Business

Walsh aims to rein in short-term rental market

Carl Court/Getty Images/File

In a bid to ease Boston’s persistent housing shortage, Mayor Martin J. Walsh is seeking to rein in Airbnb and other online services that have turned thousands of apartments and condos into de facto hotel rooms.

After more than two years of research and discussions among City Hall, housing advocates, and rental companies, the Walsh administration on Monday will propose limits on how frequently landlords can offer their units for short-term stays as opposed to conventional 12-month leases.

If approved by the City Council, the measure could potentially free up as many as 2,000 units for long-term renters, according to city officials. It could also undermine a burgeoning industry in which landlords lease apartments by the night to tourists, business travelers, and other visitors.

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“We want rental apartments to be used for Boston residents,” said Sheila Dillon, Walsh’s chief of housing. “This will discourage the use of apartments as full-time short-term rentals, and we hope it will put them back into the rental market.”

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The Walsh proposal would restrict short-term rentals to 90 nights a year for owners who rent an entire apartment, condo, or house on a short-term basis. The city would set looser guidelines for owners who rent a spare bedroom.

Like many cities across the country, Boston has been wrestling with how best to regulate short-term rentals. Critics say such rentals have turned parts of some buildings into unregulated hotels, reducing the city’s housing inventory for residents and contributing to some of the highest rents in the country.

The practice has exploded in recent years thanks to platforms like Airbnb, which enable visitors to rent an apartment for the night, just like they would a hotel room. In turn, the number of short-term rentals has surged, and some landlords have decided it’s more profitable to lease apartments by the night than to get year-round tenants. City researchers found about 2,000 apartments in Boston that were leased, on a short-term basis, an average of 235 nights last year.

In crafting the legislation, Walsh administration officials said they wanted to restrict full-time short-term rentals, while enabling residents who earn extra cash by renting out a spare room, or their whole house while out of town, to keep doing so. So they divided the short-term rental market into three categories: people renting a spare room; people renting their primary residence while out of town; and people renting a unit where no one lives full time — with different rules for each.

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“We’re trying to craft a balanced approach to allow folks to improve their personal economic situation, while at the same time putting in some controls to make sure we’re not losing long-term housing to a short-term commercial market,” said Chris English, a city policy analyst who worked on the bill.

The Walsh plan is just an initial proposal that will undergo a full round of hearings, and likely changes, in the City Council in the months to come. Neighborhood groups that have pushed for tougher regulations said it’s a good first step, but they still hope for more guidelines to prevent landlords from listing multiple properties on platforms like Airbnb.

Mayor Martin J. Walsh’s proposal would restrict short-term rentals to 90 nights a year for owners who rent an entire apartment, condo, or house on a short-term basis.
Keith Bedford/Globe Staff/File
Mayor Martin J. Walsh’s proposal would restrict short-term rentals to 90 nights a year for owners who rent an entire apartment, condo, or house on a short-term basis.

“The most important thing we don’t see is a restriction on multi-unit ownership,” said Ford Cavallari, chairman of the Association of Downtown Civic Organizations. “It’s not so much the single-unit [renter] who is impacting the housing market. It’s the owner of a 20-unit apartment building who’s listing the whole thing on Airbnb.”

Meanwhile, there will probably be pushback from short-term rental operators themselves — some of whom existed long before Airbnb transformed their industry — and perhaps from the industry giant itself, which researchers note gets an outsized share of its revenue from full-time hosts as opposed to people with spare bedrooms. City officials said they talked with Airbnb officials as they crafted the measure.

An Airbnb spokeswoman Friday said the company hasn’t seen the final proposal, but she pointed out that more than 80 percent of the company’s 3,000 hosts in Boston are people “sharing their primary home,” not professional landlords.

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“We are pleased that the city of Boston is making progress on regulations for our home-sharing community,” said the spokeswoman, Crystal Davis. “We look forward to reviewing the full proposal.”

Walsh’s proposal could also prove thorny for developers and big landlords. It’s fairly common for large apartment buildings, especially downtown and in tourist-friendly neighborhoods, to lease a block of units to short-term rental operators. That would prove harder under Walsh’s plan.

Dillon said city officials understand the downside, but their chief concern is helping Boston residents afford the cost of housing here. If they can get full-time short-term rentals back into the hands of regular tenants, she said, they could put a meaningful dent in rents.

“This is a growing business, and it is taking housing off the market,” Dillon said. “If we don’t do something now, we think that 2,000 units is very much going to keep growing.”

Tim Logan can be reached at tim.logan@globe.com. Follow him on Twitter @bytimlogan.