City councilors raise concerns about Walsh’s Airbnb regs
Wu says proposal contains ‘loopholes’ that need to be closed
SOME BOSTON CITY COUNCILORS said Mayor Marty Walsh’s proposed ordinance to rein in the burgeoning short-term rental industry is a good start but still lets investors buy up too much affordable housing stock and displace thousands of families in a tight market.
City Councilor Michelle Wu on Monday called the Walsh proposal to regulate the so-called home-sharing industry a starting point but said she will seek to eliminate the investor-level tier. “There are a number of corporate loopholes [in the proposal] that have to be closed,” she said. “I am not persuaded we should be allowing an investor unit classification at all.”
Walsh’s proposed regulations target three tiers of landlords: those who rent out rooms in their own homes, those who rent out their entire home, and investors who rent out units they own but don’t live in. Under the proposal, those who rent out rooms in their homes could do so as often as they want, while those who rent out their entire homes or investors who rent out units they own (but don’t live in) would be limited to 90 days per year.
Owners at all three tier levels would have to register with the city. Those who rent out rooms in their homes would pay $25 to register. People who rent out their primary residence (a whole house, apartment, or condo), such as when they go on vacation or other trips, would pay $100 but would have to be present when the unit is booked. The third tier, classified as an “investor unit,” would pay $500 per unit.
“We know that the unchecked commercialization of short-term rental uses in residential properties has potential to increase pressure on our already strained housing market,” Walsh wrote. “Losing long-term housing units to a commercialized short-term rental market effectively negates the work we have done over the years to rapidly expand Boston’s housing stock.”
Chris English, Walsh’s director of policy who played a leading role in crafting the ordinance, said the limit on rental days combined with mandates to reclassify some buildings that are used entirely as rentals for platforms such as Airbnb would “disincentivize” investors from putting units on the short-term market.
“We think through the 90-night limitation is enough to disincentivize more commercial use” said English. “If applicants wanted to exceed that 90-night limit or if they’re operating as de facto hotels, the [city’s assessor] would have to reclassify it as other than residential, which would be a higher tax rate.”
Wu said the 90-day cap may not be enough, pointing out 90 nights is roughly equal to 45 weekends out of the year. Just renting the unit out on Friday and Saturday nights could be lucrative enough to keep the unit out of the housing stock, she said.
“I think 45 weekends out of the 52 might still make that financially feasible to push families out of housing,” said Wu. “For me this is an issue very much about housing prices. We cannot afford to be displacing families and disrupting communities.”
First-term Councilor Lydia Edwards, who represents the North End, which has been particularly hard hit by the booming trend, said the proposal is a first step in addressing the affordable housing problems created by short-term rentals.
“The devastating impact of short-term rentals can be seen city-wide and is exasperated by absentee landlords and multi-unit owners,” Edwards said in a statement. “I hope we get a balanced approach that returns the short-term rental market back to its original intent of providing supplemental income to residents living at the property and provides a way to hold hosts accountable to their neighbors.”
CommonWealth earlier this month published a story detailing the impact of Airbnb on the city’s housing stock and showing how the app is changing neighborhoods. The magazine followed the story up with an event focused on how disruptive technologies should be regulated.
The mayor’s proposal would allow the city to adopt a local option tax if and when the state passes a law dealing with short-term rentals. Rep. Aaron Michlewitz, who has a bill in the Legislature to set up a regulatory framework for cities and towns to adopt and would extend the state’s lodging tax to house-sharing, said his initial response to the mayor’s proposal was positive.
“The mayor and his team have struck a good balance between allowing the short-term rental market to continue to provide alternative means of occupancy, while putting any further growth in the hands of the local community process by forcing anything over 90 days to have to change usage from residential to commercial,” Michlewitz said in an email. “This will give each neighborhood in Boston an ability to have a say in how this market moves forward.”
Richard Giordano, director of policy and community planning for Fenway Community Development Corporation, said he is encouraged by the mayor’s proposal but said it doesn’t go far enough in limiting the number of short-stay units anyone can own. Like Wu, he said he can foresee landlords in neighborhoods with college students renting out units to students during the nine-month school year and using the 90-day cap to advertise on Airbnb for the summer months.
Still, he said, the Walsh estimate of returning about 2,000 units to the housing market through the proposal was welcome.
“It would seem to that this is an initial solid attempt to deal with the problem,” he said. “If we do nothing other than what has been suggested, I think we can still get a couple thousand units back into the long-term market.”
The proposal also calls for owners and booking agents to share data with the city on who is renting out their units and how often. Councilor Annissa Essaibi George said gathering data is a key issue.
“We’re trying to understand what the market looks like,” she said. “When you live in the North End and people stop to look in your window or your balcony, there’s a strong desire to be aware of who’s next door to you.”
But Walsh and others acknowledge one of the biggest problems with regulating the burgeoning industry is also the reason they are being regulated – they are wildly popular.
“In 2017, over 3,000 Boston families used Airbnb to help pay their mortgage, rent, and bring tourism dollars to neighborhood businesses,” Crystal Davis, a spokeswoman for Airbnb, said in a statement. “Over 80 percent of these residents are sharing their primary home. We are pleased that the city of Boston is making progress on regulations for our home sharing community, and will continue our review of the full proposal.”English, Walsh’s director of public policy, said the regulations try to ensure that units meet health and safety codes while still allowing the platforms to grow, which contributes to the city’s economy because travelers prefer the lower cost of a short-term rental rather than the price of a hotel room.
“[The success] is definitely an indication that people want to come to the city, visit the city, and they find value in the short term option,” said English. “It’s an indication that people want to come here and spend their money here. That’s certainly something that we’re supportive of.”