By CYNTHIA McCLOUD
The State Journal
CHARLESTON, W.Va. — Visitors to Shepherdstown from every continent except Antarctica have climbed aboard Will Sutherland‘s converted school bus to spend a night or two.
Since Sutherland and his partner Sabrina Hartley started listing the bus on Airbnb in December 2014, they have entertained guests from Pakistan, China, Ireland, Australia, Iran, Brazil, El Salvador, Mexico, Italy, the United Kingdom and more.
The pair may sound like a business anomaly, but they are some of the 500 West Virginians who earned a combined $2.9 million from Airbnb transactions in 2016, according to a news release from the company.
As more private homeowners participate in today’s sharing economy of lending or renting their possessions, some are finding they have to navigate city and county rules as carefully as a winding country backroad.
Getting Licensed
Some cities are more proactive than others. Wheeling works with its residents who want to list on Airbnb.When a Wheeling resident wants to rent out a room in a dwelling for overnight accommodations, city workers refer to a zoning map to determine in which district the property is located. In the Friendly City, space listed on Airbnb is considered a bed and breakfast or also called a tourist home.“Zoning code doesn’t differentiate between a typical B&B and Airbnb,” said Tom Connelly, assistant director of Wheeling’s Economic and Community Development Department.
Some zoning districts permit B&Bs, and others allow them with a waiver. But in some districts they aren’t allowed at all.
Wheeling’s definition of a B&B is a building that is the primary residence of the owner in which no more than 10 of the rooms are rented to transient guests on an overnight basis. Only breakfast may be served. There has to be one parking space for every rented room.
“The first step is to apply for and get zoning approval,” Connelly said. “If and when that’s done, I put them in contact with the assistant fire chief and the building code official. He may have them contact the electrical inspector, also.”
And because tourist homes are generating income, they are required to have business licenses. Property owners apply to the city finance office and pay a $15 fee. A house letting out fewer than three rooms is not subject to the city’s 6 percent hotel tax.
In Morgantown, which ranked fifth in Airbnb stays in the state last year, with 1,700 guests bringing $149,000 in income to hosts, city planners say all bed and breakfasts must be approved by the city, county and state as required.
“People providing listings on Airbnb may be operating illegally or outside of the confines of their specific private-lease agreements,” said John Whitmore, a Planner III with Morgantown. “In the event that the Development Services Department is made aware of an illegal use situation, the department coordinates a resolution with the property owner.”
He encourages visitors to seek more traditional lodging.
“The City of Morgantown recommends that visitors use bona fide lodging facilities to ensure a safe and pleasant experience,” he said. “Please contact the Greater Morgantown Convention and Visitors Bureau at 304-292-5081 for lodging facilities in and around Morgantown.”
Enter the Tax Man
Jim Ratchford is the assessor in Hardy County. He said he finds out about Airbnbs when his staff travels throughout the county appraising property. People in the homes tell the appraisers they are renting.“If someone is renting property, by state code it needs to be in a different class,” Ratchford said.Class II property is that which is owned, used and occupied by the owner exclusively as a residence. Commercial property that is leased to others is Class III.
Property tax is each county’s main source of revenue, according to the West Virginia Association of Counties. Schools get a big part of what is collected. Counties use about 25 percent to run their governments and provide services.
But for Sutherland and his school bus, there are no restrictions on how he can use his property because he lives outside Shepherdstown city limits. He said his homeowners’ insurance company says he is covered as long as the bus is still registered with the Department of Motor Vehicles.
“Airbnb has insurance built in to their business, and they tax me as well,” Sutherland said. “I pay federal and state taxes based off a rental income. I made all the calls necessary.”
Sutherland bought a 1997 school bus to turn into a recreational vehicle. He put in wood flooring and paneling and painted exposed metal with a dark stain to give it a cabin vibe. There is a bed and a sofa that folds out, a small woodstove and a table. Sutherland stocked it with board games and a tiny DVD player. It is air-conditioned in the summer.
