Tag: Airbnbs

Virginia goes where Staunton falters

(Reading time: 11 minutes)

Why are local land-use decisions, as defined by building codes and zoning ordinances, left up to cities and counties? Why do federal and state governments generally relinquish their claim over this aspect of our lives?

The answer is seemingly obvious. The residents of Staunton (and Waynesboro and Augusta County) are far more aware of their local land-use needs than a bunch of politicians in Richmond or Washington, D.C. City councils and county boards of supervisors are closer to their constituents, and thus more responsive to their concerns at the grassroots level—and what is more grassroots than the homes we live in and the businesses we support? Local control is democracy in its purest form.

And yet. . . .

In just a couple of weeks we’ll reach the three-year anniversary of the first SAW Housing Summit, followed six months later by a second such assembly, the two events attracting scores of participants seemingly united by their concern over the area’s homeless population and its lack of sufficient affordable housing. Working groups were created, ideas were brainstormed, regular public luncheons on housing topics were scheduled. The city of Staunton assembled a housing strategy group that met for more than a year, culminating in the creation of . . . a housing commission that meets four times a year, apparently to continue talking.

That’s hardly gangbusters. All those consultant-driven meetings and community energy and self-satisfied hype produced not one additional affordable home, failed to remove even one homeless person from the streets. If local control is rooted in the idea that the lowest levels of government are most sensitive to the needs of their constituents, what Staunton’s political leadership has demonstrated is an understanding that its constituents need to talk about problems but not necessarily do something about them.

It’s sobering, therefore, to realize that the Virginia Assembly seemingly is more attuned to our local housing needs than we are. While we dithered locally, our state’s political leadership stepped into the breach this past year by adopting three bills that revoke local authority over certain housing issues and pass the initiative to the private sector. By doing so, the state essentially has concluded that local authorities are more of an obstacle than a constructive force in meeting their local constituents’ housing needs. The irony is that local officials are still waking up to the implications of what that means and of what lies ahead.

Here’s the rundown:

a) Manufactured Housing

An amendment to the Code of Virginia, effective as of this past March 31, explicitly prohibits localities from regulating manufactured homes more strictly than traditional “sticks-and-bricks” site-built homes. That means manufactured homes now may be placed on any lot that already permits single-family use; prior to this amendment, manufactured homes were restricted primarily to agricultural zoning districts, which is why you see them in the county but not in the city.

That could now change, and to the extent that “manufactured homes” are synonymous with “travel trailers,” the results may not be to everyone’s liking. Although the city’s planners are recommending a code amendment to require such homes be affixed to a continuous perimeter foundation, eliminating the unsightly skirting that conceals the space beneath them, the state’s amendment otherwise opens the door to single-, double- and even triple-wide trailers to be moved into residential neighborhoods. And while the state change limits issuance of certificates of occupancy to five years following the date of manufacture—meaning you couldn’t bring in a 10-year old trailer and try to have it approved as a permanent residence—the fact remains that many house trailers are constructed according to the CATNAP principle: Cheapest Available Technology Narrowly Avoiding Prosecution.

On the other hand, the state change also opens the door to innovative construction methods that can be faster, cheaper and more efficient than traditional on-site construction. “Manufactured home,” as defined by state law, simply means a structure that is transportable in one or more sections, each eight or more feet wide and 40 feet or longer, that is designed to be used as a single-family dwelling. That definition includes not just conventional house trailers, but prefab housing that is built in panels or modules in a controlled environment before being transported and assembled at their final destination.

That sort of thing is still a novelty in the U.S., thanks in part to the kind of zoning restrictions that are now struck down, but is far more common overseas. About 15% of Japan’s new housing is built this way, as are nearly 80% of the homes in Sweden, a country that has refined its approach out of climatic necessity. A factory setting offers numerous possibilities for automation, standardization and quality control, and there are some fledgling efforts in the U.S. to adopt this model for obvious reasons of lower cost and product consistency. Whether prefab housing will get a local foothold is an altogether different question—although as an aside, it sure seems worth investigating, by someone with just a bit of vision, as a possible manufacturing tenant for Staunton Crossing.

b) YIGBY housing

Officially known as the Faith in Housing Act, the “yes in God’s backyard” legislation requires that localities permit qualifying affordable housing developments “by right”—meaning no special permits or review are required—on properties owned by tax-exempt religious organizations and 501(c)3 nonprofits. The new law will become effective Jan. 1, when it will supersede any local restrictions on building density, height or setbacks, in an effort to help declining church congregations make better use of their underutilized property. (It should be noted that the law sunsets after four years.)

