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Short-Term Rentals

Click to download the ACK•Now Short-Term Rental Fact Sheet:

Click to download the ACK•Now white paper:

And if you want the Reader’s Digest version, here’s a summary of the findings.

For a printer-friendly version click below:

Additional Reference Material

Featured

The Economics of Fiber

The Economics of FiberWe’re all online these days. Working from home and accessing classes online is our only option. Not to mention, relying on the internet and cellphones to get in touch with loved ones. 

But how’s that working on Nantucket? Having spotty service is a common thing here. Lots of frozen Zooms and choppy conversations. Many have come to accept this as a quirk of living 30 miles out to sea. But maybe it takes a crisis to bring about change.

That’s where OpenCape comes in. 

OpenCape is a nonprofit out of Barnstable that operates an open-access fiber-optic network serving local governments, businesses, and residents of Southeastern Mass, the Cape & Islands. By acting as competition to traditional internet providers, OpenCape has improved service and brought down pricing for its customers. We spoke with CEO, Steven Johnston, and it just so happens Nantucket is high on his priority list.

Steven explained that laying fiber-optic cable across the Nantucket Sound is a lot easier and cheaper than adding a third electric cable. He estimates it would cost $6.5 million to bring “unlimited capacity” to Martha’s Vineyard and Nantucket. From there we could go one of two routes. We could follow in the Cape’s footsteps and grow organically by connecting businesses and others who can afford to run lines. Or, we as a community could build and operate our own network. Just like Westfield, MA. 

Westfield saw the opportunity to invest in a fiber-optic infrastructure as a necessity, like gas and electricity. Today, town-owned Whip City Fiber provides broadband access to over 70% of the community. The demand is so high it’s expanding to neighboring towns. As one resident put it: “It’s a valuable, locally owned utility. No rental fees for equipment, one flat rate month to month with no surprise charges.” It’s fast enough that many customers have gotten rid of cable altogether.

Fiber is also the key to reliable cell phone reception. In fact, it’s critical to 5G mobile networks.  

How much would it cost to build an island-wide network? The CEO of OpenCape thinks between $15-$20 million. Add the cost of laying the cabling in the Sound, and we have an island on fiber for under $30 million. Not out of reach when compared to sewer projects.

Why do we need a stronger connection to the world? Fiber-optic is an economic development tool. We need it to improve a small business’ ability to operate, grow career opportunities for islanders, raise the standard of living, and over time diversify the economy beyond tourism and construction. 

Ultimately, it’s one more step towards a more resilient island. 

Will the real estate community make the step toward survival?

The results came early in yesterday’s Town Meeting. Article 90 garnered 32% of the abnormally large crowd, falling short of the majority required to pass.

We want to extend a huge thank you to all our supporters who “tried” to make their voices heard. We expected this effort to take a couple of years – contentious issues like short-term rentals can take some time to succeed. 

One thing is for sure. Article 90 was the underdog facing a real estate industry in control of local government and voters heavily lobbied by big corporations spreading misleading information. 

We’re hopeful the real estate community will come around and help prevent investors from taking over the Island. After all, they supported the creation of the Land Bank in the early 1980s. Reading through the I&M coverage from this

period, it’s easy to find parallels between the need for a Land Bank then, and short-term rental regulations today – including the changing nature of buyers for whom money isn’t a factor. Back then, the difference is that buyers were “people interested in Nantucket for the solitude and privacy” – that sounds better than investors looking to turn a home into an STR business. (1)

In the words of J Pepper Frazier from 1983: “People here should realize they can destroy themselves by killing the golden goose. The quick sale gives you money, but it destroys things.” Even though the two sides may seem far apart, we need to do the right thing for Nantucket and find a solution. (2)

Town Meeting turned out to be a beautiful day – with voters stepping out from under the tents to warm in the sun’s rays. It was the first chance to see familiar faces after being cooped up for over a year for many folks. We look forward to in-person gatherings, community engagement, and other important issues to study and discuss.

Regards,

Land Council recommends YES on Article 90.

