Charlottesville staff recommends no amendments to city’s homestay rules for now

After a year of study of the city’s rules on short-term rentals provided through companies like AirBnB, staff in the Department of Neighborhood Development Services presented a recommendation to the Planning Commission on March 24.

“And that is to maintain our existing code without any amendments at the moment to strengthen monitoring of homestay compliance, permitting requirements and education about homestay requirements.are recommending,” said Missy Creasy, the city’s deputy director of NDS.

The work of staff at NDS is governed by a plan that is periodically reviewed by the Planning Commission and the City Council. In December 2024, the PC learned that one of the priority items would be review of the city’s rules on short-term rentals or homestays in residential zones. Those are the ones marked Residential-A, Residential-B, or Residential-C.

“This is specifically a residential property that’s rented less than 30 days,” said Missy Creasy, the deputy director of NDS. “Property owners who reside at the residence for at least 185 days of the calendar year have the ability to apply for a homestay permit,” Creasy said.

Creasy said the homestay rules have not been altered for the past ten years. Permit holders have to show ID to prove they own their property and pay a $100 a year fee. Several safety measures must also be in place such as fire extinguishers, smoke alarms, and carbon monoxide detectors.

To further study the issue, staff purchased software last year to help find those who may not have registered.

“This is a software that’s tailored to the city, so it shows the city and provides a number of data points for us as we are looking at short term rentals,” Creasy said. “One is it locates them and it locates them by finding listings online. So it helps assist us with proactive enforcement and licensing.”

The system discovered there have been as many as 529 short-term rentals in the city but Creasy said staff thinks that number might be a little high.

One item staff is watching is the effect of recent changes that come out of Richmond. The General Assembly approved legislation that requires localities to allow long-term tenants to be able to operate short-term rentals with permission from their landlords.

“That is something that came out as part of our study that has the potential to open up the use of homestays to more operators within the community and increase the numbers as well as potential increase to neighborhoods,” Creasy said.

Proposed changes had included requiring an affidavit in addition to the photo ID, increasing the permit to $500 for three years, and a mandatory safety inspection before the permit is issued.

Another proposed change would have been to reduce the number of allowed nights for a homestay to 90 from 185.

“With the estimate of 90 days, we talked about the potential to rent every weekend, which is a lot of people do the weekends or do special events in the community,” Creasy said.

For now that is off the table in part because staff wants to continue seeing how the software works to identify the full scope of short-term rentals.

There was time at the work session for members of the public to have their say including Deborah Weiss who said she was instrumental in getting an accessory dwelling unit ordinance passed in the 2000’s so she could build a second unit on her property. She’s rented it out on AirBnB since 2013 and has never had a complaint.

“The city keeps raising the assessments on properties and the property taxes,” Weiss said. “And now without my short term rental, I would be completely priced out of my neighborhood. And the property taxes that I have to pay now are over $11,000 a year.”

Under the new Development Code, the term “accessory dwelling unit” is no longer used.

Chas Webster has several properties in both residential and commercial areas and said he was part of a group that asked the city to hold off on amendments. He was surprised to see the item on the Planning Commission’s agenda.

“Our understanding was that they were going to basically not ask for anything at this point and work on just enforcement and conversation and communication with us, which we welcome,” Webster said.

Webster said the city would lose revenue if visitors to the area don’t have the option to stay in people’s homes, a preference held by many. He said these days the city gets their lodging tax revenue much easier from platforms like AirBnB and he would recommend creating more space for potential units.

“We should be incentivizing people certainly in some of these areas where there is upzoning to build more of these and actually tax them as much as possible and benefit as much as possible from this so we’re not having to constantly just raise property taxes,” Webster said.

Though specific changes are not planned at the moment, Planning Commissioner Josh Carp said it would be a mistake to drop the number of nights to 90.

“I also don’t see any public interest in preventing tenants from renting out part of their home, especially because it would require the landlord to approve it and if they don’t like it, they can say no,” Carp said.

The Planning Commission was generally supportive of the recommendations. City Council is scheduled to have a work session on the matter in early April. For more on homestays, visit the city’s website.

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