(Danville) — City staffers are getting some pushback on proposed new fees for Air BNBs and other short-term rentals.
The proposed 24-25 city budget establishes a short term rental fee which would generate $105,000 in revenue. That fee would be 250 dollars for the last half of this calendar year, and a full 500 dollars per year starting in January.
But Martha Ray told Danville City Council this week there are no comparable fees for other rental uses. “I don’t mind paying for any of this if the rules are the same for all rentals,” Ray said. “I feel that short-term rentals are being punished and singled out when they are the only rental that is putting money in the city’s pockets.
Ray also pointed out that short-term rentals were being taxed for the furniture in their units. City Manager Ken Larking says that’s the interpretation of the city’s Commissioner of Revenue. “If you’re operating a business, then the furniture within that business is subject to the Personal Property Tax,” Larking said. “City Council could make some changes to adjust that if you wanted to.”
Larking says the proposed fee will cover the costs of inspections of short-term rental units. The goal is to get revenue from the customers who are using this service while reducing burdens to taxpayers who are not using it. Larking adds that the numbers were “benchmarked against peer cities to make sure they are competitive with what others charge for these services.”
But Councilman James Buckner says the Air BnB industry does a good job of self-policing. “If you get several bad reviews, Air BnB will remove you from the site all together, they won’t allow you to rent to anybody,” Buckner said. “So its beneficial to the homeowner and the owner of the business to keep their properties nice.”
And Buckn
er says the $500 annual inspection fee is a bit much. “A $500 inspection fee on a property of any sort is a bit heavy-handed, I think.”
Last year, city leaders changed the way they approve short-term rentals. New regs adopted earlier in the year allowing Air BnBs with a Special Use Permit led to dozens of requests each month. Instead of a permit, the city changed bylaws to require owners apply for a Special Exception Permit with the city’s Board of Zoning Appeals.
Last year, Council tabled a Planning Commission recommendation to set a maximum of 150 short term Rentals in the city. That would have come out to about one-percent of the total land parcels in Danville. At the time, Planning Director Renee Burton said there were over a hundred short-term rentals operating in the city, but only thirty had permits.
Council approved a first reading of the new fee this week. A final vote is set for later this month.