Visitors use the bathroom in his house, 50 feet from the bus. When he decided to share the bus on Airbnb, it became so popular he decided to park it in his yard permanently.
He averages between eight and 12 bookings a month in winter; he get sometimes as many as 20 or 25 in the warmer months. Guests pay $59 per night.
What Will Neighbors Say?
Property owners must answer to local authorities, but renters who host Airbnb guests also might get in trouble with their landlords.“I think about every landlord has a lease that says ‘no subletting,’” said Jennifer McQuerrey, property manager at Old World Rentals in South Charleston. “I don’t know of anyone who specifically calls out Airbnb in the lease.”Patty Baisden has stayed in Airbnb properties and rented them for employees who travel to trade shows for her wind chime company. She said it is awkward when a lessor asks her to pretend she is a friend or relative if a landlord or neighbor asks why she is staying in an apartment.
“I’m in the elevator, and I’m hoping the next-door neighbor doesn’t get on with me and I have to remember the host’s name,” she said.
Baisden has experienced Airbnb as a neighbor, too. She owns a vacation home in Hardy County.
“I’m here about 90 nights a year,” she said. “I am literally surrounded by short-term rentals. It was not the case when I moved in three-and-a-half years ago. The community is not designed for it.”
Baisden said the problems she has with renters in Lost River are more about courtesy than crime.
“We have seen trash bags put out where the bear or raccoon is going to get them,” she said. “When we’ve had noise up here, it has never been when the homeowner is at their house. Homeowners are more aware of their neighbors and more considerate. The renters are not as neighborly as my neighbors.
“They’re not doing anything terrible. Most of the people vet their renters pretty well.”
But Baisden also knows of neighbors whose homes were damaged by renters. One had to replace his whole deck.
Baisden said the arrangements cost the whole community in terms of wear and tear on its roads.
“A homeowner can come and go, and they’re paying for the roads, but it is unlikely they’re going to have four or five cars going in and out every day,” she said, adding that large groups of renters at one property can show up in several cars.
Her community’s property owners association is not designed to have a lot of rules; it is set up to take care of roads and provide security.
Subletting is not addressed in the owners association agreement, she said. She doesn’t know whether most members of her association even know it’s happening if there are not Airbnbs near their houses.
But operating under the table goes against Baisden’s principles as a business owner.
“There’s a cost of doing business; there’s a cost of complying with rules; and every business experiences that,” she said.
When some Airbnb operators don’t report their incomes or pay taxes, Baisden said, it’s not fair to local, registered innkeepers or the county institutions that would benefit from the extra revenue.
“Many of the people that start renting on Airbnb just don’t realize they are starting a business,” she said. “They think it’s just like starting a Facebook page. You sign up and, la, la, la, I’m going to be protected; somebody comes and pays me money; and that’s great.”
Marketing Marvel
For West Virginians who run inns or bed and breakfasts — and already have the appropriate licenses — Airbnb is a fast track to potential customers.It has been almost a year since Angela Born and her family opened Country Road House and Berries in Clendenin, near Charleston, where Airbnb said the hosts earned $106,000 for 1,200 guest stays last year.Born said most of her guests last year came to her from the Airbnb listing she created after she wasn’t seeing a lot of activity on other booking engines such as Hotels.com. And she pays less for the exposure.
“Booking engines charge 23 percent to 27 percent of what we ask for people to stay here, and Airbnb just charges me between $3 and $5,” Born said. “I do have to take my taxes out of the price, so that would be another 12 percent, but that’s nothing compared to what I have to pay through another site.”
All the guests registered to stay in either her farmhouse or cellar house in April booked through Airbnb. She also takes reservations directly.
“The health department inspects me,” Born said. “I have to follow all their guidelines and have all the permits. The (West Virginia Bed and Breakfast) Association inspects me.
“A lot of people who rent space and they’re not paying tax and not dealing with inspectors just stopping by anytime, that gets a little frustrating,” she said.
