This morning, RentWire‘s daily email post update brought this topic to my attention, with an engaging headline, “Airbnb takes Boston to court over city’s Draconian short term rental rules.” Well, of course I had to click on it. (Insert: Clickbait).
Curiously missing from the RentWire article was any reference to the actual ordinance. Come on people, site your sources. 7th grade English. Understandably, the article took a nice lean towards our plaintiff, with no mention as to the motivation behind the city’s new regulations. Luckily, a quick google search A) Found Boston.gov’s article on the topic, and of course a nice link to the ordinance itself.
Mayor Martin J Walsh of Boston, notes in his letter to his council members that “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. 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. In addition, the use of entire dwellings exclusively for short-term rentals may be in conflict with the dwelling’s existing occupancy, zoning, or property tax classification, and this ordinances creates a system to monitor these potential conflicts and tools to address them when they arise.”
Upon review of the ordinance, I have the following breakdown:
- There is a list of ineligible residential units for short term rentals, including those that are the subject of 3 or more violations in a 6 month period.
- The city requires that any short term rental register, and if approved, is good for one 12-month period.
- There are three different categories that a property may fall under, and each has a different fee associated with registering-
- Short Term Limited Share Units (Operator rents out a room in the residential unit, he/she occupies the home while the short term rental occurs). Fee is $25/year.
- Home Share Unit (Operator rents out whole home while he/she is away). Fee is $100/year. There is a maximum of 90 days the home can be rented in a 365 day period.
- Investor unit (not Operator occupied). Fee is $500/year, and from what I could ascertain, there is still a 90 day maximum. Occupancy shall be limited to 5 bedrooms, or 10 guests, whichever is less.
- Of note is that the registration is not transferrable with the sale of the property. We see this often. It def makes resale difficult if the registration process is limited.
- There is a clause in the ordinance pertaining to data sharing. It requires Booking Agents (Airbnb for example) to generate a monthly report to the city with the number of listings maintained or advertised, along with where the homes are, and the number of nights occupied. I understand Airbnb’s hesitation on this clause, however would note that if the property is registered with the city, as is required, the city already has all the information, and there is no additional privacy concern. Although Airbnb will have to hire more people to generate these reports. 🙂 We had a similar audit done here in the Tahoe Truckee area, with a company called Host Compliance.
- The penalties for non compliance are as follows-
- Offering an ineligible property is $300/day
- Failure to register is $100/day
- Failure to comply with any of the clauses in the ordinance is $100/day. This refers back to the Data Sharing clause, penalizing Booking Agents for non-compliance.
Of note in RentWire’s article is the citation of the Boston Globe’s article on the subject. The Boston Globe states “Under the rules set to take effect in January, Airbnb investors and apartment tenants would be prohibited from renting their homes by the night, and property owners would not be allowed to list more than one unit on the website.” Nowhere in the ordinance did I read either of those two points. Curious to know where the Boston Globe found that.
In the Tahoe Truckee area, where this is a topic heavily discussed, and in fact, we now have two areas, the city of South Lake Tahoe and the Tahoe Donner HOA, that have enacted their own new short term rental ordinances, this is something I think we all need to track closely. Any precedent nationally warrants our attention. See article here on the audit the county recently did to attempt to enforce the Transiency Occupancy Tax requirement enacted in our county.
I will be curious to know how the lawsuit between Airbnb and the city of Boston goes. Citing the constitution is a big claim. According to my Boston friends, the city is stretched to the max, and has the worst traffic they’ve ever seen. With Uber and Airbnb working together to maximize their profits, it’s understandable.
Airbnb suing a city is nothing new, as the Boston Globe notes, “Airbnb previously has sued several cities that have tried to impose new rules on short-term rentals. Last year, the company settled a lawsuit it had filed against San Francisco over steep fines Airbnb would have to pay for unregistered hosts, agreeing to collect host data and turn it over to the city for enforcement. The company’s listings there fell by roughly half when the law took effect earlier this year, according to the San Francisco Chronicle. In August, Airbnb sued New York City over a new law that is similar to Boston’s. That case, along with Airbnb’s request for an injunction, is pending.”