Boston Moves to Regulate Short-Term Rentals Like Airbnb – Next City

Boston Moves to Regulate Short-Term Rentals Like Airbnb

(Photo: Rick Berk)

Last October, a group of protestors organized by the Chinese Progressive Association, Community Labor United, Massachusetts Affordable Housing Alliance and UNITEHERE,​ marched through Boston’s Chinatown and downtown to a rally at the Massachusetts State House. Their message: investors on Airbnb and other short-term rental platforms are buying up property to serve as short-term rentals, putting even more strain on the already tight long-term housing market and displacing low-income residents in the process. As has been the case just about everywhere, the new market created by short-term rental platforms moved far faster than regulators in Boston.

“Chinatown is a small neighborhood and we’ve been deeply impacted by gentrification and displacement,” says Karen Chen, Chinese Progressive Association’s executive director. “We’ve been seeing a lot of whole units and whole buildings turned into short rentals that used to house long term residents. People who lived in Chinatown for many years and relied on doctors and social services here are being displaced.”

On Monday, Mayor Marty Walsh filed a proposed ordinance to change that dynamic by regulating short-term rentals. Much like Seattle, New Orleans and others, Boston’s goal is to allow homeowners to generate extra income by renting their own homes while discouraging commercial operations from using the platforms to turn long-term rental units into more-profitable short-term listings. Some critics say, however, that anything short of a full ban on rentals in non-primary residences will leave the door open for a continued loss of housing in Boston.

The proposed regulations create three categories of hosts, all of whom would have to register with the city and pay an annual fee. Limited Share Units are listings for an extra room in a host’s home where the host is onsite at the same time as the guest. There will be no limit on the number of nights per year a Limited Share Unit can be rented and the annual fee is $25. Home Share Units are a host’s primary residence (for at least 9 months of the year) that gets rented out as a whole when the host is not there. Home Share Units will be limited to 90 nights of rentals per year and pay a $100 annual fee. Investor Units are any non-primary residence listed for rent on a short-term platform. These could be an apartment or condo previously available for long term rental, a vacation home or units purchased specifically to rent on the short-term market. Investor Units are also limited to 90 nights a year of rentals and will pay a $500 annual fee.

Under the regulations, hosts will have to register with the city. The city’s hope is to create memorandums of understanding with each platform company to establish a data sharing standard that will allow the city to regulate hosts. Homes with multiple outstanding code violations will be barred from hosting. Existing bed and breakfasts and licensed lodging houses are exempt from the proposed rules.

“We’ve tried to put forward a balanced approach to allow short-term rentals as a way for people to make extra money on the side,” says Chris English, a policy analyst with the mayor’s office. “But having some control over losing a significant number of units to the short-term rental market will be the most important piece of a successful policy moving forward. With the nature of the housing situation in Boston, it’s important we do a whole range of programs to keep units on the long-term market.”

Boston rents have risen steadily in recent years. A recent housing report found that the increases are finally slowing down, but available housing stock is mostly “concentrated at the high end of the market” and that there are “persistent affordability challenges for working-class households.”

Because the platforms did not provide the city any data about the current short-term rental market, English and his colleagues had to scrape the listing sites themselves to get a picture. Their best estimate is that there are about 5,500 active listings in the city and 2,000 of those are whole units listed full time. The average unit is rented 230 nights per year.

A report by Community Labor United found that across all Airbnb listings in Boston, 12 percent of operators earn 45 percent of the revenue generated in that city, indicating that a number of operators own many units. English says they found hosts with dozens of listings and some with as many as 100 listings. He admits, “the cleanliness of our data limits how confident we can be, but there are definitely power hosts.”

A regulation is only as good as its enforcement. Failure to comply with the regulations will result in fines from $100 a day to $300 a day. Without good data from the platforms, it will be very difficult to enforce the 90-day limit. And English admits getting that good data could be a challenge as the platforms have been reluctant to do so in most cities with short-term rental regulations. The platforms often anonymize the data making it hard to connect listings to hosts.

In New Orleans, which has a similar 90-day limit on short-term rentals, hosts have been able to get around the regulations by renting for 90 days on one platform, then switching to another platform (for example, switching from Airbnb to VRBO). Unscrupulous hosts can fly under the radar by not registering with the city at all, on the bet that it will take a long time for a neighbor to report them or the city to track them down.

Howard Greenwich is senior policy advisor with Puget Sound Sage, a Seattle-based grassroots community advocacy organization. Sage produced a report on the short-term market’s impact on Seattle housing and lobbied the city to create regulations. Greenwich says one of the reasons Seattle moved from a 90-day limit to its eventual rule that hosts could only list their primary unit and one extra was the difficulty of enforcing the time limit.

There is also a question of whether the 90-day limit is enough disincentive to convert units back from short term to long term.

“For someone new to this, I would guess that 90 days is going to be a pretty steep barrier for making their money back,” says Greenwich. “But, for the people who are already quite experienced with running short-term rental businesses, the limit isn’t going to stop them.”

The coalition that organized October’s march is also skeptical that the 90-day limit will be enough.

“On one hand, I’m glad that the city put out a policy. This is happening so quickly and it needs to be stopped. But at the same time, we need stronger regulations that would actually address the problem in a way that stops speculation,” says Chen.

Community Labor United’s report outlines several regulatory requests. First and foremost is that short-term rental listings be limited to primary residences only. Their other recommendations include a mechanism for holding hosts responsible for the conduct of their guests—nobody likes a rowdy stranger moving in next door, after all—and that the city use funds generated by fees and fines for affordable housing.

The final regulations are sure to look a little different from what Mayor Walsh proposed this week. His ordinance now goes to the city council, who will debate the specifics and take public comment. The council has 60 days to act on a mayoral ordinance. If they don’t, it goes into effect as proposed.

The Massachusetts State Legislature is also taking up the issue of short-term rentals. They are currently debating Governor Charlie Baker’s proposal to impose a hotel tax on short-term rentals.

Josh Cohen is a freelance writer in Seattle. His work has also appeared in The Guardian, The Nation, Pacific Standard and Vice.

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Tags: affordable housingboston