Short-term rental battle riles Nantucket
Wealthy island debates regulations
THE REAL ESTATE listing for the four-bedroom home on Nantucket portrays an idyllic setting for a summer vacation, a mile from the beach. There’s a deck overlooking a large yard; a light-filled, newly renovated, living area; and a second floor comprised solely of the master suite and balcony. The price tag: $11,000 a week in August. Most of the summer is already sold out.
Rentals at those eye-popping prices hardly seem like they would draw riffraff to the exclusive island retreat. But that is exactly what some Nantucket residents say is happening. They say short-term rental websites like Airbnb have opened the island to a deluge of visitors who are turning it into a party haven, upending the time-honored, more restrained ways of summering in a place where the high season does double duty as a verb.
An effort is now underway to dramatically restrict short-term rentals on the island. Proponents have seized on the argument that short-term rentals are limiting the availability of much-needed housing for lower and middle-wage workers. But opponents say professions of concern over workforce housing are being used to mask a battle between uber-rich homeowners who don’t need to rent their homes and those who rely on income from summer rentals to afford a second home on an island where the median assessed value of homes used for rentals is $1.6 million. Business owners, meanwhile, worry that significant restrictions on short-term rentals will decimate the island’s tourism-based economy. The pitched battle is pitting year-round residents against seasonal residents against off-island investors, and millionaires against billionaires.
In 2018, Gov. Charlie Baker signed a law regulating the burgeoning short-term rental business. The bill taxes and regulates short-term home rentals, like those marketed through Airbnb and VRBO, and lets municipalities impose their own rules. Fights over how to regulate rentals have been playing out in cities and towns statewide. Officials in Boston, for example, decided to only allow rentals in owner-occupied buildings, an attempt to crack down on apartment buildings being turned into de facto hotels.
Nantucket’s debate, however, is unique. An island with just one town, Nantucket decided decades ago not to allow hotels except in a very limited downtown district in order to maintain the island feel. So the way visitors have enjoyed the island has been through short-term home rentals.
“We’ve counted on the practice for tourism for years,” said Nantucket Planning Board vice chair David Iverson.
The difference now is websites like Airbnb have made renting easier and more ubiquitous, and societal changes have affected the way people vacation. Rather than hosting regular renters who have visited the island for years and connected with owners via rental agents or word of mouth, Nantucket is now seeing an influx of web-surfing visitors – at least those with the means to afford its sky-high prices.
Tobias Glidden, executive chairman of ACK Now, the main organization pushing for stricter regulation, said in the past, a family would visit the island for a month. Now, properties are often rented out to a different family each week. “You’re having a new family every single weekend coming to the island, partying, a very high intensity of use,” Glidden said. “That’s really taxing on the island’s resources.”
“We’re turning into Disneyland,” Glidden said. “It’s not good for the community, the people who live here year-round, or the summer tourists who live here, if the island is overrun and crowded.”
Despite the defeat, that debate led town officials to discuss whether some regulation is needed. At this year’s approaching May 2 town meeting, three warrant articles are up for debate.
One fairly uncontroversial article has widespread support, including from town officials. It would require all short-term rentals to register with the board of health. It would create a straightforward regulatory framework to make sure rentals adhere to basic safety and community standards – like meeting fire codes, maintaining insurance, and having a property manager. The board of health could write rules to address nuisance issues like noise.
The real showdown involves the two other proposals, one zoning ordinance that would largely sanction short-term rentals across the island, and the other that would dramatically limit them. Both require a two-thirds vote to pass.
Article 42, supported by the Planning Board, would allow short-term rentals by right in all residential districts, unless the Planning Board prohibits it as a condition of a new workforce housing project.
Article 43, backed by ACK Now, would let year-round Nantucket residents rent out their houses by right. Residents for whom Nantucket is not their primary residence could only host short-term rentals with a special permit and if it is an “accessory” to their home, like a cottage on their property. Non-island residents could not operate short-term rentals, essentially closing off the island to what ACK Now refers to as “corporate investors.” Even residents could no longer rent out investment properties unconnected to their homes.
The debate is colored by litigation. A 2021 Supreme Judicial Court ruling found that a short-term rental operating before the town of Lynnfield prohibited short-term rentals cannot be grandfathered in on the argument that it was a permissible use in a residential district without a specific bylaw. Nantucket legal experts differ on whether the ruling threatens the right of Nantucket homeowners to rent out their homes in a residential district without a zoning bylaw allowing it.
Additionally, Nina Pickering-Cook, an attorney who represents ACK Now, has filed two lawsuits on behalf of abutters to Nantucket short-term rentals. The first was dismissed when the owner sold the property, and the second, against property owners Linda and Peter Grape, is pending in Land Court. The lawsuit challenges the Nantucket Building Commissioner’s determination that short-term rentals are allowed by right in the residential zoning district. Pickering-Cook argues that they should be considered a commercial use.
The Nantucket Planning Board cited the legal uncertainty in explaining in a statement on the town warrant why the article explicitly authorizing short-term rentals is necessary. “Providing some certainty to the approximately 1,800 property owners with a registered short-term rental through the State is prudent to avoid additional litigation between individual homeowners, as well as the Town,” the board wrote.
But Pickering-Cook and others argue that it would be a dramatic legal change to pass a zoning ordinance allowing unlimited short-term rentals by right. “It’s an opening of the floodgates with no way to close them,” she said.
Pickering-Cook said her client, Catherine Ward, did not authorize her to speak about the ongoing case against the Grapes.