Environmental stewardship is perhaps one of the most important values for the Island community. It’s no surprise that so many voters put the Nantucket Land Council’s voter recommendation sheet on their shortlist of things to bring to Town Meeting. 

If you haven’t heard, the Land Council – the Island’s environmental watchdog – recommends a YES vote on Article 90. And if you misplace your insert from the Inky, don’t forget to print it: NLC 2021 Warrant Review

Here’s an excerpt from the organization’s email blast that relates to Article 90 – the Short-Term Rental Bylaw:

The NLC has spent considerable time discussing Article 90 and the short-term rental industry in the context of current development trends and impacts. As a component of the current rate and intensity of development on island which creates greater pressure on our fragile natural resources and impacts on the environment, island infrastructure, and quality of life, the NLC supports the regulation of investor owned short-term rentals and with recent amendments which reduces the hardship on island residents, supports Article 90. Please read our recommendations and associated comments for further details.

And if you’ve been too busy to read this week’s Inky, here’s our voter’s guide to Article 90.

It gives a full view of what’s at stake and why you should vote YES.

Setting aside Town Meeting, on this Memorial Day, let us remember the men and women who died while serving this great country.

Article 90 Amended Motion

As we communicated weeks ago, Tobias Glidden – the article 90 sponsor – will propose an Amended Motion on Town Meeting floor. Click here for the exact language.

The change is straightforward: year-round residents who want to short-term rent their primary residence (or part of it) are exempt from any limits on the number of days or minimum stay.

This language protects year-round residents’ ability to offer their home, back cottage, or garage apartment for long weekends or weekly rentals throughout the year – making it easier to afford the house and keeping dollars on Island. And since they live there most of the time, they can monitor any issues and ensure their neighbors are happy.

Islanders are being lobbied very hard – with emails and ads online – by VRBO, Airbnb, the Massachusetts Realtor Association, and companies like the Copley Group, Inspirato, and many smaller investors in the short-term rental business.

DON’T BE FOOLED! Article 90 is not a ban and is a reasonable approach – we have to start somewhere to protect the Island from becoming a rental resort like Sedona or Scottsdale.

Town Meeting is Saturday, June 5th. For many of us Town Meeting goers, this will be the first time we vote electronically. We’ll be able to vote our conscience without being judged.

Enjoy a beautiful weekend,

 

Local leaders taking the lead in regulating STRs.

The pandemic has accelerated the rise of short-term rentals in vacation spots around the country. Most towns adopted zoning laws a long time ago and never contemplated this trend. Although it’s a heck of a lot easier to turn the other way, local governments are pushing forward with measures to balance the need for visitors and those of the community.  The impacts from the increase in rental activity are in line with what we believe is happening to Nantucket – more outside investors buying up homes, local residents and seasonal workers with fewer housing options, neighbors upset with the effects on their quality of life, and the community that’s left with the trash, traffic, etc. Last week, in Freeport, Maine – a tourist town best known for its outlet stores and LL Bean – town councilors approved a bylaw to regulate short-term rentals. There is now a cap on the number of STRs, a limit of 16 people who can gather at any STR, and unhosted properties can only be rented once each seven days. Town Manager, Peter Joseph, says “…think of it as a small hotel being run in a residential neighborhood.” Other Maine tourist destinations like Kennebunkport, Cape Elizabeth, Rockland, Bar Harbor, Portland, and South Portland have all adopted or are looking to adopt similar regulations. Less than 60 miles away, hidden in the White Mountains, North Conway voters recently rejected a proposal to allow short-term rentals in residential areas. However, voters did approve a zoning article to help increase the year-round housing supply by allowing historic homes to convert into multifamily units – no STRs allowed, only long-term housing. With ski resorts like Wildcat and Cranmore nearby, North Conway depends on tourism. And similarly to Nantucket, residents and second homeowners have always rented their properties to offset expenses. But things have changed there too. Short-term rentals are taking away long-term rentals, the housing crisis is growing, and residents are unhappy with the effects on their neighborhoods. As one resident, Peter Brandon, said in a recent article: “There has undoubtedly been a negative effect on the availability of affordable housing in the valley with the rise in popularity of short-term rentals. The crisis we have is in large part the result of toxic and archaic zoning laws […] that have prevented the development of long-term affordable housing, yet have conveniently looked the other way for short-term rentals and those that benefit from them.” Discussions around the problems with short-term rentals often seem to start within the community – with neighbors or housing advocates, for example. And despite the sensitive nature of the issue, local leaders everywhere are implementing reasonable regulations to protect the future of their communities. Why isn’t the Select Board or another Town Board taking the lead? Voting for Article 90 at Town Meeting on June 5th is a way for voters to regain our community.

