Airbnb In Charlottesville: A High-Level Look

Charlottesville’s new Zoning Ordinance promulgates a new “use table” to govern what uses will be permitted by-right and by-permit in different zones in the city. Many advocates for affordable housing have argued that the city ought to eliminate or further restrict “short term rentals” (STRs) as a use. “STR” is the regulatory term of art for what people colloquially refer to as Airbnbs. Worry about the potentially deleterious impact of STRs on housing affordability — in that many housing units appear to be used for STRs exclusively, as sort of pseudo-hotels — is a rare point of convergence between proponents and critics of upzoning. Both recognize that STRs have the potential to take housing stock out of the residential market.

NDS and the city’s consultants released a final version of the Draft Zoning Ordinance (DZO) which removed “homestay” as a permitted use in most zones. The “homestay” use category encompassed STRs. The outcry from local STR hosts was dramatic and immediate. Unlike the outcry from residents about many other controversial aspects of the DZO, this complaint found receptive ears at NDS. Within days, NDS reversed itself and amended the “final” DZO to preserve the current ordinance’s language on homestays. The NDS director indicated that his team would make a proposal on new STR rules at a later date.

Proponents of STRs have maintained that they can help residents on the financial margin stay in their homes by providing a supplementary source of income. In these cases, a homeowner will rent a part of the house to STR guests or only rent the whole house periodically, in either case maintaining the home as a principal residence. Used this way, STRs might help with affordability. On the other hand, when investors buy apartments and houses to use fully as STRs, that will squeeze housing availability and potentially increase housing costs. And in fact, the current zoning rules recognize this distinction, requiring STR hosts to live in the home at least 180 days a year.

NDS justified the original choice to eliminate “homestay” entirely by claiming that the enforcement of the rules as written had proved impractical. How could NDS tell how STRs were being used? The solution: a blanket ban. Well, just because an incompetent person cannot manage to succesfully perform a task does not prove the task impossible. As it turns out, many companies offer outsourced “host compliance” services to jurisdictions. They are just a Google search away, but for whatever reason, the city staff has continued to try (and fail) to go it alone.

Housing activists have begun to track STRs and analyze the effect on housing markets across the globe. Inside Airbnb collects extensive data on STRs in cities around the world, though sadly they have not made it to Charlottesville yet. The group also publishes research from an STR-critical perspective. Their conclusion is that “professional” STRs — that is housing units run entirely as STRs — predominate and have a meaningful impact in cities with robust tourism. We encourage those interested in the issue to check our their website. Bottom line: STRs are not an obscure issue and the monitoring and analysis of this phenomenon does not represent a wheel that requires inventing.

In the absence of a published report on Charlottesville, we wondered how hard it would be to get data ourselves and to generate a snapshot of the STR situation in the city. As it turns out, it is fairly trivial (though apparently, again, beyond NDS) to scrape Airbnb data. Not every STR lists on Airbnb, so it necessarily provides only a partial picture, but given Airbnb’s leading position the capture rate is probably fairly high. We mapped all the STRs in Charlottesville that we could scrape from Airbnb and geolocated them to the closest level of precision Airbnb’s “blurred” location data allows. We then classified them according to whether they consisted of a whole housing unit or just a room/suite and whether their occupancy rate was above or below 20%. We figured that an occupancy rate below 20% is low enough that it would not support a “pseudo-hotel” use, and obviously a rented guestroom in a residence does not constitute a “pseudo-hotel” either.

The map below shows the STRs in Charlottesville. Green dots represent “room/suite-only” STRs. Orange dots represents full-unit STRs with low occupancy. Red dots represent full-unit high-occupancy STRs. As you can see, most Charlottesville STRs on the Airbnb platform appear to be pseudo-hotels. Only 20% of the listings are for a room or suite. 80% are for full housing units, and over 90% of these have higher occupancy. On the Airbnb platform alone, we found 200 high-occupancy, full-unit STRs. Of all STR units in the dataset, 45% were listed by a host with more than one listing in Charlottesville to his or her name. Consider this number a rock-bottom minimum, with more STRs likely to be found by a professional compliance service.

We hope that the Council can step in to devise a set of STRs rules that accurately distinguishes between accessory use that contributes to the financial stability of bona fide resident households and pseudo-hotels that devour housing stock that would otherwise accommodate residents. It’s not mission impossible. That at the very end of a multi-year process, such a crucial issue could see a rapid 180-degree turn raises serious questions about the competence of the staff and consultants charged with devising the DZO. The total failure to perform foundational analysis or even identify outside service providers who might be able to do so for the city likely extends beyond this one issue. This is just one where it is visible. If you watch a fellow struggling to tie his shoes, would you trust that the parachute he packed for you will deploy properly? Let’s hope Council does not jump out of the Zoning plane with a shody RHI parachute.

September, 2023