By Nelson Helm
Airbnb users in Lexington and Rockbridge County could see an increase in regulation and oversight by the end of the year, according to Lexington Planning Director Arne Glaeser.
Glaeser said the increased regulations will be a small part of an overhaul of the city’s zoning ordinances. He said the zoning ordinances have not been updated in “quite a long time.” Glaeser is hopeful his office can provide a draft of the new ordinance to the City Council by June.
In relation to Airbnb, the new zoning ordinances will address safety concerns, taxing, and compatibility issues with neighbors, according to Glaeser.
“Everybody needs to be at a fairly even footing [on taxes and other regulations],” Glaeser said.
Airbnb is a part of what is called the sharing economy—which refers to peer-to-peer-based sharing of goods and services. Lyft and Uber are other examples of the sharing economy; they enable car owners to provide transportation directly to customers. Supporters believe the sharing economy allows more competition, which in theory would lower the price of the good or service. But the phenomenon has disrupted established industries such as hospitality and taxi services.
Washington and Lee Professor of Economics David Toomey said that this type of economy helps individuals match their preferences.
“Rather than a traditional hotel, if I am looking for different types of accommodations, I might be better able to find something exactly like I am looking for,” Toomey said.
Nationally, hotels, motels, and other services that the sharing economy has taken business from, have begun to push for regulations to have everyone on the same footing. Glaeser said he had not heard of any local hotels that have complained.
Some of these regulations stem from a loss of tax revenue that could occur under the sharing economy. Airbnb’s policy on local taxes, like an occupancy tax, is that the company does not collect the tax. Instead, individual listers are expected to collect the tax from the renter and pay it themselves. Toomey said that this could be an issue for municipalities down the road, because local taxes help fund public services.
“A particular concern, is it harder for municipalities to bring in revenue from these new services,” he said. “Is there a loss of public service as a consequence of that? That can be particularly harmful for a community.”
Started in 2008, Airbnb boasts over 60 million guests in over 34,000 cities and 190 countries, according to its website. This includes over 140 rentals in the Rockbridge County area.
[pullquote align=”right” cite=”” link=”” color=”” class=”” size=””]“A particular concern, is it harder for municipalities to bring in revenue from these new services,” Prof. David Toomey said. “Is there a loss of public service as a consequence of that? That can be particularly harmful for a community.”[/pullquote]
Property owners who use Airbnb, which are classified as a short-term rental, are required to register with the Commissioner of Revenue for a business license, according to the Lexington City website. Glaeser also said owners must have a quick inspection for safety.
Tom Bradshaw, who owns three vacation rentals throughout Rockbridge County and advertises them through Airbnb, said he doesn’t think increased regulation will help solve any problems that communities are concerned about. He said if you limit Airbnb’s and other short-term rentals, the market would go underground.
“You put zoning down and all it does is just, people just disappear off of the face of the Earth,” he said. “You’re getting down to micro-zoning and you can’t enforce that.”
Glaeser said that the Commissioner of Revenue checks other short-term rental websites to see if those listings have a business license with the city. Glaeser said he isn’t aware of anyone who has refused to get a business license.
Property owners do not have to pay a membership fee to list on Airbnb, as they do for a competing company, Vacation Rentals By Owner (VRBO). Instead, Airbnb takes a percentage of the rental fee. This fee is still usually less than the $300 to $400 per year a VRBO membership costs, according to Bradshaw. Property owners can also list multiple spaces, unlike a traditional VRBO, which allows just one listing.
Justin Peery, who owns Good Place Farms Bed and Breakfast in Rockbridge County, said Airbnb was the first place he advertised when he opened the business in 2012. He said within the first month, he received requests to book the house. Peery said that booking on Airbnb is more accessible on both ends of the transaction.
“Their system, it almost seems seamless and flawless,” Peery said.
A part of the ‘flawless’ system is a feature that other companies are trying to imitate. Airbnb allows both the renter and owner of properties to rate each other, something that Antonia Albano said has revolutionized the hospitality and vacation rentals industry.
Albano, who owns South River Highlands Country Retreat in Lexington, said that a large chunk of her bookings come from Airbnb—second only to Google searches. Albano said she doesn’t see an issue with renting out space through the online platform, as she has observed that it’s mostly couples that are respectable and care about being polite.