Urbanna town officials react to explosive growth in short-term rentals

Nationwide, short-term rentals have reportedly grown 800% since 2011, changing the economics of investment properties. Owners can receive more rent from one vacationer in a week than they previously received in a month renting to full-time tenants.

Getting some short-term rental owners to comply with regulations is a cumbersome process, Urbanna Treasurer Michelle Hutton told the town council at its April 27 meeting.

The town opened the door to short-term rentals in April 2021, said Hutton. “Since then I have been in a constant battle tracking, monitoring, and trying to research payments. We have owners and agents that just don’t follow the rules.”

Short-term rentals are required by the town to have a business license, an annual permit, and $1 million in liability insurance, said Hutton, adding that the bulk of the rentals didn’t have the required insurance.

Growth

In her research, Hutton learned that short-term rentals are affecting the housing market for buyers, who cannot compete with short-term rental buyers who will pay inflated prices, said Hutton. “Short-term rentals are pushing people out of our neighborhoods.”

When there are too many short-term rentals for the market, rental properties remain vacant, and the town loses the 5% lodging tax. She suggested limiting the number of short-term rentals to 12.

Hutton said there are websites that advise short-term rental property owners how to skirt regulations.

Housing crisis

In 2021, a total of 40% of residences were owned by out-of-town residents. In 2022, the number of out-of-town owners rose to 42%.

Councilor Merri Hanson, who serves as chairman of the Urbanna Planning Commission, commented, “We have a housing crisis, people cannot find places to rent or buy. They cannot live in Urbanna. The more short-term rentals we have the less inventory there is available for people to live full-time and this is one of our concerns as a community.”