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Proposed Changes to Short-Term Rentals in Virginia Beach {November 2020}

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.

The Virginia Beach City Council recently put forth a proposed ordinance amendment, sponsored by Councilman Tower, to the Planning Commission in order to revisit the conversation on short-term rental regulations in Virginia Beach, which were updated last year with the new Virginia Beach Short-Term Rental Ordinance. Several aspects of the regulation process have needed some clarification since the law went into effect in November 2019.


City Council has been actively looking for a way to regulate vacation rental properties so as to protect neighborhoods and foster positive communities in Virginia Beach’s residential areas.


The Planning Commission held a special workshop on Wednesday, November 4, 2020 to discuss the Council’s latest proposal. This discussion was not open for public comment, but was simply the beginning of the proposal review process. No decisions were made, and the Commission is actively looking for feedback from the public.


Read on for suggestions of how you should take quick action in light of this new proposal.


Here are the highlights from the November 4th, 2020 meeting:


The Planning Commission wants YOUR input prior to moving forward.

Since Virginia Beach’s short-term rental regulations were updated about a year ago, only a small percentage of properties operating as short-term rentals have received their now-required conditional use permits. With roughly 2,000 vacation rentals listed online for Virginia Beach, the Commission wants to make sure that every owner has been made aware of the conversations about this new effort to update the regulations, and that owners have a chance to give their input.


Because of this, the commission is requesting an extension from the City Council on the proposed 100 days slated to review the proposal, receive public feedback, and return their notes to City Council. They would like more time to make sure the public is informed, and will be sending out mailers and communications to owners during that time.


These next few months will be the perfect time to provide your feedback on the proposal by:

  1. Emailing str@vbgov.com or calling (757)-385-4621

  2. Speaking at the December 9th public planning meeting

  3. Contacting your Planning Commission board member & City Council representative

The City Council proposed that only certain geographical districts in Virginia Beach can house short-term rental properties.

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 automatically approved to house properties that rent out on a short-term basis. Properties within an overlay district would be allowed to rent short-term “by right” (without a permit), as long as they meet the regulations for a short-term rental in Virginia Beach and pay the appropriate taxes. This groundwork for the “overlay district” started with the original ordinance that allowed property owners in Sandbridge to rent their units short-term without a CUP.


Overlay districts would be designated in areas in which the City believes short-term rental properties make sense for the local economy. Three overlay districts have been proposed:

  • East Shore Drive: from the new Delta Hotel to First Landing State Park

  • North End: East of Holly Road, from 50th St. to 89th St.

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

Proposed "overlay districts" in Virginia Beach. Properties that fall within designated areas will  be allowed to rent on a short-term basis "by-right".
Properties within an overlay district would be allowed to rent short-term “by right” (without a permit).

*West Shore Drive was also proposed as an overlay district, but removed when Ocean Park Civic League members at the meeting opposed a “by-right” allowance in that area.


There are currently many additional short-term rental homes in the Old Beach area, but it was not proposed as an overlay by City Council. Those located in the district would need to vote to have their area included as “by-right” for short-term rentals under the proposed amendment - a motion that would require 60% approval by neighborhood residents.


Properties not in an overlay district may not be allowed to rent out once their current permit expires.

City Council’s current 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. However, the Planning Commission suggested an amendment stating that if the property currently has a conditional use permit, it can remain a short-term rental but only until the current conditional use permit expires.


Properties that were grandfathered into the 2019 ordinance (those that were operating, registered, and up-to-date before July 2018) wouldn’t be affected by this change. However, owners of these properties still need to complete a Short-Term Rental Registration and Renewal form to protect their grandfathered status. Those who do not complete the form, if and when the overlay districts are approved, are at risk of losing their ability to operate if they live outside the overlays.


***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.***


Another neighborhood could, however, still become an overlay district. It would require a 60% majority vote from the owners in the area for a new district to be considered an overlay.


This part of the proposal is currently being hotly debated, even among Commission members themselves. They are also discussing the possibility of a permit running with the owner rather than the land, so it becomes invalid if the property is sold or if there are violations or complaints.


We strongly encourage all vacation rental property owners to get their conditional use permit now if you don’t have one yet! Here’s a post on how to get it.


The short-term rental regulations may be updated again for those within the new overlay-districts.

Overlay districts might get the benefit of being able to operate rental homes without a permit, but they will still be required to adhere to city regulations. The Planning Commission is proposing some updates to the regulations that came into effect last year:


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.

Parking:

  • Parking areas would be required to be pervious to reduce the flooding risk in Virginia Beach.

  • Driveway parking would count toward required parking spaces (1 per bedroom), as long as it doesn’t block pedestrian or vehicle traffic.

  • A garage would only count as one parking space, even if it’s big enough for two vehicles.

Safety:

  • Smoke alarms and fire extinguishers would need to be checked yearly and installed according to code - by the owner or a representative.

  • A licensed professional would be required to inspect all decks, stairways, porches, and balconies each year and note that they are safe to use.

Rental Term Limits:

  • The number of rental contracts per property would be limited to 52 per year.

  • There has been no new proposed limit to the number of contracts per week, though previous regulations limit contracts to two within a seven-day period.

These changes would affect all vacation rental owners in Sandbridge, as well as, any property owner within an approved overlay district who does not hold a conditional use permit. If a property owner applies for a conditional use permit before the regulation changes are approved and it’s accepted, the property will be held to the regulations passed last year rather than the new ones.


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 30 minutes. 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 issues 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. CGP Real Estate is working on an alternative on-site management solution for out-of-state property owners. Give us a call to learn what we can do for your STR property.


The Bottom Line: Here’s what you need to do

  • Stay calm. These are still only proposals and are being actively discussed. They will most certainly look different when they are passed.

  • Be a part of the conversation. Contact your local planning commission board members and elected city council representative via email or letter to voice your opinion.

  • Get your conditional use permit. Don’t delay any longer if you don’t have your permit yet- even if you think your property will be in an overlay district. Getting the permit now means that you will only be held to last year’s regulations, and will buy you time to keep your business running if it is outside of an overlay district. We’ve even got a team who can help you complete the permit process.

  • If you own a grandfathered property, make sure its registration doesn’t lapse. If your vacation rental home was registered with the Commissioner of Revenue prior to July 1, 2018 and you kept your taxes up to date, just make sure you’ve completed the STR renewal form for the Commission.

  • 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.


About the Author & CGP:

Scott Westfall is a licensed real estate broker with Broadsight Realty in Virginia Beach and owner of CGP Real Estate Consulting. CGP’s blog exists to give real estate investors in Hampton Roads and beyond the power to invest with confidence. Have questions? Contact Scott directly at (757)-375-4550.