VIRGINIA BEACH, Va. - The City of Virginia Beach has been wrestling with Airbnb, a website where people can find, list and rent lodging, for more than a year. But two weeks ago, a 20-year-old was shot at a private residence rented out on Airbnb. The tragic circumstance is part of the reason the city is pushing hard to regulate the service.
Airbnb currently falls into a gray area. The city doesn't specifically permit the rentals, but it doesn't exactly forbid them either. Bob Matthais, the assistant to the city manager said while the city is losing more than $200,000 in taxes annually, he's more concerned about the health, safety and welfare of the renters.
Typing 'Virginia Beach' into Airbnb yields more than 300 places for a weekend getaway. The pricey ones cost more than $1,000 a night, while others are cheaper than hotels, starting at $30.
"The top 60 renters are costing the city 60 thousand dollars annually," said Eric Schmudde is the Chief Deputy Commissioner of the Revenue in Virginia Beach. He said the city has been wrestling with the company for 18 months. "The code is kind of silent on how to deal with these guys as far as taxation, so we could be talking upwards of a quarter of a million dollars or more."
The city hopes to get a mechanism in place to identify who is renting, but their efforts with the company, founded in San Francisco in 2008, have been stalled.
"We've sent at least three letters asking them to identify who their renters are and to help us in the collection of the remittance of the taxes. We have gotten no response to date," said Schmudde.
Regardless, the city and state of Virginia are pushing forward. Schmudde believes locals including Virginia Beach, Norfolk and the Hampton Roads area have a lot at stake. "It's a local tax and it needs to be administered locally and they need to clear this up."
Christopher Nulty of Airbnb said the company supported a bill in the spring, allowing Airbnb to collect and remit taxes across the state, but the hotel industry killed the bill.
The Virginia Housing Commission has a study group helping to shape legislation regarding Airbnb. The group's first meeting is Tuesday, May 10 and is open to the public.
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