Virginia’s long-awaited Airbnb Bill goes into effect on July 1, 2017.
By Eric Terry
Senator Thomas (Tommy) Norment, Jr., is a Virginian through and through. He grew up in James City County and graduated from a Williamsburg high school. He left the Williamsburg area to attend Virginia Military Institute but later returned to attend the College of William and Mary, where he earned his Juris Doctorate from the Marshall-Wythe School of Law.
In the picturesque city of Williamsburg, surrounded by the history of our county’s origins, Norment is an educator at one America’s oldest colleges, an esteemed local attorney and a member of many community organizations. One of his more important roles, however, is his appointment as State Senator in service to the residents of James City County and the surrounding area.
Norment cut his teeth in government service when he was elected to the James City County Board of Supervisors in 1987. After serving as chairman of the James City County Board in 1991, he went on to be elected to the Virginia Senate as a Republican. Since beginning his service as senator in 1992, Norment has taken on numerous leadership roles including leader of the Republican caucus in 2008 and as majority leader in 2012.
But that’s all information you can find with a quick Google search. What really drives Tommy, he prefers the colloquial first name, is the need for safer communities for families, better education for all Virginians and a friendly business environment.
Which brings us to his role as patron of 2017 Senate Bill 1578, in legislative-speak: “Short-term rental of property; registration of persons offering property for rental.”
Or colloquially, like Tommy, the Airbnb Bill.
Virginia first took an interest in short-term online rental legislation in 2016, when representatives of Airbnb attempted to slide through legislation that would create a “don’t ask, don’t tell” tax payment structure for the company. At its core, Airbnb’s 2016 proposed legislation would have created a tax structure that would permit Airbnb to remit a check to the state with limited detail about the actual taxes collected. But perhaps the biggest issue with the bill, put forth by Delegate Chris Peace (R, Mechanicsville), was the inclusion of the term may.
“The hosting platform may register with the Department of Taxation,” read Peace’s 2016 House Bill 812 (emphasis added).
For Tommy, creating a simple tax collection and remittance structure certainly falls into his platform of being a business-friendly state. But, passing a law that creates a simple structure that a business may opt into didn’t quite add up given Airbnb’s history of inaccurate data (as reported by The New York Times) and ignoring regulations (as reported by Business Insider).
“Having served in local government, I believe decisions affecting the use of housing should be made at the local level,” Tommy said. “Airbnb advocates wanted a one-size-fits-all approach. In the hospitality industry, that would result in an unfair competitive advantage.”
It was a little late in the game, but Virginia’s hotel industry and the bed and breakfast community fought back. After enlisting representatives in both the house and senate, with Tommy leading the charge, the industry submitted legislation designed to better define short-term online rentals, providing an alternative to Airbnb’s preferred regulation.
Please take note of the last phrase, “Airbnb’s preferred regulation.” It is worth noting this because, during the 2016 Virginia General Assembly session, Airbnb’s CEO Brian Chesky publicly stated on The Daily Show on February 24, 2016, “We want to be regulated. Because to be regulated is to be recognized.”
However, the legislation Airbnb was pushing said little about regulating Airbnb, and a lot about limiting Virginia’s localities’ ability to regulate them locally – superseding any current laws and seriously limiting any future local regulation.
It was clear during the 2016 session that Virginia had an opportunity to be a national leader when it came to short-term rental legislation. With senators and delegates working at the behest of Airbnb in other states, we knew Virginia could be viewed as a precedent across the country.
With the help of Tommy, Virginia’s hotels, localities and other industry groups were successful in slowing down the quickly moving Airbnb Bill. Ultimately, legislators referred the bills to the Senate Finance Committee – co-chaired by Tommy – which negotiated a workgroup to take up the challenge of developing consensus regulation for 2017.
After a summer spent in workgroups – with representatives from all sides of the short-term rental industry including Airbnb, hoteliers, bed and breakfast owners, realtors, the insurance industry and even local emergency responders – no consensus was reached.
As Airbnb continued making its way around the country to states, cities and localities peddling its “limit regulations, and we’ll send you a check” regulations, Virginia hoteliers were working with the Virginia Municipal League, the Virginia Association of Counties and Tommy’s office to develop a bill that would tackle issue in 2017.
The proposed bill focused on affirming localities’ rights to regulate Airbnb and other short-term online rental providers at a local level. The legislation allows localities to adopt an ordinance requiring short-term hosts to register (including permitting a small registry fee), impose penalties for violating the registry ordinance, and prohibits the gifting or sale of alcoholic beverages as a part of any stay with a host as it is a violation of alcoholic beverage control laws.
The creation of local registries will allow authorities to better track individuals renting their homes or rooms on hosting platforms like Airbnb. And in doing so, it will allow localities to properly collect taxes from these at-home business entities.
Airbnb’s side elected to sit back in 2017 and not propose legislation. Instead, they watched and waited, hoping to slide their preferred legislation in during session as an alternative to the industry’s proposal. The approach backfired. Lawmakers opted not to allow the alternative to be inserted.
Though there was a fair amount of back-and-forth during the session, the Airbnb Bill – a joint effort by the hotel, locality, realtor and insurance industries – was passed by both chambers and signed into law by Gov. Terry McAuliffe (D). The legislation goes into effect on July 1, 2017.
“The legislation we passed ensures accountability while protecting the interests of communities and consumers,” Tommy said. “That is an equitable solution to a complex challenge.”
This is an important piece of legislation, one that states across the country should consider passing. The bill creates a fair and reasonable system for registration, accountability and transparency for short-term rentals, and it allows local governments to take the lead in working with people who want to host short-term rentals.
With Tommy’s leadership, this long-awaited legislation will help guide the rest of the country as other states, and possibly Congress, look to find a solution to the issues they face with Airbnb and create greater stability in the lodging industry once more.
It is a win for communities and visitors alike. While the lodging industry continues to support competition within the industry and welcomes a growth in the short-term rental market, we must protect neighborhoods and communities and provide localities the ability to so. This legislation accomplishes both. ■