ORLEANS – “We can’t go back to the good old days,” Dick Hartmann of the Orleans Planning Council stressed on Wednesday, “but we can prepare for what we anticipate that is detrimental.”
Hartmann did not fondly remember soda shops, sock-hopping and lollipops. He was referring to just a few years ago when families rented their Cape Town homes for a few weeks in the summer. Today these short term rentals are a whole new world.
“We are dealing with a business model that did not exist 10 years ago,” said Jeff Runyon, board member of Orleans Select. “The power of the internet has adapted entrepreneurial expansion to what we see today. The ability to rent homes one night, two nights at a time.
More than 700 short-term rentals in Orléans
The growth of the local short-term rental market prompted the Select Board to ask the Planning Board at Wednesday’s joint meeting to consider curbing a new source of town revenue that is also disrupting the lives of some residents. According to state records, there are 711 short-term rentals operating in Orleans out of approximately 3,500 residences.
“We live on a private road with deeded rights to a beach and a house was sold that had one occupant for 50 years,” Nancy Jorgensen told the councils. “It was bought by someone from California. It now rents out to 15 people a week, advertises four bedrooms when it’s only approved for three, and the story gets worse from there.
“We are only in (the) third or fourth week and the first two weeks have been disastrous. For all practical purposes, it is now a banquet hall and a shopping complex. If we do not move forward, there’s so much money to be made, this house rents for $12,000 a week.
Previous report:Orleans weighs the regulation of short-term rentals
The state of Massachusetts now collects a 5.7% tax on all short-term rentals (less than 30 days at a time) that are registered with the state. Cities can add a local option tax and Orleans added a 6% tax which raised $1,122,286 in fiscal year 2021 for the city.
This money was paid into the sewage stabilization fund which will cover the initial operating costs of the sewer and sewage treatment plant. The fund will also be used to cover the annual bond payments that financed the downtown sewer. The city wants the revenue, but it also wants to rein in the problems caused by short-term rentals.
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“The effort to allow this and create a regulatory framework for this business is done in an effort to protect full-time principal residents of this city, which is a class of people who use short-term rentals as a way to supplement their income to afford to live in the city of Orléans,” said Select Board member Runyon.
But how do you separate the old model of a landlord renting a house for a month or more from what might be closer to an unlicensed hotel?
Rather hotel rentals
“What is the problem?” asked planning board member Debbie Oakes. “I moved here in 1993 and almost all the houses belonged to someone else who rented them out in the summer. We couldn’t get a yearly rental because it didn’t exist. I would like to understand exactly what has changed and who makes it a problem? »
“You had it on a smaller scale, a smaller operation,” said board chair Andrea Reed. “You haven’t had problems with big parties, weddings, problems with garbage, noise, parking, when we have too many people in a house, so you have a septic (over)load.
“We envision a business hotel that has a very different character and impact than quiet neighbors coming in and out,” she added.
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“I would like to have some documentation before I try to regulate people’s use of their property,” Oakes said. “Theoretically, these people are the same people who have owned houses for years and rented them out and I don’t know how you’re going to tease these big corporate investors who run party houses… It’s a different animal.”
City administrator John Kelly said the overall problem was “the commercialization of the residential area”, some of which could be addressed by zoning and some by passing a bylaw.
Proposed short-term rental rules
The Select Board asked City Attorney Michael Ford to design a draft regulation which is still in flux.
The regulations propose to register short-term rentals with the Board of Health. The rental must comply with health and safety rules and other regulations and the landlord must file an application and sworn affidavit with the board of health. Registration would be renewed annually for a fee to cover inspections and other costs. Registration would be non-transferable.
It also prohibits tenants from subletting their short-term leases. The owner must remove the garbage weekly.
Maximum occupancy would be two per room plus two. The draft bylaw proposed a visitor limit at any given time, but council members noted that could be difficult to determine.
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A list of occupants must be kept for two years. All parking must be on the property and not off the premises.
Failure to comply with the regulations could result in fines of $100 to $300 for the landlord with similar fines if occupants violate the rules. Jorgensen pointed out that a $100 fine wouldn’t mean much if someone rented the property for $12,000 a week.
“We are now in a mode where people are capitalizing on the beauty of the environment because they can afford it,” said Select Board member Kevin Galligan. “They’ve got their own pool, fire pit, as much parking as they want, and it’s going up on Airbnb – sleeps 20, $4,000 a night, and you have a waterfront view.”
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He was actually describing the kind of house across from his own and adding that he could count the number of visits from police, fire and rescue services.
So, says Reed, the goal is to have the terms of reference bylaw for the fall town hall. It will require a public hearing, he said.
“Our understanding is that no city does that yet. We’re the first,” Kelley said. “When you have properties bought by people who never intended to be here. We have unauthorized, unregistered property that is not operated appropriately. This poses a major problem for the city when we don’t have (the) tools to enforce compliance. »
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In fact, other cities have tackled it. Barnstable changed its short-term rental regulations in 2020, capping the number of units at 1,500, increasing fees, setting a three-day minimum stay unless the landlord is on site. In April, Provincetown added fees on professionally managed short-term rentals. Runyon said Wellfleet charges a community impact fee for professionally managed properties.
“If we’re looking to maintain the quality of life in residential areas, I think that’s great,” Planning Board member Alice Thomason Van Oot said. “Seeing some of the homes used in this way is just scary. You don’t choose to live in a residential area of Cape Cod to live near a hotel. I wonder if it wouldn’t be better to look at this from the zoning point of view, because a hotel in a residential area is a business.”
It would be a company that is not authorized. But it’s not that easy.
“You have 5,000 units in town, 3,500 single family homes, you have 700 existing short-term rentals and under zoning they would all be grandfathered (with pre-existing use),” said city planner George Meservey. .
“Boston has a rule that a short-term rental of less than 30 days must be an owner-occupied building,” Hartmann noted. “I’m all for regulation to begin with.”
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