limits: Properties in the East Shore Drive and North End overlays will be limited to one contract per week, and the Oceanfront Resort overlay district will allow up to two rental contracts per week.

Find a full list of the proposed regulation updates here. CGP will distribute a complete list of all short-term rental regulations to our mailing list after the vote on June 15.

On-site response will be a must.

No matter what City Council and the Planning Commission decide regarding “overlay districts,” one regulation change seems certain: in case of emergency property issues, property owners or their representatives will be required to respond on-site within one hour. This will present a significant challenge to out-of-state property owners.

Under the current regulations, a responsible party must be able to respond to any property issue within 30 minutes, but a physical response is not required. As this regulation is likely to change, non-local owners will need to make sure they have a local solution.

P.S. Running your short-term rental from out of state? CGP’s partner Koti LLC empowers you to self-manage your rental by tapping into the local support you need to stay compliant - at a fraction of the cost of a full-service property manager.

The Bottom Line

  • Be heard. Contact your local planning commission board members and elected city council representative via email or phone TODAY to voice your opinion.

  • Stay informed. CGP is staying on top of this topic and is in regular communication with the Planning Commission. Make sure you’re subscribed to our mailing list so you can get the most recent updates.