Smithfield residents who offer short-term lodging rentals like Airbnb now need a business license.

Town Council’s unanimous decision at a Sept. 1 meeting is intended to close a gap in town ordinances and provide an avenue to legitimize and regulate the local short-term rental industry. It also gives the town recourse to address any issues should they arise.

“Anyone offering short term rentals would have to submit the town’s new ‘short term rental affidavit’ and apply for a town business license,” Town Manager Michael Stallings and John Settle, Smithfield’s director of community development and planning, confirmed in an email.

Applicants should direct their inquiries to the Smithfield Community Development and Planning Department. Previously, there was “nothing to address short-term rentals in any Town Ordinance,” town staff wrote in a report. The ordinance amendment was effective Sept. 1.

A recent search of Airbnb showed three Smithfield properties available for rent. They ranged from $90 per night for a studio apartment guesthouse accommodating two within walking distance of Windsor Castle Park to $129 for up to three private rooms in a bed and breakfast, to $240 for a three-bedroom, two-bath cottage accommodating six that “is a great location for day trips” throughout Hampton Roads, according to the host.

The town’s new rules limit rentable nights to 104 per year, 30-day maximum stays and “accessory buildings” can’t be rented. Maximum occupancy is limited to 10 guests per unit or two people per bedroom at a time, whichever is greater. However, these development standards may be waived by town council following successful acquisition of a special use permit from the council, Stallings and Settle said.

“While overall host earnings have slowed since the onset of the COVID-19, we are beginning to see encouraging signs,” Airbnb wrote in a recent blog post. “Hosts in rural areas of the U.S., for example, earned over $200 million in the month of June, an increase of more than 25% over what hosts in these areas earned in June 2019.”

Because Airbnb can offer accommodations in places where hotels can’t, many new hosts are in smaller towns and remote areas, the company said. “Over 200,000 hosts across all 50 U.S. states plus Washington, D.C., earned at least $500 apiece from hosting in June. Of those, over 170,000, also across all 50 U.S. states plus Washington, D.C., earned more than $1,000 each.”

However, the revenue potential in Smithfield is not yet known. At this time, “we do not have an estimate on how much additional revenue the town would generate if short-term rentals in Smithfield stayed at current levels,” Stallings and Settle said.