Regulate the short-term rental industry
There is no question that the short-term rental industry needs to be regulated. And that is what it has become, an industry, one with significant impact in many of our communities, particularly in high tourism sections.
Web-based companies such as Vrbo, Airbnb, HomeAway and others have caused a dramatic rise in short-term rentals, primarily by vacationers who may have once used a traditional hotel setting. How wide are their use in southeastern Connecticut is unknown, but it is extensive.
This industry has its benefits and its negative features.
Tourism is a major component of our local economy and short-term rentals boost the options tourists have in visiting, boosting the numbers. Yet in our region’s highest tourism centers, such as Mystic and surrounding communities, short-term rental growth can disrupt neighborhood unity with visitors coming and going who have no investment in the area, unaware or uncaring about noise and parking rules. Party houses are a particular annoyance.
Revenue from short-term rentals can provide the means for some homeowners to own properties they could not otherwise afford. Yet this trend also drives up rents and house prices, exacerbating the crisis of housing unaffordability.
It makes no sense to turn a blind eye to the existence of short-term rentals and their substantial impacts. It is unfair to allow this industry to continue without regulation when the traditional lodging industry that competes with it is subject to substantial regulation and taxation.
Communities such as Stonington and Groton, which are studying possible regulations, are taking the right approach in acting in a deliberate fashion and by seeking wide input. Before acting, elected leaders need to hear from the public, homeowners, short-term rental providers, lodging industry officials, community groups, affordable housing advocates, and the tourism community.
But they cannot act too slowly because, as the National League of Cities noted in its recent report on the issue, “it is much easier to limit the spread of short-term rentals before they have proliferated than it is to retroactively remove them from the market.”
In developing its report, “Short-Term Rental Regulations: A Guide for Local Governments,” the National League of Cities evaluated short-term regulations put in place in 60 municipalities across the country. While the organization stresses the need to mold the rules to the circumstances in individual communities, it also outlines some best practices.
In many of our local communities, for example, those special circumstances include the long tradition of owners renting out their seasonal cottages near the beach.
As for those best practices, a host residency requirement tops the list. This would end the use of properties solely for short-term rentals, or for properties being purchased with that intent. The NLC found these properties are the subject of the bulk of complaints about short-term rentals. They are essentially inns and should be regulated as such in accordance with zoning rules.
The report also emphasizes the need to adopt permit requirements for those who want to operate short-term rentals. The number of permits can then be limited, or prohibited in some sections, allowing some local management of the short-term rental industry. Permits can also be used to establish quotas, perhaps by tying the allowed number of guests to available bedrooms, avoiding the nuisance of overcrowding.
Permit fees can generate the revenue necessary for enforcement, which is critical if a city wants its rules to be taken seriously. Enforcement will require the hiring of personnel or using third-party contractors to monitor compliance and investigate complaints that rules are being ignored or that units are being rented without the required permits.
To be effective, enforcement must include fines and the authority to revoke a permit for repeated rule violations. State legislation may be necessary to assure municipalities have the authority to invoke the regulations and penalties they see as necessary to support the positive aspects of short-term rentals while limiting their negative effects.
Many enjoy the opportunities short-term rentals provide, including experiencing a community at the neighborhood level. They generate economic opportunities and benefits. They are here to stay. But sensible, carefully thought-out regulations are necessary to balance the positive and negative impacts of this 21st century phenomenon.