Stonington — More and more homes in Mystic, the borough and other areas of town are being listed on websites, such as VRBO and Airbnb, that offer short-term rentals.

However, the rentals are illegal according to the towns’ zoning regulations, and some residents have begun complaining about neighbors renting their homes and are asking the town to stop the practice.

Masons Island homeowners John and Thalia Pryor sent a letter to the town’s Economic Development Commission in September to make members “aware of serious and growing problem of VRBO and Airbnb short-term rentals gaining in popularity in our communities ... .”

They wrote that they have VRBOs, which stands for vacation rentals by owner, on each side of their home and are “subject to strangers (and strange behavior) every week from May to October," adding that the larger homes turn into "party headquarters for weddings, reunions, graduations and bachelor parties."

They said one neighbor is running a small, busy hotel next door to them with six bedrooms that sleeps 16 for $560 a night.

Airbnb and VBRO allow homeowners to rent out a room or an apartment much as an inn does. While these websites are a new phenomenon, homes and cottages have been rented for decades on a short-term basis during the summer in areas such as Masons Island and Lords Point. This, too, is an illegal practice under the regulations.

The Economic Development Commission has created a detailed 16-page study of the issue, and at 7 p.m. Dec. 20 at Mystic Middle School, the Planning and Zoning Commission is slated to hold a workshop to discuss the study and listen to what residents have to say.

The report states that the Planning and Zoning Commission or short-term rental owners could seek a change in the zoning regulations to address concerns about rentals.

The town also could legalize short-term rentals of primary/vacation homes and seasonal cottages in Lords Point, Latimer Point and Masons Island.

It states this would "present minimal new risks as it would formalize an activity that has been occurring for many years without significant incident."

Economic Development Commission Chairman Dave Hammond said last week that his commission became aware of the issue at a September meeting to discuss the upcoming revision of the town’s zoning regulations. It was at that workshop that Oak Drive resident John Adams, who had received a notice of violation for operating a short-term rental, asked the commission to address it.

The Economic Development Commission then undertook the study, which looks at both the impact and benefits of short-term rentals. The commission stressed that it is not taking a position on the short-term rentals “but deemed the matter worthy of serious consideration.” It added the study is designed to assist residents and town officials in evaluating potential courses of action, which could range from modifying the regulations to permit or regulate the practice, to enforcing the ban.

The Economic Development Commission wrote in its report that “Nationally, Short Term Rental business models such as Airbnb and VRBO are testing the patience of neighbors and the limits of municipal regulations. Cities and towns are being compelled to address the lack of existing regulations.”

In its report, the commission states that, over the past 18 months, the town has issued notices of violation to three homeowners who it has received complaints about. But last week, 160 homes in Stonington were listed for rental on Airbnb alone.

Neighborhood character at risk

Last month, Fred Allard of Bay Street in Mystic filed a complaint over 16 downtown Mystic properties advertised on Airbnb and VRBO. While the town’s and borough's zoning regulations do not ban such rentals, any use not expressly permitted in the regulations is not allowed. The status of those complaints could not be determined from planning officials.

The Economic Development Commission study looked at issues such as code compliance and the number and types of rentals in town. The study states that marketplace demand is encouraging the creation of short-term rentals in downtown Mystic and shoreline areas, where properties are close to each other.

“Increases in residential activity raise legitimate neighbor concerns. Concerns include a risk of loss of neighborhood character resulting from frequent strangers unfamiliar with neighborhood norms, increased traffic, availability of parking spaces and noise,” the report states.

While some rentals can just be a room in a home, which account for 34 percent of the market nationally, the commission's study found that entire homes and apartments make up 80 percent of the market in Stonington.

The commission's analysis of the issue found that the recent issuance of notice of violations “has the potential to pit neighbor against neighbor and will require increased expenditures for enforcement” and that “appropriate rules need to be created.”

The study also found that the short-term rental of existing homes and apartments increases the supply of rooms available to visitors without the need for construction of new hotels. It also gives local businesses a chance to grow revenue from tourism without increasing the existing number of rooms at hotels and bed and breakfast operations, which now stands at 1,323 rooms.

It states that short-term rentals “meet a need that chain hotels, boutique hotels and B&B’s don’t serve well, visits of more than a few days and visits by families.”

As for complaints about renters, the study states that if the rental is a primary residence or vacation home, “there is significant owner skin in the game further” favoring good outcomes.

“In Stonington, careful tenant screening by property owners has likely been the norm because properties are high value and owners know their neighbors and want to remain in good standing with them,” it states.

The study said some owners rent their homes weekly between peak and off-peak seasons and use the revenue to mitigate high ownership costs. This allows them to afford to keep properties in their family.

“... Visitors/tenants benefit from lodging under one roof. Stonington homeowners benefit from new sources of revenue that can be saved or spent. Stonington businesses, restaurants and retailers benefit by an increase in the number of visitors staying local,” the report states.

Low number of complaints

The study points out that other municipalities have managed the risks of short-term rentals by requiring the homeowner to be on premises during the time of rental.

“Pure investment properties (where the owner does not reside for some part of the year) have more risk. In Stonington where the value of real estate is high, the low number of complaints in 2016 and 2015 supports the premise that risks are being mitigated by owners making individual decisions that will not put their property or neighborhood at risk (argument for a soft, if any, regulatory touch),” the study notes.

The commission said a policy of strict enforcement against short-term rentals would have an economic impact in 2017 by eliminating the new supply of properties and change historical rental patterns in Lords Point, Latimer Point and Masons Island.

“For many businesses in Stonington seasonality is a huge issue. If they don’t generate enough revenue/profit in the summer months they can’t make it through the winter,” the study states.

The Economic Development Commission concluded its report by stating, “The concerns and suggestions from those who live near (short-term rentals) need to be heard. The benefits and suggestions from those who operate (short-term rentals) also need to be heard.”

j.wojtas@theday.com