Local officials see state’s Airbnb law leveling playing field

  • From left to right, Conway Town Administrator Tom Hutcheson in November 2017 confers with Selectmen Robert Armstrong, Robert Baker and Chairman John P. O'Rourke. Conway has been ahead of the curve on regulating Airbnb. File photo

Staff Writer
Published: 1/2/2019 5:05:33 PM

The state’s new first-in-the-nation law regulating Airbnb may leave unsettled several questions about the effect it will have on the Web-based accommodations giant here – where even the number of Airbnb sites is an unknown.

But the law may help the area move forward on taxing and requiring Airbnb and similar operations to comply with local health and zoning regulations, says Phoebe Walker, Franklin Regional Council of Governments director of community services.

Gov. Charlie Baker said the law, which takes effect July 1, is an effort toward “leveling the playing field for short-term rental operators who use their properties as de facto hotels,” by applying the state’s 5.7 percent hotel and motel room tax to short-term accommodations rented out for 14 days a year or more.

The law was signed by Baker Friday following a last-minute legislative compromise following his veto of what would have been a more sweeping bill last July to tax and regulate short-term rentals.

Now, cities and towns also have the authority to level additional local taxes, as Conway has already considered doing and will now likely move forward on, according to Town Administrator Thomas Hutcheson.

Hutcheson said he wasn’t certain what steps the town would take to propose a room tax rate in time for adoption by annual town meeting this spring, although he said he might propose an ad hoc committee to consider what would be fair. The number of operations in town, he said, fluctuates depending on the season.

Walker, who has discussed ways that town zoning and health officials might begin to approach enforcement of existing codes and bylaws to comply with a May 2014 memorandum from the Department of Public Health’s Community Sanitation Program, says she expects the new law will go a long way to clear confusion about its authority – and to move ahead, like Conway, on collecting additional room-tax revenue.

“We’ve basically left it to each of our local boards of health to decide on how hard they want to push the issue,” Walker said, and while towns like Leyden and Conway may have reached out to owners they could find, others have made less headway in pursuing the 2014 guidance that they could consider them guest lodging like any other. There will still be some variability from town to town on who runs with the local option (tax) part of this. I think Conway just got ahead of the curve, but that everybody else is going to do this, it’s going to be on every town meeting warrant,” because towns are looking for ways to find revenue other than the property tax.
“But I don’t see how a town could run with the local tax and not do the local license,” added Walker, especially when it’s in the best interest of operators who could be protected from liability issues by getting licensed and insured.

“There are people try to take Airbnb owners for everything they’ve got saying something bad happened to them.”

The COG in 2015 sent letters to owners of Airbnb, HomeAway, Vacation Rentals By Owner, FlipKey and similar online services recommending that they take voluntary steps to see that they meet health, building and zoning codes and obtain necessary permits and licenses.

Still to be ironed out, meanwhile, are issues like how the 14-day rule would be enforced, and whether Airbnb will sue to prevent the law from taking effect in Massachusetts, where state lawmakers have focused on the issue of housing stock that has been diverted for rental purposes.

That remains a concern as well even in Franklin County, where Walker says there appear to be “tons” of the rentals in Shelburne Falls.

“It plays into the whole conversation of how many are entire apartments and studio apartments where a low-income person could live. There are so many places where people could live where people can’t live.”

The other side of that argument is the contribution that short-term rentals can make in helping people – especially older residents on fixed incomes – to continue living in their homes. That concern has been particularly pronounced in Berkshire County, with the combination of an aging, shrinking population and rising property tax rates.

For operations like Two Rivers Bed & Breakfast in Deerfield, unlicensed Airbnb rentals present an uneven playing field, says Dana Lavigne, who set up the three-room, part-time business in her River Road home in 2016.

“What concerns me more than anything is that people are taking people into their homes and the town doesn’t know about it. It goes against the bylaws of the town.”

Massachusetts Lodging Association President Paul Sacco welcomed the new law, blaming Airbnb in part for driving up rents and disrupting neighborhoods. The association represents hotels and motels.

Incoming Franklin County Chamber of Commerce Executive Director Diana Szynal said that she doesn’t have a sense yet of the vitality of the Airbnb market in Franklin County, but that the bed and breakfasts appear to be a “crucial piece” of the county’s tourism industry. In her former role, as a legislative aide to the late Rep. Peter Kocot, D-Northampton, Szynal noted that there were no concerns raised about the Airbnb legislation that was under consideration on Beacon Hill.

Airbnb urged Baker on Thursday to veto the new compromise legislation and allow the next Legislature to debate the issues at stake all over again.

“This bill raises serious concerns for the thousands of Bay Staters who share their home to make a little extra income. In addition to undermining the governor’s effort to shield hosts’ personal information, the bill would impose significant burdens on individual hosts, many of whom rent their homes for just a few weeks a year,” company spokeswoman Liz DeBold said.

Baker’s office estimated that the 14-day exemption would impact one-sixth of operators, and reduce tax revenues by 1 percent, or $300,000. Legislators had previously estimated that the bill would generate $25 million in state taxes and another $25 million in local taxes.

(The Associated Press and State House News Service contributed to this report.)

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