Airbnb to investors: communities want more control.

Airbnb started in 2007 when two guys rented out a room with an air mattress to earn extra cash. Last week, the company’s IPO confirmed the tech giant is worth over $100 billion. And CEO Brian Chesky admits one of the reasons they’ve been so successful is because they put inns and B&Bs out of business. Chesky also warned potential investors about business risks – angry neighbors and local communities who want more control over the impacts. 

This past Thursday, the Wall Street Journal featured a front-page article titled Airbnb’s IPO Warning: Unhappy Neighbors Are Fighting Back. It describes how “residents across the country have ratcheted up grass-roots efforts aimed at keeping authority over short-term rentals in the hands of towns and cities.” The CEO himself admits that the “popularity of short-term vacation rentals has generated local campaigns and generated publicity about the downside of living next door to a shifting cast of visitors.” 1

Big cities worldwide have taken measures to ensure investors can’t continue to snatch up homes and apartments to turn them into short-term rentals – the list includes Toronto, London, Paris, Rome, Barcelona, and Lisbon. Japan has a national law. In the U.S., examples are New York, Boston, Washington DC, Charleston, LA, San Francisco, Santa Monica, New Orleans, and Denver.

Resort destinations have also implemented solutions. Hawaii’s islands have varying protections against investor-owned short-term rentals, including caps and zones where they can’t operate. Kauai has had protections in place since 2008 and touts itself as the unconquered island. Closer to home, the Hamptons and other Long Island towns have minimum stays and other rules to try to prevent more houses falling into investor hands.

Arizona has its own story. In 2016, Airbnb and Expedia – owner of HomeAway and VRBO – successfully lobbied state leaders to take away local authority over short-term rentals. The result has been devastating to communities. In Sedona, years of investors buying up local housing supply has “demolished the long-term rental market,” Mayor Sandy Moriarty said. “So many residents have moved out that an elementary school closed last year,” she said. 1

The day before the Airbnb IPO, over 30 Arizona mayors, including Phoenix, Scottsdale, and Tucson, sent a letter to Airbnb and Expedia denouncing their lobbying efforts. At the top of their concerns is the inability to fight against “affordable housing stock […] being gobbled up by investors who are focused on short-term commercial uses […] rather than neighborhood stability and prosperity.” They add that “some communities have seen half of citizen police calls relate to problems with short-term rentals […] as a direct result of local communities’ inability to enact and enforce responsible regulations.” 2

The point is Nantucket is late to the game – probably because vacation rentals are a long-standing tradition. And although those still exist, more and more investors are eyeing Nantucket as the place to be.

Luckily, Massachusetts has given municipalities the ability to tailor solutions. The approaches are different from place to place – some towns have used existing zoning laws to outlaw all short-term rentals. Others have introduced general bylaws to work with current zoning laws and apply reasonable limits. Yet others have enacted new zoning laws to restrict short-term rentals in certain areas. Here are some examples:

  • Lynnfield, MA: The town cracked down on all short-term rentals after a man was shot and died at an Airbnb mansion party in 2016. After the murder, the building inspector issued a cease and desist prohibiting the owner from short-term renting his property. The case ended up in Land Court, where Judge Long upheld the town’s interpretation of its zoning bylaw prohibiting short-term rental businesses in residential districts.
  • Manchester-by-the-Sea, MA: In 2017, this north shore beach town enacted a general bylaw restricting short-term rentals to owner-occupied units – if it’s not someone’s home, it can’t be licensed.
  • Brookline, MA: adopted a combination of a general and zoning bylaw also focused on licensing only those homes that are owner-occupied. The intent is to ensure that the primary use of these properties remains a residence and to minimize the effects on the well-being of surrounding residents. 

ACK•Now’s proposal is a general bylaw that would work alongside Nantucket’s existing zoning bylaw to create a more sustainable economy and community. The Attorney General’s office has reviewed the article to ensure it is in the right form for our Town to implement. It’s time for people to stand up and say enough is enough before it’s too late. 

Enjoy the rest of your week,

Julia Lindner
Executive Director

1 Rana, Preetika, Airbnb’s IPO Warning: Unhappy neighbors are fighting back, Wall Street Journal, December 9, 2020: https://www.wsj.com/articles/airbnbs-ipo-warning-unhappy-neighbors-are-fighting-back-11607533225.
2 Read the mayors’ letter to Airbnb and Expedia CEOs dated December 9th, 2020: https://bloximages.chicago2.vip.townnews.com/havasunews.com/content/tncms/assets/v3/editorial/4/7c/47c5477e-3b7d-11eb-bfcf-a3aaa3e4982a/5fd3170e54fe0.pdf.pdf

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