Walsh Withdraws His Ordinance Regulating Short-Term Rentals

Mayor Martin Walsh withdrew his ordinance regulating short-term rentals in the City of Boston arguing that more time is needed to ensure that the City enacts the best and most effective policies.

The announcement came at the Boston City Council’s hearing on Wednesday, March 21 when a letter from the Mayor’s Office was read into the public meeting.

It stated that during a robust process including a public hearing and two working sessions, important and complex questions were raised. He asked that more time is given to ensure that the most effective policy regulations regarding short-term rentals in Boston are enacted.

“My administration and the Boston City Council have a shared commitment to ensure expeditious passage of a comprehensive legislation that prevents displacement and protects the quality of life in our neighborhoods,” the Mayor’s letter stated.

The Mayor will refile a proposal in the coming weeks and looks forward to working collaboratively with the Boston City Council to produce the most effective policy.

The ordinance was filed with the City’s Clerk’s Office on January 19, 2018, which started a 60-day timeline for the Boston City Council to take action or let the legislation become law.

“After many productive conversations, it’s clear that the City Council, the Administration, residents and advocates share the same goal for creating short-term rental policy: stabilizing our neighborhoods by closing loopholes for de facto hotels while preserving the benefits of home-sharing for residents,” said At-Large City Councilor Michelle Wu. “As we hone in on finalizing the details, I’m looking forward to making a collaborative, quick push to get this done.”

Walsh’s plan called for a three-tiered approach in rental units including, differentiating between a space in a primary residence rented while the operator is present, a ‘home share” in which it is the primary residence is rented and an “investor unit” that is non-owner and non-tenant occupied.

There would be no limit on the number of booked nights for the “limited share units” in a primary residence with the operator present, while home shares and investor units would be capped at 90 days per year. Owners would have to register their rentals with the city and pay an annual license fee.

“We are tentatively pleased about the Mayor’s decision to pull it,” said Steve Fox, vice-chair of Alliance of Downtown Civic Organizations (ADCO). “Now the question is, what do we do about the investor units?”

The organizations research has shown that the investor short term units are causing inflation, driving rental rates up in the area and decreasing the vacancy rate. Fox hopes to share some of ADCO’s innovative solutions to these problems in the upcoming weeks.

“We are really pleased to have another opportunity to draft a regulating formula that is similar to other cities that have been at this for a long time such as San Fransisco, Los Angeles and London. Really, the investor units are the key solution to solving this problem,” said Fox. “The fact that the Mayor withdrew his application shows he is listening, but obviously the old structure with no regulation is not going to work.”

Fox said ADCO will also continue monitoring the situation at the State House, which is currently taking up similar legislation for the State. The House on Thursday plans to vote on a bill (H 4314) that outlines tax regulations, insurance coverage and requires registration and data reporting.

Under the state measure, rental hosts would be classified by three tiers, including residential, which is less than three units, investor hosts, who offer three to five units, and professionally managed hosts who operate six or more units.

The proposal will still allow cities and towns across the state to further regulate short-term rentals.

Airbnb responded to the Mayor’s decision to withdraw his application saying, “Home sharing is an economic lifeline for so many Boston families, and we look forward to working with the Mayor and the Council on a solution that protects economic opportunity and quality of life.”

The Massachusetts Lodging Association (MLA) said that this debate has been litigated for at least three years in the City of Boston and they are ready to see action.

“The Mayor has acknowledged that the city has a responsibility to rein in Airbnb investors who are converting scarce housing into illegal hotels,” said Paul Sacco, president and CEO of MLA. “If there must be a further delay, it should be to strengthen the proposal to prohibit investor units, which are nothing more than unregulated and untaxed hotels operating in residential neighborhoods where they are unwelcome. Surely, if other large cities like New York, Chicago and San Francisco have figured this out, Boston can, too.”

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