Local officials consider options to regulate Airbnbs

  • This entire house at 48 Congress St. in Greenfield is listed as a short-term rental on Airbnb.com STAFF PHOTO/PAUL FRANZ

  • The first-floor apartment at 65-67 Madison Circle in Greenfield is listed as a short-term rental on Airbnb.com STAFF PHOTO/PAUL FRANZ

Staff Writer
Published: 3/13/2019 11:06:04 PM

Town and city officials throughout Franklin County are considering their options now that the state has begun to regulate short-term rental properties like internet-enabled Airbnb.

With many Airbnbs popping up around the county to accommodate transient guests, town officials said at a recent Franklin Regional Council of Governments meeting they realize some decisions need to be made, including whether to impose a room occupancy tax and community impact fees on the establishments, as well as whether to create zoning laws to regulate them at the local level.

A visit to www.airbnb.com reveals that people throughout the county are renting entire houses, apartments, rooms, yurts, and even a garden shed in a back yard and a “library room” in an “urban cottage” in Montague.

The FRCOG met with more than two dozen stakeholders recently, including planning board and selectboard members from different towns. Several municipal health and building inspectors attended, saying they are concerned for the safety and welfare of guests.

The state’s definition of short-term rentals is an “owner-occupied, tenant-occupied or non-owner occupied property including, but not limited to, an apartment, house, cottage, condominium or a furnished accommodation that is not a hotel, motel, lodging house or bed and breakfast establishment, where: (1) at least one room or unit is rented to an occupant or sub-occupant; and (2) all accommodations are reserved in advance.”

The operator of a short-term rental can be the owner, lessee, sublessee or holder of the mortgage on the property, but that person does not have to be a resident of Massachusetts.

According to the new rules, guests must pay a room occupancy tax, and if towns and cities want to collect a portion of that, they must adopt that tax at the local level at town meeting. Renters pay the taxes and fees in the price of their rentals.

The state Department of Revenue will require all short-term rental properties to register with the state as of July 1. Once it has a better picture, the state will file a report on the short-term rental economy.

Insurance

The state is also requiring that homeowners carry insurance on their short-term rental properties.

Tim Farrell, co-owner of Gilmore and Farrell Insurance on Bernardston Road in Greenfield, said homeowners who decide to run an Airbnb should check with their insurance company about coverage. He said all of the companies his firm works with do not cover Airbnbs under a standard homeowners policy.

“The companies are all addressing this,” Farrell said. “If something happens, there’s no coverage or protection for the homeowner.”

Farrell said he believes people who run Airbnbs will have to acquire a commercial policy, just like bed and breakfasts have had to do for years. He said just like any other business, it won’t be that costly if rooms are being rented a good portion of the year, but if a homeowner is only renting to someone on occasion, it could become cost prohibitive.

Taxes and fees

Phoebe Walker, director of community services at FRCOG, said if a town adopts the room occupancy tax, the state will collect it in full each quarter and then return whatever percentage was voted by the town. Seven towns and Greenfield, the only city in the county, have already voted a room occupancy tax of 6 percent, with the exception of Charlemont, which voted a 4 percent tax. The remaining 18 towns could vote a room occupancy tax at their town meetings this year or next, Walker said.

Towns and cities will also have the option of collecting a community impact fee, but only if it has adopted the room occupancy tax first, she said. The community impact fee is paid to the state monthly by the operator of the Airbnb, and 35 percent of what the town receives must be dedicated to “affordable housing or local infrastructure projects,” while the remainder can be used by the town as it sees fit.

“One of the ills of short-term rentals is that it affects the number of affordable units available to renters,” Walker said. “People are renting out rooms or apartments short term when it is more lucrative than renting on a monthly basis.”

Bylaws and ordinances

If cities and towns want to regulate short-term rentals by creating their own bylaws or ordinances, it will require a two-thirds vote of town meeting, or in Greenfield’s case, a two-thirds vote of the City Council, Walker said.

Walker said one town in Massachusetts didn’t know about a particular short-term rental property until there was a tragedy there — someone was killed during a party being thrown by the renter. She said another town found out when renters were throwing large, noisy parties and neighbors complained.

“The good news is, communities get to decide how to regulate them, once they know about them,” Walker said. “And, towns always have the option to go to court, if there are problems that aren’t being resolved.

“It’s going to be a challenge, for sure,” she said.

Communities can establish bylaws to regulate things like licensing, parking, penalties for violations and within which zones Airbnbs can operate, Walker said. Each city or town will be responsible for enforcement of any new law it passes.

Each can decide to set the total number of permits issued, how many days per year an Airbnb can be rented, and whether municipal inspectors can do inspections to make sure operators show no outstanding building, electrical, plumbing, mechanical, fire, health housing or zoning code enforcement orders on their properties, Walker said.

On airbnb.com, very few places provide an exact address, and owners’ first names are typically used. There seems to be no way to contact owners, except through the site. Owners provide several photos of the property, and they list the town in which the Airbnb is located.

Some town officials voiced their concern that it may not be easy to find Airbnbs within their towns, especially if owners decide not to register with the state.




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