walkitout (walkitout) wrote,

Regulating short term rentals

Santa Monica has convicted someone under their new comprehensive ban on whole-home rentals of less than 30 days. They did it the easy way: they booked a place and then used the rental agreement as the basis for charging the owner.

I've been hearing _a lot_ about this kind of regulation being contemplated, along with a host of less onerous regulations. I, personally, think Santa Monica is on every level an over-rated, snobby large town/small city and I thought that long before I'd heard about this story. Sure, it's pretty and, obvs, the weather is nice, but I don't think you need to worry about Santa Monica style regulations showing up elsewhere. That would be like worrying that Kirkland-style opposition to stop lights to keep pedestrians from being killed on busy streets in their "small town" (of 84K) has any chance of spreading to places where actual decent human beings live. You have to be a particular kind of very wealthy and very spendy crazy to live in a place like Kirkland or Santa Monica.

How about a somewhat more normal town, like Falmouth, MA on Cape Cod?

Falmouth contemplates making short-term rentals pay hotel tax.


I think this is a good idea.

There are some funny quotes in the article tho!

"Amy Iris of Maine said, “If you could go up to Maine instead and do the same sort of thing without a tax, you probably would go there.”"

Sweetie, if we wanted to go to Maine, we'd go to Maine. They are Not Comparable. As anyone who has stood on the beach in the summer in Maine and stood on the beach in the summer on the Cape can tell you. And as the persistent real estate price differential makes utterly clear.

"Chris O’Brien of Los Angeles explained, “Any cost increase is something I would factor into my vacation costs.”"

When I lived in Seattle, I told people I didn't like that it rained there all the fucking time. We should tell visitors to Massachusetts from places like LA that we are Taxachusetts. First, it's _sort_ of true, and the entire state of New Hampshire will happily confirm that if asked, thus making it a credible claim. Second, we have enough Massholes already. We don't need to import more. Stay home, Angels. You won't like it here. We're terrible drivers. And we dress even worse. Your eyes will hurt. Your blood pressure will soar. Maybe try Maine? (When I lived in Seattle, I told people I _liked_ that the whole thing about the rain was completely untrue. But I also warned them about depression and increased suicide risk. I mean, I _liked_ them. I felt they should be able to make an informed decision.)

I like the idea of Falmouth charging hotel tax on short-term rentals. My walking partner and I agree that this would be a basically fair thing to do across the board. We're still debating issues like, to what degree should building code applied to hotels and inns be applied to short-term rentals. That's a lot more complicated. The idea that a hotel tax would drive away a significant number of renters ignores the fact that hotels in the area tend to be completely full every summer weekend. And _they_ charge the tax. How bad can this be, really? I mean, everyone said that Amazon's business would fall off if they had to charge state sales tax, and while I think it's not yet completely universal, there hasn't been an obvious return to buying in person in those jurisdictions where Amazon now charges sales tax (since I've typically lived in places where Amazon charges sales tax, I've always wondered what the fuss was about. Anyone who comparison shops can usually save the amount of sales tax just by knowing where/when to buy something anyway, switching brands, buying gently used, etc.).

This year, the state took up the idea of taxing short term rentals as hotels.


This addresses the, wah, everyone will rent in Yarmouth instead aspect of Falmouth taking this on. (Maine, you can still hope. I mean, look at your governor. A lot of Mainers must be absolutely nuts to have a governor like him.)

They are punting, however, on the safety regulations, arguing that is best handled at the community level. And honestly, I'm inclined to agree. We've been going to the Cape for ... okay, don't make me think that far back. For a while now. We usually rent a house and then other people join us and they stay in various other places, but one time we stayed in a rented RV and camping cabins. The Cape has a lot of options for where to stay and how many people to wedge into the space in question. If you required a rental home to match hotel regulations, that would actually be a step in the wrong direction for a lot of home/hotel comparators. And once you factor in the camping cabins, I just don't even see what the point is. The basics -- heating, clean water, functioning toilet, are covered by occupancy rules on private homes already, and reviews online -- which are readily available for cape rentals -- provide a pretty good carrot and stick system for the nice-to-haves.

Airbnb and others support the statewide legislation, because it would simplify their/their hosts' compliance problems.

"“This bill would simplify the complicated tax structure that our hosts face and help ensure the state and the localities receive their fair share of tax revenue,” the letter added. “The Commonwealth has the opportunity to generate millions of dollars in new tax revenue from these transient accommodations.”"

Bay Area communities have been claiming that short-term rentals (and property purchased for that purpose) have further driven up the price of housing. I don't know whether this is true in the Bay Area (there are so, so, so many things contributing to housing price swings in the Bay Area that I long ago lost any real interest in either (a) living there or (b) trying to even figure out what is going on -- but I'll tell you straight up: if the suburbs would quit trying to force the whole region to stay SFH, pricing might eventually stabilize. Really, the only reason any of us should care about real estate in Cali is people sell in Cali near the top and then export their housing inflation to the rest of the country, driving prices up everywhere else. It causes conflict and is annoying, but you know, we're called the United States for a reason), but I honestly have some trouble seeing this mid-cape.

"Boston City Councilor Sal LaMattina said he supported Michlewitz’s bill.

“My main concern is you have some big investors buying up buildings and using them for Airbnbs. They’re taking away from the housing stock in the neighborhood,” he said. “For me it’s never been about taxes, it’s about public safety and keeping affordable housing.”"

My best guess is that LaMattina has a voter base that is increasingly moving out of Boston-Somerville-Cambridge (well, his voter base would be in the B part of BSC) because they cannot afford to live in the city any more. This is what happens when "inner city" quits being a derogatory term and starts to acquire cachet in realtor speak. I have a hard time believing that short-term rentals are a significant component of the price rises in BSC. I could go on, but why? If you have an interesting counter-argument, please share in the comments!

Another argument, this time in favor of code: "Paul Sacco, president and chief executive of the Massachusetts Lodging Association, also supported more regulations, saying that, without them, short-term rentals would continue to have an advantage over hotels." Awww, Sacco. The _real_ reason short-term rentals have an advantage over hotels is because they often have kitchens. If the hotel industry would just build more hotels with kitchens -- I know you are working on it, but honestly, the extended stay options are still kinda crummy, and I include Homewood Suites in that statement and AFAIK they are the best of the lot, unless you count the possibility of renting into a timeshare system like DVC; if I could consistently rent units like DVC units as part of a larger hotel with a pool and breakfast downstairs, I would honest to goddess never take all the risks inherent in renting a house again. But, you know, _I can't_.

Sacco is afraid short term rentals will put B and Bs out of business. I feel like there is some irony there. In any event, I'm not that concerned about it. If the pressure gets to be too much, the B and Bs can do what the used book stores all did: close up shop and re-open online. They, too, could save on all the regulatory costs, just like used book stores could operate out of their garage or warehouse space, rather than expensive storefronts. (ETA: If it isn't obvious. Let's say a large house with 5 bedrooms with ensuite bathrooms is currently a bed and breakfast with lodging regulations and taxation. They look around and go, hmmm. They close the Bed and Breakfast, and re-open on Homeaway group and similar, renting the whole house out with some number of nights minimum stay. Think I'm making this up? I'm not. Their regulatory costs just went away, and if they play their cards right, so did their cleaning costs -- and their income may have gone way up as well.)
Tags: our future economy today
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