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Assembly Punts on Airbnb

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Virginia could have been one of the first states in the nation to legalize the short-term rental industry, but after taking a good hard look at HB 812, the so-called Airbnb bill, the General Assembly decided to punt. The legislature will revisit the issue next year, reports the Washington Post.

Airbnb, whose web-based platform connects visitors with homeowners renting rooms, suites and entire houses, has run into opposition from the lodging industry around the country on the grounds that individual renters should be subject to the same taxes, laws and regulations as hotels. Rather than negotiate rules on a locality-by-locality basis, the San Francisco-based company has tried to hammer out laws at the state level.

Here in Virginia, Del. Christopher K. Peace, R-Hanover, took up the cause of small property owners and submitted a bill that would have legalized Airbnb while establishing a framework for collecting taxes and protecting neighbors against nuisances. He got pushback from Del. Tommy Norment, R-Williamsburg, who represents the hotel & lodging industry in the Williamsburg area.

According to the Post, legislators amended legislation to require stricter tax collection and penalties for noncompliance, but the laws must be revisited and approved again by the legislature in 2017. Meanwhile, the state will conduct a study of the short-term rental industry.
“We were making an effort to put Virginia on the map as being proactive, welcoming and embracing the new economy,” said Sen. Jill Holtzman Vogel, R-Fauquier, sponsor of a companion Senate bill.

“Airbnb is here to stay,” said Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association. “It’s something the consumer is interested in and wants to do. We welcome Airbnb, but we just think they should be subject to the same requirements that a bed-and-breakfast or a hotel has to go through.”

Bacon’s bottom line: Technology is scrambling the old economic order. Established industries instinctively utilize the power of government to buttress their dominant position from incursions by newcomers — see how the taxi industry lobbied to freeze out Uber and Lyft — but they are justified in asking competitors in the lodging industry to play by basic rules regarding the collection of taxes, protection of consumers, and the regulation of nuisance. If it takes a year for Virginia lawmakers to work out a thoughtful set of rules that allow small property owners to compete on a level playing field, the delay is arguably worthwhile. If used instead to allow the lodging industry to regroup and defeat the legislation, the delay will be a shameful blow to property owners.

The greatest debate of our era is over the distribution of income and wealth. Airbnb allows small property owners to generate income from empty basements and bedrooms. It is an equalizer that does not rely upon punitive taxation to redistribute wealth. Virginia legislators should make it their business to foster the adoption of new technologies that empower Virginians in small ways.

(This article first ran in Bacons Rebellion on March 14, 2016)

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