Gary Halpern-Robinson, who owns Guesthouse Lost River, is president of the West Virginia Bed and Breakfast Association, which only recently adopted an official position on Airbnb.
“We do have traditional B&B owners who list on Airbnb and use it for the wonderful marketing tool it is,” he said. “It gains exposure for us to people who most likely would not find us through traditional marketing.”
“The place (where) a lot of people have issues with Airbnb is the company itself doesn’t do very much to educate owners to make sure they are in compliance with local and state ordinances and taxes,” Gary Halpern-Robinson said.
A section of Airbnb’s website dedicated to responsible hosting has pages explaining occupancy and other taxes and, in some areas, collects them for members.
“Airbnb is very much a part of the sharing economy, and I see that is where our marketplace is going,” Halpern-Robinson said. “Our state regulations and licenses are cut-and-dry for what you need to do for commercial use of private property.”
Airbnb hosts seem to have an unfair advantage over traditional innkeepers because the operator has lower overhead and can charge less.
Prices in West Virginia range from $27 to stay a night in a private room in someone’s home in St. Albans to $275 to lease an entire five-bedroom log house in Harpers Ferry. Travelers can spend $50 and stay in a yurt near Spruce Knob or in an apartment in Huntington or in a cabin on the Cacapon River.
Halpern-Robinson said the business owners who submit to inspections and pay more taxes would like to see regular people following the same rules for commercial use of their primary residences.
More Than Money
Airbnb says a typical host in West Virginia earned $4,600 a year from the home-sharing arrangements. According to its news release, hosts often use the extra money to pay mortgages and bills and supplement fixed, retirement incomes.Earning a little cash to fix up her 1897 Victorian brownstone was Glynis Board‘s chief motivation. She listed with Airbnb last August and hosted people from as far away as Shanghai and Tanzania.“I was constantly booked,” she said. “I had to turn people away.”
But she de-listed her spare room when she got a letter from the City of Wheeling asking her to get inspections and a business license. The city didn’t require her to stop, but she prefers to while she figures out the permits.
“I have to jump through all these hoops, and it has been a long, drawn-out process,” Board said. “It is frustrating to get tripped up by regulators who are just following the rules. It’s not that they’re bad people; they’re just doing their jobs. Everyone has been nice.”
She said Airbnb’s model builds in accountability with a self-regulating system of reviews.
“You go through all these checklists to make sure the house is clean and safe. Then the people who come in know what they’re getting into, and if anything is out of line, they can comment on that,” she said. “There are all these incentives to make sure everything is the way it should be, and if you don’t do it, then you get bad reviews.
“Then the city gets involved and wants to make sure all these things are happening, too,” she added. “Meeting with regulators requires extra time and coordinating schedules. And then the health department gets involved, and they want stainless steel counters and a fan — all these things I can’t afford. I don’t want a B&B as my primary business. I just want to rent out a room.”
If she ever lists again on Airbnb, she won’t be allowed to let her guests use the kitchen.
“I am happy to pay a tax, but I hate how difficult it is to do,” Board said. “There are so few economic opportunities for people in this state, and this is something that is actually positive, and it makes people invest happily in their communities.”
Board said it wasn’t just about making extra money.
“I was really doing it because it was easy, it was fun, it was something I could do on top of what I already do,” said Board, who is a journalist. “We like the adventure of it.”
Board lives with her husband, two children and a roommate.
“The other thing that is really awesome is it sort of forces you to make sure your house is really clean all the time,” she added. “Not only inside of the house, but the neighborhood. I found myself picking up trash and caring a lot about parking. All of a sudden I was more invested in my community.”
Board also believes the Airbnb model drives tourism.
“People are coming into my house, adding to the local economy, and I’m sending them to all these local restaurants and sending them to local stores,” she said. “They are genuinely interested in coming and staying in an old house in an old town.
“It is a unique placemaking experience that is trending right now throughout the whole country.”
But the payoff, after meeting local regulations, may not be big enough for some, Board said.
“It is not super-lucrative, and there’s not a huge incentive to go through all of that.”
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