VIRGINIA GENERAL ASSEMBLY WRESTLES WITH ACCESSORY DWELLING UNITS (ADU) AND SHORT-TERM RENTAL (STR) REGULATION; A COURT RESOLVES A CASE ABOUT A COUNTY ORDINANCE- Senate Bill 304 seeks to preempt local authority on both ADUs and STRs and is vague and incomplete in its provisions. The bill requires a locality to include ADRs in its zoning ordinances for residential districts as a permitted accessory use. A property owner must obtain a permit for an ADU and if the property meets certain enumerated requirements the locality must issue the permit. The bill prohibits the locality from requiring special rear or side yard setbacks and prohibits any requirement for any familial relationship between the owner and the occupants of the ADR, thereby making ADRs available for STR. The bill ran into various headwinds, particularly from resort area groups. As a result, it has been carried over until next year’s General Assembly session and there is work to be done to prevent the State from usurping local authority over the content of its zoning ordinances. In the meantime, a locality’s ordinance regarding STR was the subject of court action. A short-term rental ordinance was upheld in Albemarle County. A real estate investor purchased a home at a neighborhood with large lots with the intent to utilize it for short-term rentals. The Board of Supervisors denied the proposed use because the owner wanted a special exception to go beyond the permitted two-bedroom use for short-term rental and proposed five bedrooms. In order to achieve the five-bedroom use there was a requirement that it be determined that the use would not affect the character of the neighborhood. The property owner claimed such a consideration as a component of the public welfare was constitutionally vague and said the Board acted unreasonably by not hearing expert testimony about the neighborhood. The Circuit Court upheld the denial of the permit. The property owner appealed and Virginia Court of Appeals upheld the Circuit Court stating it is clear that when zoning administrators consider the character of the area as a part of their analysis of an application for a permit, that consideration falls within the umbrella of their duty under the ordinances to maintain convenient, attractive, and harmonious communities. Short-term rentals have become more and more popular over the past few years with advent of Airbnb and VRBO among others. It is no surprise that limits of tolerance are being tested, resistance is more frequent and the need for regulation has become more apparent. We will be paying close attention to these issues and will keep you apprised of further developments. In the event you have questions about any of the content of this letter please feel free to give us a call.