Hello Councilman Addison and Robertson,
CC: Marianne Pitts.
Mark Olinger
I find it odd that there is a government interest in regulating something with less than a 0.5% complaint rate... something that most industrial manufacturing processes (businesses) do not achieve. Similarly, I am discouraged that the city was unaware of any non-hotel short term rental operators; however, I am encouraged that you are meeting internally with a team to discuss some of the proposed changes and review how the finances will work.
In regard to the proposed legislation, I have captured the suggested changes in the attached PDF Document. Currently, I am not aware of any legislation making STRs illegal (
http://www.richmondgov.com/Finance/documents/faqLodgingTax.pdf ). I am only aware of legislation citing the need to collect transient occupancy tax for those who participate in such business.
It was a long, difficult, and frustrating process getting setup to do this in 2016. Similarly, I attempt to do all current transactions online - without visiting city hall because the process is so unpleasant, I get parking tickets because it takes too long, and more errors are made while interacting with the staff there.
I report and pay lodging tax as an STR operator, but I do not sell food or beverage / admission. I use this form -
http://www.richmondgov.com/Finance/forms/ALM_coupon.pdf . Note the reference..."Any person receiving taxable transient lodging charges for any hotel, motel, or other lodging place containing ten (10) or more bedrooms within the city" - I interpret this as HOTELS as most STRs are less than 10 bedrooms. I pay the tax anyway. None of my rentals have more than 2 bedrooms.
In general, it needs to be clear what the goals of this legislation are...
- If regulatory / compliance / safety... then make it easy to register without fees - making the 3rd party auditing (cost) unnecessary. No excuse for not registering. Special zoning should only need to be pursued for single family residences - residences intended to be owner occupied or long term rentals. Don't forget that standard Home Owners Insurance rarely covers STR operation.
- If revenue based, you have to focus on capturing the revenue - individuals self reporting income and occupancy is unlikely to be successful or profitable for the city. The 3rd party admin cost will be under funded unless regulated and enforced strategically with appropriate branches of the law. Instead add to the finance department via business license process - also not easy.
Mark, In regard to the 2015 report... please do not cite the data you find favorable and disregard or discredit "the intern" who prepared it. I thought it was well written. Similarly, do not advertise that you need another intern to do additional research if you plan to discredit it for the same reason. Another wasted cost if their time is not valued. Be a better mentor.
I genuinely think you need to consider how self-reporting will cover the cost of the 3rd party regulatory activity... if business licenses are not required (for some)... how would anyone even track occupancy rate, revenue, or delinquent tax? Similarly, are hotels also self reporting? Are these ever audited for actual occupancy rate and proper tax collection? Which department or process currently regulates big-business hotel compliance? What is their revenue stream as compared to STR operators?
If someone were an operator of a STR that did not already comply with current laws... I would highly doubt they would pursue the compliance aspect that you are suggesting is going to be required. It was not an easy process... requiring multiple visits to the city offices and a level of follow-up, tracking, and patience that I do not think most people have.
I plant to speak at...
- Public Meeting #1: Saturday, May 4, 2019, from 10:30 a.m. – 12:00 p.m. in the basement auditorium of the Main Library, 101 East Franklin Street
- Public Meeting #2: Tuesday, May 14, 2019 from 6:00 p.m. - 7:30 p.m. at the Richmond Central DMV, 2300 West Broad Street
Thanks for your time,
Thomas Courtney