Every few weeks, sometimes every few days, Kelly Andrews would get a new neighbor. Though the owner of the house stayed the same, he was never there. Through Airbnb, he would rent his home out to visitors to the city. Many nights, Andrews said she’d be forced to reach out to the owner or the police when parties would get loud and rowdy in the early hours of the morning.
Legislation is finally catching up to technology for home sharing in Virginia. Questions about taxation and permitting for home sharing has been on the table in Fairfax and Arlington. In a meeting at the Charles Houston Recreation Center on Oct. 17, Alexandria’s Assistant Director of Finance Kevin Greenlief updated local citizens on legislation concerning home sharing. A state law passed earlier this year allows localities to create a registry for those providing home shares. Greenlief emphasized that the registration is administrative in nature, only allowing the city to obtain names and addresses of home sharers. This aids in the implementation of tax laws, but Greenlief emphasized that it doesn’t change any existing zoning or tax ordinances. Registration is annual and repeated failure to register can come with penalties.
Home sharing in Alexandria is already taxed with a regional and local transient lodging tax of 8.5 percent plus $1 per room per night for any rental that can lodge four or more persons at any one time. There are additional state and local sales taxes and a Business, Professional and Occupational License fee if the gross revenue is greater than $10,000 annually, though Greenlief said the latter scenario is not the norm for home sharing.
However, collecting these taxes can be difficult for the city. One proposal Greenlief brought forward at the meeting was entering a voluntary agreement with Airbnb where they would collect the tax automatically and pass the revenue along to the City of Alexandria. Some form of collection would still need to be worked out with the other types of home sharers, but Greenlief said it’s estimated that Airbnb comprises 80 percent of the home shares in Alexandria.
“There are pros and cons,” said Greenlief. “The cons are we don’t have as much specific identification of the property or of rental receipts. We do have a much better chance of systematically collecting tax. I think it would be a pretty good automated tool. We can audit Airbnb once every four years, would still give us a tool. I have fairly good confidence that this would be the way to maximize revenue with low impact on city expenditures. The process in my mind is analogous to utility taxes. City doesn’t collect utility taxes, utility companies do, and then remit the tax to the city. It’s a compromise: it’s biggest bang for the buck and it minimizes reliance on staff resources.”
Currently, Greenlief said it is difficult for the city to estimate how many home shares there are in the city. Tom Kaidin, chief operating officer for Visit Alexandria, said a study done last year by Visit Alexandria showed roughly 375 active listings in the city, though a margin of error for home sharing along the borders of the city could push that number as high as 500.
“It’s a moving target, the number cycles in and out,” said Kaidin. “It’s an infant industry, so the measures taken last year may be very different this year .… It’s still young, and growing. Pinning down exact number is difficult.”
The public comment for the meeting did drift into questions about whether programs like Airbnb are good or bad for the city. Most of those in attendance were a coalition of various concerned parties. They were homeowners like Andrews who lived adjacent to properties, taxpayers looking to homesharing as a burgeoning industry to help fill the city coffers, and hotel chains concerned that Airbnb could do to them what Uber and Lyft did for taxis.
“I fear the degradation of those historic neighborhoods,” said Libby Mcintyre. “It’s about protecting what is interesting and precious to this town and balancing that with the fact that Airbnbs are here to stay. How do we protect the spirit of Alexandria? How do we allow this commerce into our community but not let this degrade [our city]?”
But proponents of home sharing argued that Airbnb residences were like any other neighbors: they were either a benefit or a hazard. And if they were a benefit, they weren’t a problem for the City of Alexandria.
“It seems like general tone is anti-Airbnb,” said Robert Kinsler. “It allows my wife to stay home with child. It’s been an amazing opportunity for us. There’s been a lot of great things that come from putting power into individual’s hands vs corporations and those who can afford to put up hotel. A bad neighbor is a bad neighbor, whether they are renting or not.”
Proposals concerning a registry for home sharers in Alexandria will be put before the City Council in November, or possibly delayed until December, but Greenlief said the staff’s goal is to have the registry process underway in January.