Michlewitz bill would regulate short-term rentals

By Sam Tarr

Originally Published April 18 2018: JSONS

The Alliance of Downtown Civic Organizations(ADCO), a Boston nonprofit group, released a 12 page report in response to Mayor Marty Walsh’s January proposals to begin regulating the city’s short-term rental market. The ADCO report salutes Walsh’s proposals but criticizes what they say is a major blind spot.

As cities and states throughout the country begin to tax and regulate short-term rental properties, like those made popular on platforms like Airbnb, civic organizations like the ADCO are pushing to narrow lawmaker’s focus on what is referred to as the “investor loophole.”

State Rep. Aaron Michlewitz, D-Boston, has co-authored a bill that looks to regulate and tax short-term rental properties.

“Right now, this is an unregulated market,” Michlewitz said. Michlewitz’s bill looks to reign-in what he describes as an industry with “zero transparency and zero taxation.”

The bill also sets up a registry which Michlewitz says is important to give residents “an understanding of what takes place in their community.” When discussing the unregulated nature of the short-term rental market, Michlewitz says he often uses the example of Jack Worth, an Emerson College student who made national news after offering his dorm room for rent.

As lawmakers look to tighten regulations on the industry, residents have expressed concern as talks of taxes and fees enter the conversation.

“The Mayor’s proposed ordinance has many laudable attributes,” ADCO Chairman Ford Cavallari said in a statement, but cautioned that “many good, hard-working Boston residents are using Airbnb to help make the rent or pay the mortgage.”

The excise in Michlewitz’s bill would fall on the platform to which the rentals were listed, and not to the lister themselves, Michlewitz said. The variation of hosts on platforms like Airbnb, from residents renting an extra room to investors renting multiple homes, is one of the challenges in implementing any of the proposed regulations.  

The ADCO’s report differentiates a city resident offering a short-term rental unit from the property in which they live and those units in properties where the owner is not residing.

Data from the ADCO’s report shows that even though only 7.1 percent of Boston’s Airbnb hosts rented two or more units, those units amounted to 53 percent of all units city-wide. The ADCO expressed concerns that there was nothing included in the Mayor’s proposals that would address what they say is a fundamental problem.

Cities like San Francisco, Nashville, and Portland have banned these so-called “investor units.” Last November, Vancouver became the first major city in Canada to regulate short-term rentals and ban the listing of entire homes or apartments in a unit where the owner was not the primary resident.

The ADCO’s report gives an example of Domino, a New York City short-term rental speculator firm who posted more than 60 units in Boston between 2016-2017. Using the name “Anthony,” the firm created an Airbnb profile complete with a stock photo pulled from the internet, according to the report.

The Boston City Council’s first hearing on Walsh’s proposals ended split on the topic of investor units. Michlewitz continues to adjust his proposed legislation to address his constituents concerns and “frustrations with the lack of regulation.”

“There is a difference,” Michlewitz said, “between some of the people who are doing this on an occasion basis versus people that are doing this every single day and taking up housing stock.”

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