The problem of once-robust congregations struggling to maintain buildings and property they can no longer afford is particularly acute in Staunton, which has 76 churches by one local count, or roughly three times the national per capita ratio. Some, like the Marquis Memorial United Methodist Church, have multiple vacant buildings and sit on a couple of acres of lawn and parking lots devoid of more than a handful of cars. But Marquis Memorial is hardly singular, and the Central Shenandoah Planning District, which encompasses the SAW area, has 970 parcels owned by faith-based organizations, totaling more than 2,700 acres.

The new state law smooths the way for congregations wanting to build housing on their property, providing that at least 60% of the homes are reserved for affordable housing, defined as no more than 80% of the median income for rental units and 120% of the median for homes that are sold. With Staunton’s median household income at approximately $66,000 and “affordable housing” defined as no more than 25% to 30% of household income, that would result in monthly rents of no more than $1,100 to $1,320.

Those are still relatively high housing costs for individuals at the low end of the wage scale, but manageable for working couples. But as with the manufactured housing initiative, there are aspects of this code change that may irk some Staunton residents. For example, the city will have to allow a minimum of 20 housing units per acre, as well as building heights of 45 feet (with exceptions in historic districts), regardless of surrounding land use. The developments also may use up to 30% of their floor area for publicly accessible non-residential uses that are “ancillary” to the organization’s mission, including child-care centers, health clinics, coffee shops, fund-raising thrift shops, and so on.

The Staunton planning commission, presented with these changes in state law, authorized city staff at its Sept. 17 meeting to draft the necessary zoning code amendments, so watch for more developments here.

c) Accessory Dwelling Units

If there was one housing initiative that the city’s nascent housing commission seemed to take seriously, albeit in the same ponderous manner with which the city has approached all housing issues, it was the idea of breathing life into accessory dwelling units (ADUs). Incredibly, the state proved itself more nimble in getting there first.

Virginia’s authorization of ADUs basically doubles the carrying capacity of almost all residential land by allowing a second single-family dwelling on the same property, regardless of other zoning limitations. An ADU can be an attached or detached dwelling, must provide facilities for sleeping, eating, cooking and sanitation, and must be allowed under the same site plan and other approval procedures already required for traditional single-family homes. The state law permits localities to exercise only a few discretionary options, including the possibility of requiring that ADU leases must be for 30 days or more—in other words, seeking to ensure that ADUs can’t be built simply as income-generating short-term rentals.

The law also quite clearly states that localities may not “require compliance with any other requirements except as provided in this section,” a prohibition that the Staunton planning commission apparently decided to ignore.

Having wrestled with the ADU provisions for the past three months, the commission this past Thursday decided to ban short-term rentals in a primary dwelling “if the property contains an ADU.” That restriction, planning commission members contended, is a necessary “clarification” of the state law that closes the “loophole” created by the commission’s decision to ban ADUs from being used for short-term rentals. After all, what would prevent a homeowner from building an ADU—then moving into it as his own residence and turning his primary residence into a short-term rental? If the logic works in one direction, why not the other?

There are at least a couple of problems with that reasoning, starting with its disregard of the express prohibition on adding restrictions the state hasn’t already enumerated. But the bigger problem is that Staunton doesn’t have a permitting process for short-term rentals—nor, for that matter, does it have much of anything at all to say about the practice, in keeping with the city’s general aversion toward addressing housing issues. The only thing you need to operate an Airbnb in Staunton is to fill out a quaintly named, one-page “Homestay Registration” form with the city’s revenue commissioner and pay a $50 annual registration fee. Even that low hurdle may be getting ignored.

While the planning commission’s possibly impermissible amendment was offered on the pretext of honoring the intent of allowing ADUs—to create more permanent housing, a problem about which the planning commission has previously had little to say—both the commission and the city have  avoided paying any attention to the root problem. It’s been nearly a decade since Staunton reluctantly addressed the issue of short-term rentals, and the number of Airbnbs in the city has proliferated ever since. Revisiting the phenomenon is certainly worthwhile, since short-term rentals indeed are whittling down the city’s available housing stock, but shoe-horning a limited backdoor limitation on them in this manner is just asking for a legal challenge.

Meanwhile, as planning commission members obsess over details over which they have no control, it appears they’ve been completely oblivious to the honking big problem in the language they’ve approved regarding ADU size. The state’s legislation does not cap the size of an ADU but does allow localities to do so, provided they allow a minimum of either 350 or 500 square feet, depending on lot size. That’s enough for a comfy cottage. Staunton’s ADU language, however, states simply that the ADU’s size “shall be less than” that of the primary dwelling—which is to say, there’s nothing to prevent the owner of a single-family home of 2,000 square feet from building a second home (lot size permitting) of, say, 1,990 square feet.

