State short-term rental rules put Airbnb and bed and breakfasts on equal footing

NORTHAMPTON — Airbnb hosts and others who rent rooms in their homes on a short-term basis must register with the state, purchase insurance and pay state lodging taxes, based on a new state law signed by Governor Charlie Baker in late December that goes into effect July 1.

While the law is expected to generate $25 million a year for the state, for city leaders the long-awaited legislation finally gives them the opportunity to begin exploring how to better oversee those who participate in the industry and craft rules. compliance.

“I will be bringing local building and health officials together to look at the kinds of regulations we may want to put in place for Northampton that we are legally allowed to do,” said Northampton Mayor David Narkewicz.

Narkewicz said the possibility of regulating short-term rental businesses more broadly had been discussed for several years, but the decision was made to wait for the state to enact rules.

There is already an infrastructure for inspections of many types of accommodation, including hotels and bed and breakfasts, so Narkewicz said the key will be to apply this existing local process for licensing and safety inspections to Airbnb rentals.

Amherst’s planning director, Christine Brestrup, said officials are preparing to begin work on Airbnb.

“We are certainly interested in looking into the matter. We were waiting for the state to enact regulations,” Brestrup said.

Brestrup said she would meet with building commissioner Rob Morra and deputy city manager David Ziomek and figure out how to fix the problem, either through zoning or by-laws.

Bed and breakfasts, for example, are listed in the accessory uses section of the zoning bylaw, Brestrup said, which allows landlords to rent to three or fewer people at a time without obtaining a special land use permit from the Zoning Appeal Board.

To collect local lodging taxes on short-term rentals, Narkewicz said he understands communities need not take any action if they have accepted local option status, which means Northampton and Amherst would automatically obtain the 6% room occupancy tax already collected from hotels and motels.

One aspect of state law that Narkewicz wants to learn more about is “managed apartment building,” which are short-term rentals by operators who don’t live in the properties and rent two bedrooms. or more at a time. . An additional 3% local option tax may be levied on these properties, which has driven up rents and limited the housing stock.

“One of the impacts of room sharing has been the impact on the availability of long-term rental units,” Narkewicz said.

Airbnb

State law, however, is not popular with Airbnb.

Airbnb spokeswoman Liz DeBold Fusco said in a statement that the company is proud of the community it has built in Massachusetts.

“While we are deeply disappointed with the flawed bill that emerged from Beacon Hill during the lame duck session, we will continue the fight to protect our community and the economic engine of short-term rentals for hosts, guests and local small businesses,” Fusco told me.

Andrew Kalloch, head of public policy for Airbnb in Massachusetts, said the company has long supported simple reforms, including provisions for lodging tax collection, with platforms getting money from anyone who rents a room or house at least 15 days in a calendar. year.

But Kalloch said the state law is a “complicated regulatory regime” that will put up barriers, including for the many seniors who use Airbnb as a way to age in place.

“This is the first time a state has required each individual host to register,” Kalloch said. This carries the risk of personal and private information being available online for anyone to see and could intimidate hosts, he said.

Kalloch said Airbnb is ready to work with the governor and his team on administrative issues caused by the law.

In Massachusetts, the company says it has about 15,700 active hosts, of which 60% are female and 22% are 60 or older. Typical hosts made around $7,800 a year sharing their home for three or four nights a month.

Statistics provided by Airbnb show how popular it is in the area, with around 330 active hosts in Hampshire county, more than three-quarters of whom are women and around one-third are aged 60 and over. A typical host made $5,500 last year sharing their home three to four nights a month. In 2018, Hampshire County Hosts hosted 25,400 guests and brought in a total of around $3 million.

During the same period in Franklin County, about 200 active hosts earned an average of $4,400 a year sharing their homes two to three nights a month. In 2018, Franklin County Hosts hosted approximately 11,700 guests and grossed a total of approximately $1.3 million.

Sharing space

Kitty Axelson-Berry said she uses her Stony Hill Road home in Amherst as part of the sharing economy, not as a business.

“It’s an opportunity to share extra space and provide a warm home for visitors, a responsibility I take seriously,” Axelson-Berry said.

She is not against registering or paying additional taxes or fees, even though it might increase the cost of providing what has been cheap temporary accommodation.

The inspections and insurance requirement, however, place a burden on the city. “Adding layers of bureaucracy is counterintuitive unless it serves a purpose, which it doesn’t seem to do,” Axelson-Berry said.

Lydia Berry, who helps with Airbnb rentals for TIA Architects on Main Street in Amherst, said having an official registry of people who house in a community is good for public safety and awareness, and beneficial for planners to better understand their jurisdictions.

“I also think taxing Airbnb hosts the same as other hospitality companies is only fair,” Berry said.

But like Axelson-Berry, Berry said she was concerned about licensing, which could impose expensive facility inspection costs and standard license fees, and would in effect create a system for monitoring such operations.

wait a long time

For those who run traditional bed and breakfasts, the new state law means that the level playing field will be leveled and Airbnb owners will have to follow most of the rules that other innkeepers and hoteliers follow.

“I’ve been waiting for this for a long time and think it’s a great idea,” said Craig Della Penna, who has owned and operated the Sugar Maple Trailside Inn for 15 years. “Airbnbs will come out of the shadows, so to speak.”

More than 90 operate within 10 miles of Northampton Town Hall, Della Penna said, but they are off the radar screen with no municipal inspections carried out and no signs of their presence.

He noted that being underground means they are not part of chambers of commerce, bed and breakfast associations or the Hampshire Regional Tourism Board. Della Penna considers that a centralized calendar and information on available rooms would be a good thing.

“I would like to implement them within the Northampton Area Bed and Breakfast Association,” said Della Penna.

The state law closes a loophole in which bed and breakfasts with three bedrooms or less are no longer exempt from paying state and local lodging tax. While prices will go up because of this, Della Penna said it will benefit the state, rather than seeing money dumped in San Francisco, Airbnb’s headquarters.

Joan Stoia, who operates Centennial House in Northfield, worries the state law was passed years ago.

“The legislative response is too little, too late,” Stoia said.

She noted that she should educate herself on public health and serve food in a safe manner, carry insurance, have fire extinguishers and an adequate exit.

“We do what should be done if you are a professional innkeeper,” Stoia said.

Airbnb, on the other hand, has been disruptive and allowed people to break the rules, being run by what it calls “a group of kids in San Francisco who found ways to scam millions of dollars from venture capitalists”.

Stoia said society needs to discourage the sharing economy.

“It’s not a substitute for a living wage,” Stoia said. “Renting out your kid’s room when he’s in college to earn a few bucks doesn’t replace the fixed salary of the past 20 years.”

She advises communities to use their zoning to address the short-term rental phenomenon. For example, in Northfield, a commercial area is the only location for retail stores, restaurants, and bed and breakfasts.

Massachusetts Lodging Association President Paul Sacco said in a statement that he supports the law, observing that Airbnb has driven up rents and disrupted neighborhoods.

“By moving to a fairer level playing field between short-term rentals and traditional tenants, lawmakers have made great strides toward a fairer and more sensible system,” Sacco said.

Scott Merzbach can be contacted at [email protected]

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