Short-term rental operators in Henrico County could soon be required to pay an annual registration fee and regular lodging taxes to continue renting out their homes or rooms to visitors.
After years of debate and discussion at the local and state level, the Henrico Board of Supervisors is now considering an ordinance that would impose an annual $200 registration fee and the county’s 8% lodging tax on property owners using Airbnb and similar online platforms.
On Tuesday, county supervisors reviewed the proposed ordinance and voted to hold a public hearing on the matter in February. If approved, the new regulations would take effect starting July 1.
A short-term rental is defined as a rental property that’s available to a customer for fewer than 30 consecutive days.
Short-term rentals, under the county’s proposed rules, would be allowed only in select residential zoning districts. Generally, the rentals would be prohibited in high-density zoning districts that allow town homes and apartment complexes.
A county report on the ordinance says buying a house solely to host short-term rentals would not be permitted.
Any operator who wishes to remain off-site during a guest stay; rent out a guesthouse; rent to more than six visitors; or host rental guests more than 60 days per year will need to obtain a conditional-use permit.
Officials said there has been interest in creating rules for the emerging short-term rental industry since the 2015 UCI Road World Championship bicycle races brought thousands of visitors to the region.
“It’s currently illegal, and there’s a desire in the community for people who want to do short-term rentals,” said Assistant County Attorney Andrew Newby. “So it’s a question of how it can be done legally without having a negative impact on neighbors.”
But the need for state authorization to permit local short-term rental ordinances, as well as pushback from the hotel industry and homeowners in residential areas, required careful deliberation.
Joe Emerson, the county’s planning director, said the county has been holding meetings with stakeholders for more than a year to shape the ordinance.
“It’s to make the playing field equal with other people in the short-term rental business: hotels, motels, bed-and-breakfasts,” Emerson said of why a tax is being proposed. “They asked that we make it an even playing field.”
Ned Smither, the county’s finance director, said the levy and annual registration fee could bring in about $30,000 to $50,000 annually, but he added he worries that delayed compliance might make those estimates inaccurate.
Emerson said the revenue would be needed to cover the cost of a third-party vendor that has been helping the county track short-term rentals listings online. He and other officials said there are about 175 to 300 short-term rentals in the county.
During a brief discussion about the ordinance Tuesday, Emerson said the county’s regulations could help shape what the city of Richmond might adopt, as short-term rentals there are also not currently regulated.
“They were kind of on the fence on the [lodging] tax, similar to us,” he said. “They were waiting to see what we did.”
The public hearing on the Henrico ordinance is scheduled for Feb. 25.