Interesting.

The ADU law won’t go into effect until July 1 of next year, so the planning commission has time to continue poking at the thing and doubtless will, regardless of how futile that might be. Then again, no one else seems to be paying much attention. No one spoke at Thursday’s public hearing on the matter, suggesting that the default mode on housing issues at the local level is indeed inaction—but just wait. Wait until the first single-wide pops up on one of those nice half-acre lots in Baldwin Acres. . . .

On some tests a failing grade is better

(Reading time: 3 minutes)

Sometimes you can stumble across the most alarming news in the most unexpected places.

Case in point: Staunton today put out its February activity report, which includes a regular update on how many articles and stories have mentioned Staunton in the past month, as well as how many eyeballs may have seen them. Fourth on the list this time, with a “reach” of more than 40 million, was a piece on Realtor.com headlined, “Best Mountain Towns Where Homes Deliver the Strongest Airbnb Returns.”

Care to guess which “mountain town” came in tenth on the list? That would be Staunton, of course, where homes have a median listing price of either $370,000 or $418,000 (Realtor.com couldn’t settle on a single figure) and an “average annual revenue potential” of $43,000. “We are seeing investors with proven track records buy strategically in Staunton, where they know they can implement their knowledge of the market with robust design and differentiated amenities,” Realtor.com quotes Sydney Robertson, identified as a real estate agent with Loring Woodriff Real Estate Associates—which, as it happens, is based not in Staunton but in Charlottesville.

Robertson may be good at tossing word salads (“robust design and differentiated amenities”?), but it should be noted—especially since it was ignored by Realtor.com—that she also is chief sales officer for Carriage House STR. Carriage House, as of a couple of years ago, was operating scores of Airbnbs across central Virginia, including more than two-dozen in Staunton proper, to which it gave a thumbs-up for the city’s lack of short-term rental restrictions. So, not exactly a disinterested observer.

The list of mountain towns so conducive to making money for “investors” was created by AirDNA, a firm that compiles and analyzes Vrbo and Airbnb data. What makes cities like Staunton so attractive to people who think in terms of balance sheets, according to AirDNA chief economist Jamie Lane, is that all the really hot mountain destinations have gotten too expensive. That makes second-tier cities like ours look like bargains. “The markets on this list tend to benefit from steady, multiseason demand and more affordable home prices than those in top mountain destinations,” Lane elaborated. “That combination can create a more balanced investment profile, with strong revenue potential relative to acquisition costs.”

Just how much of a bargain Staunton represents is encapsulated by AirDNA’s ranking system, which looks at five variables to generate a score between 40 and 100. A score of 90-100 is an A. Waynesboro merited only a 70, Lexington and Winchester notched a slightly higher 74, but Staunton roared to the head of the class with a list-making 93. Which all sounds terrific for Staunton, until you realize that what’s being assessed is Staunton’s attractiveness for people who view housing as financial assets, not as homes.

The five variables feeding into this grade include investability, rental demand, revenue growth, seasonality and regulation—or, more accurately, the lack of regulation. Or to put it in English, Staunton offers high curb appeal year-round, with under-priced real estate compared to what the short-term rental market will pay. That may come as a surprise to Staunton residents who can’t find a house they can afford to buy, but that’s what happens when our housing supply is being picked over by people who don’t have to live here.

All the handwringing about Staunton’s lack of sufficient affordable housing is pointless as long as there’s essentially no city regulation of short-term rentals. Without it, the transformation of homes into business assets will continue, largely unseen and unchecked, and articles like this one reaching as many as 40 million people will only accelerate the process. That may be something for the new Staunton Housing Commission to ponder as it plots its future course.

A glimmer of hope for housing

(Reading time: 5 minutes)

The new Staunton Housing Commission, the city’s attempt to address issues of homelessness and an inadequate supply of affordable housing, got off to a rocky start with its first meeting last week. Two of its nine members were not present, and the meeting itself—one of only four scheduled for this year—occurred two months later than initially scheduled. Moreover, much of the meeting was marked by red flags waved by city planner Rebecca Joyce, who asked commission members to trust her efforts over the next year to steer their work.  

“We have to stay in a certain lane,” Joyce cautioned, warning against scattershot thinking on the one hand and thinking there is a magic formula to fix everything on the other. “Guard rails” were mentioned repeatedly.