Linda and Peter Grape, in a statement, said they have been visiting Nantucket for 40 years and have owned – and sometimes rented – a home for five years. “This group is trying to create two classes of homeowners and make the Island an exclusive enclave where only the super-wealthy can enjoy a good quality of life,” the Grapes said. The couple said the passage of the ACK Now-backed restrictions “would be disastrous for everyone – except for those billionaires who are pushing this idea.”
The major reason ACK Now cites for pursuing stricter regulation is that Nantucket has an affordable housing crisis, which makes it hard for workers to live on the island, and which is exacerbated by the growing number of units being converted to short-term rentals. “We’re seeing it across the state, where there’s less and less inventory…and investors are buying up residential homes and displacing the working class,” Glidden said.
Glidden also cited concerns about excessive partying and noise. He said he personally lived next to a short-term rental where two people overdosed and there was loud music each Sunday morning. He said limiting rentals is about keeping wealth on the island, and also “maintaining the integrity of zoning, to protect the homes to be used as homes and not as businesses.”
But Ryan Castle, CEO of the Cape and Island Association of Realtors, said concerns about noise and other problems can be addressed by holding individuals accountable through basic regulations. “To vastly shrink and at times blankly get rid of short-term rentals would hurt the economy, hurt jobs, make it tougher for those who want to make a living and are trying to make a living year-round to do that,” Castle said. He said the additional restrictions are “really put up by those who are privileged enough to not have to worry about trying to make a living.”
Opponents say the ACK Now article would pose a serious threat to the island’s economy.
“A very large group of people come to Nantucket for one to two weeks in the summer, who rent,” said Arthur Reade, a Nantucket resident and an attorney to the Copley Group, which rents out luxury properties on Nantucket. “It’s been that way going back over 100 years. If you reduce the amount of short-term rentals, you’re reducing the amount of people who can come to the island and shop, supporting local merchants, restaurants, charter fishing boat captains, you name it.”
A 2021 study by the UMass Donahue Institute found that the island has just over 2,000 short-term rentals. The study obtained data from 1,700 of them and found that 82 percent were owned by off-island residents. Of those, 58 entities own multiple short-term rentals, totaling 157 properties. Close to 90 percent of lodging rooms in Nantucket are short-term rentals, so cutting their availability, particularly in the summer when occupancy rates are 80 to 90 percent, would significantly constrain tourism.
“We have an economy based on tourism, and we haven’t built the hotel capacity to support the tourism,” Castle said.
Rebecca Chapa bought a three-story home on Nantucket in 2011. During the summer, she and her husband move into a basement apartment and rent out the top two floors for $600 a night on Airbnb – income that goes toward their mortgage. Chapa said she is frustrated by the constant debate over what will be allowed. “It’s been so stressful for people that are in the situation we’re in to have to fight the fight every single year,” she said. “I think any restrictions on a homeowner’s ability on how they can use their home really are just a slippery slope.”
Nantucket is a highly unusual community because of its high prices, and because about two-thirds of homes are only used seasonally. No one questions the need for more worker housing. But opponents of the ACK Now regulation say rather than opening up workforce housing, limiting short-term rentals would result in properties being snapped up by wealthy individuals who can afford to buy a second home without renting it out.
Sanford, the select board candidate who works in real estate, said his family has owned a modest waterfront cottage on the Nantucket wharf for 65 years. It is uninsulated and 400 square feet, but surrounded by billionaires’ homes. If he is prohibited from renting it out, Sanford said he will sell the cottage. Because it is not a suitable year-round house, he suspects the buyer would be a developer who could knock it down and build a multi-million-dollar mansion on the lot. Sanford noted that the five-bedroom house that was the subject of Pickering-Cook’s initial lawsuit sold for $3.2 million.
The proposed restrictions are designed by people who “have no experience in the market,” Sanford said.
Kathy Baird, a part-time resident and cofounder of Nantucket Together, a consortium of island residents, rents her Nantucket house to help cover the cost of owning a second home. Baird said she hasn’t seen any proof of a problem that needs to be addressed. A town study of noise complaints from May 1 to October 1, 2020, found that of 557 complaints, just 66 related to short-term rentals.
“We’re looking to find some common ground, some movement forward, stopping all of the attacking and negativity and the relentless lawsuits that keep coming from the authors of [Article] 43 against the town and taxpayers who run short-term rentals. There’s got to be an answer,” Baird said.
Several town residents said they would like more study before either zoning regulation passes.
Former select board member Rick Atherton, a year-round resident, said there is a new phenomenon of corporate investors buying homes to convert into multiple short-term rental units. Atherton worries that allowing rentals everywhere by right is “a broad-based absolute” and “an invitation to closing down any discussion on the issue.” If it passes, he said any subsequent attempt to restrict short-term rentals would invite more litigation. But he thinks the ACK Now-backed restrictions are a political non-starter.
Atherton would like to see more study of other communities’ policies, along with efforts to identify residents’ concerns and seek public comment. “There are many other points of view, and our current planning and select board have done virtually nothing to explore that and inform the public,” Atherton said.
Select board member Matt Fee similarly worries that the industry is changing, with more homes owned by corporations and being rented for shorter stays. When Fee was a child, he said downtown Nantucket was where the affluent bought homes, and workers could live elsewhere. Now, the pockets where workers live are being encroached on by short-term rentals. “The question becomes, when you buy up all the homes for summer visitors, short-term rentals, and there’s no homes left for employees and people who work, how sustainable of an economy do we have? How sustainable of an island do we have?” Fee said.Rather than “opening the floodgates” by allowing all short-term rentals, Fee said he wants to keep negotiating a potential compromise. “People on both sides of the debate recognize the difficulties we’re facing, and I think they also recognize that we haven’t necessarily gathered all the facts that are needed to make the right decision,” he said.