The "M" word.
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The "M" word.
Is a Moratorium for Short-term Rentals in Nelson County on the horizon?
Attached below is a PDF of a PowerPoint presentation researched and authored by Robin Hauschner, a planning commissioner for Nelson County’s Central District. Though it hasn’t been formally presented to the Planning Commission, it’s been making the rounds – which is why I’ve got my hands on it.
The numbers will dazzle you and Hauschner tells me they are sourced from Nelson County GIS records, which is why specific citations are omitted. After digesting the data, Hauschner presents a list of suggested recommendations, summarized here:
Imposition of a Speculation Tax
Inspired by the recently-derailed California Speculation Act (Assembly Bill 1771), a 25% tax would be levied on homes sold within 3 years. That number would drop to 5% if the home was sold between years 3 and 7. After that, the Speculation Tax would be 0%. An exemption for those who could prove primary residence during the resale period would be allowed: “Prevention of economic damage due to job transition or major life events in non-speculatory home purchases.” It is worth noting that such a tax would likely fall flat in Nelson County, as long as Virginia remains a Dillon’s Rule state (Read about the Home Rule vs. Dillon’s Rule debate here).
Setting a cap on Short-term Rentals (STRs) in Nelson County
How would such a cap be determined? Does this mean property owners who already own STRs can continue to rent them out in accordance with existing laws? Would it mean STR expansion could grind to a halt along the busy Nelson 151 corridor, but be allowed to progress in other parts of the county? What if you are purchasing a property with the potential intent to make it available as an STR? Hauschner says STR caps are already in effect in Norfolk.
Creation of a mandatory short-term rental registry that adheres to Virginia Code § 15.2-983
It looks like that’s already in the works.
How could this impact short-term rentals and housing affordability in Nelson County?
It’s hard to say at this point. STRs have become a scapegoat for the tightening long-term rental market and surging property values, pricing many locals out of the home buying or renting process. This letter to the editor of the Vail Daily argues STR growth can’t be blamed for the resort town’s housing woes. Would such a plan have any traction in Nelson, itself home to a popular resort? California’s bill died in committee. Closer to home, attempts to regulate STRs have succeeded in Albemarle County, garnering mixed reviews and in turn driving investor interest across county lines. There’s growing concern among property owners I’ve chatted with that should a geographically-based cap/moratorium succeed here, it is quite possible that areas of the county currently unaffected by such regulations could actually see a spike in property interest by STR investors, where the grass would be perceived to be greener.
With inflation and higher interest rates, you could make the argument that the STR market may already be experiencing a correction, reducing the urgency for further regulatory action to alleviate housing concerns of Nelson residents and workers. But you could also say the higher cost of becoming a property owner demands regulatory action, perhaps in the form of a moratorium.
To be clear, Hauschner’s report has not been formally introduced to the Planning Commission and it is not an agenda item in the scheduled October 26 meeting. So perhaps the “M” word isn’t “moratorium,” but rather “maybe.”
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The "M" word.
Thanks for reporting this critical information.
Very good article….