For all that, the 30 minutes or so of group discussion that took place during the 75-minute session were the liveliest on the subject since the commission’s progenitor, the Staunton Housing Strategy Group, started meeting 18 months ago. This was, in part, due to the addition of new voices and perspectives that were notably absent from the strategy group, including those of Robin Miller, a developer, and Hans B. Kettering, a young man searching for housing he can afford while working for Fisher Auto Parts. So perhaps there’s hope for some innovative thinking.

One hint of a possible clash of ideas and values came, interestingly enough, from city vice mayor Brad Arrowood, who was an early proponent of creating such a commission. Noting that Staunton has more cows than most cities its size because of its more than 2,000 acres (of less than 13,000 total) zoned for agricultural use, Arrowood suggested that this flat and gently rolling land could eventually be developed for housing.  That contrasted with an observation made later in the meeting by Miller, the developer, who noted that building out a road map—that is, building roads, curbs, sidewalks and utilities, including electric, water and sewer lines, plus storm drains—currently costs between $1,700 and $2,000 a linear foot.

Imagine what that means for an entire traditional subdivision. With the exception of Bell’s Lane, a narrow asphalt road, Staunton’s ag-forestal district has none of that infrastructure, so building housing there will be enormously expensive. So expensive, in fact, that there’s only two ways it can happen: either by building very large, very expensive homes, or by building lots and lots of homes within a much smaller footprint. Easier, cheaper and faster, Miller offered, would be to fill in what’s already here, building on vacant lots in the developed parts of Staunton. Indeed, he added, one of the quickest ways Staunton could generate more affordable housing would be to allow greater density overall, and to allow accessory dwelling units (ADUs) in particular.

ADUs have become exactly the kind of quick-fix housing solution that makes Joyce fret, universally offered as a sure-fire way to get more people housed by allowing property owners to build second or even third homes on their existing lots. They invariably come up in these discussions because they’ve become so widespread—elsewhere. Miller mentioned that Richmond just recently adopted an ADU ordinance, despite heavy opposition. A map I published back in November showed the stark contrast locally, with Staunton and Waynesboro as non-ADU islands surrounded by the ADU-receptive sea of Augusta County.

Although the Staunton Housing Strategy Group ostensibly embraced the ADU approach, the formal housing strategy it presented to city council last fall slow-walks the concept—and one possible reason was advanced by Arrowood, who told last week’s commission meeting that it’s fraught with possible unintended consequences. What if, he suggested, homeowners on large lots put up several ADUs, only to position them as short-term rentals, or Airbnbs?  Staunton would be helpless to prevent a transformation of quiet residential neighborhoods into beehives of transient activity, while scarcely increasing the amount of affordable housing for teachers, fire fighters and other essential workers.

The obvious response is not to obstruct ADUs but to regulate Airbnbs, as other Virginia localities already do. Albemarle County, for example, requires short-term rentals to be on a minimum of five acres with a rural zoning.  But a regulatory approach runs into another philosophical roadblock, which Arrowood also articulated and which goes a long way toward explaining why Staunton is in the spot it’s in: houses are private property. They’re not just homes, but financial assets.  Airbnbs are property owners’ entrepreneurial effort to better themselves, comparable to the boarding houses of yore, when widows would let out their spare rooms to working class stiffs who couldn’t afford their own homes. Any attempt to regulate such enterprise would be downright un-American.

Airbnbs, which are rented by the day, week or month to transient guests, are nothing like boarding houses, but the comparison appeals to a certain rosy nostalgia. It also highlights the tension, albeit not one that was further explored at last week’s commission meeting, between two opposing views of how we move from here. On the one hand, an assertive embrace of a higher density and infill strategy that builds on what already exists; on the other, a long-range contemplation of how a blank canvas, otherwise known as the ag-forestal district, might be shaped while avoiding upsetting the status quo.

As with many such tensions, the outcome most probably will lie somewhere between the two. But it will be interesting, in the months ahead, to see how clearly these differences are articulated by commission members and how they’re resolved. That could make for more of the animated conversation that showed briefly last week, before Joyce threw up those guard rails, and just might lead to a more durable and meaningful consensus.

* * *

March 11 postscript/clarification: I’ve misstated Hans Kettering’s interest in local housing issues, as he wrote to let me know that he has decent housing and an amicable relationship with his landlord. As Hans further noted, “I was speaking for friends and people of the community that can’t find anything in Staunton at a reasonable price.” My apologies for my mistake.