SHORT-TERM RENTALS, via Airbnb or its competitors, have gone from being the budget traveler’s best friend and a source of cash for hard-pressed homeowners to a purported destroyer of neighborhoods, devouring rental properties.
Boston Mayor Marty Walsh’s latest effort to regulate short-term rentals is grounded in that love-hate relationship with the industry. The truth, however, is infinitely more complex, and the current effort to virtually outlaw investor-owned short-term rental properties is fraught with unintended consequences.
And, of course, on Beacon Hill the Legislature continues to wrestle with how it will tax short-term rentals. A House-passed bill proposes a needlessly complex three-tiered system based on the number of rental units owned and putting the Department of Revenue in charge of maintaining a rental registry — for which it is ill-equipped. The Senate has opted for merely extending the state’s lodging tax of 5.7 percent and local-option room taxes and leaving registration to cities and towns — where it ought to be. No wonder the bill has been in conference committee for more than a month as lawmakers look for a compromise.
Memo to lawmakers: Every other New England state has been collecting taxes on short-term rentals for more than a year — some for several years.
Meanwhile Boston is attempting to fill in the regulatory blanks. Walsh filed a perfectly sensible bill last January, calling for registration of all short-term rentals, regulation by Inspectional Services, and modest registration fees based on whether the rental was a spare bedroom, an entire unit (while the owner was away), or strictly investment property.
A second version sent to the City Council this month, however, would virtually ban short-term rentals in “non-owner, non-tenant occupied residential units.”
The mayor either bought into the mythology that somehow that ban would free up countless new long-term rental units — or he wanted to give a special gift to the hotel industry, which has lobbied long and hard against Airbnb in particular and short-term rentals in general.
City officials insist there are at least 2,000 apartments that are being diverted by the short-term rental market. Airbnb disputes the figure, noting that active “entire home” listings (in other words, not that spare bedroom), as of Jan. 1, 2017, numbered in total 2,750 (or 1 percent of Boston’s total housing stock). During 2016, Airbnb’s data found only 320 entire home listings in Boston were rented for more than 162 nights — considered a “break even” point against the long-term market.
Among those operating in the now demonized “investor” class is Sonder.com, which markets itself (on its own website and through Airbnb) in 12 cities around the world as a “deconstructed hotel.” It currently leases some 200 units in Boston in Class A apartment buildings (where regular rents would average $3,793) that might otherwise be vacant as developers enter the “lease-up” phase.
Sonder is large enough and nimble enough to repurpose its units for, say, longer-term corporate use. But other landlords and developers will simply end up with vacant units if Walsh’s proposal becomes law — units that could mean serious new revenue for Boston.
The city could, of course, use its proposed registration system to help contain and control such lease arrangements. But that would require thought and data-based solutions from a market it simply doesn’t yet understand — rather than the blunt instrument of an ill-advised ban.