Enjoy your week,
 

In addition, Nantucket Together has an ad campaign trying its best to discredit our research – we’d like to set the record straight:

Claim #1: ACK•Now data is misleading. 

Answer: False. This accusation is completely unfounded. One of our core values is to be data-driven. Any data we show has a reputable source. Nantucket Together believes we’re twisting the Census housing data. We addressed their questions directly, and it was apparent they were misinterpreting a slide in a PowerPoint that clearly labeled the 2010-2018 data. This accusation is a poor attempt to discredit the organization and distract from the reality that Nantucket is changing dramatically and that we’re losing year-round homes to seasonal residents and short-term rental investors at an alarming rate. 

Amendment to Article 90 + response to false claims.

Here’s a note from Tobias Glidden, ACK•Now’s Chairman, and the sponsor of the Short-Term Rental Bylaw Article. It was sent to the Inky, but wasn’t published in this week’s edition:

To the Editor, 
Thank you for your recent coverage on the critical topic of commercial short-term rentals. However, I respectfully disagree with the Editor’s suggestion that I table Article 90. ACKNow has spent the last year researching the rise in investor-owned short-term rentals and their impact on Nantucket. We’ve had countless discussions and presentations with community members and groups.

We’ve gotten good feedback on improving the article to further protect islanders’ ability to call Nantucket home. As a result, I plan to propose an amendment on Town Meeting floor to remove the limit on short-term rental days and the minimum stay for the year-round residents who want to rent their homes short-term. It’s not a matter of whether Nantucket will regulate short-term rentals like hundreds of other communities have; it’s a question of when. 

Each day that goes by, more investors are buying homes to turn them into short-term rental businesses. We need to do something to stop Nantucket from turning into a Disneyland where no one lives (or wants to live). We can’t keep kicking the can down the road. The dump is closing in ten years, the third electrical cable is coming in 9 years, the quality of the water is severely compromised, the ocean is rising, and we live on an island! Article 90 is a step in the right direction. I hope we can all come together at Town Meeting on June 5 to protect Nantucket’s community and its future.

In addition, here are a few more answers to last week’s OpEd by Henry Sanford.

Claim #1: ACKNow is a professional lobbying arm representing a small group of interests with little collaborative input from the large group of people who would be negatively impacted.

Answer: False. ACKNow is structured as a 501c4 nonprofit, also known as a community advocacy group. Organizations such as homeowners’ associations are also typically organized as a 501c4 because there are rules about just how much advocacy a 501c3 can perform. The main difference between a 501c3 and 501c4 is the ability to hire lobbyists. For example, to push a bill at the State, such as the Transfer Fee legislation to fund affordable housing (S.D.565 and H.D.1911). Over five years ago, Nantucket voters voted an article at Town Meeting to create a small real estate transfer tax (0.5%) on the value of a property sales over $2 million. The goal was to secure sustainable funding for affordable housing without adding more burden on taxpayers. This homerule petition has been stuck at the state level ever since. Recent changes mean there is momentum to get something done statewide. ACK•Now is getting involved. We’re hoping to support the statewide coalition’s efforts by providing research and inviting lobbyists to the table to get to the goal line.

Claim #2: ACKNow data is misleading. 

Answer: False. This accusation is completely unfounded. One of our core values is to be data-driven. Any data we show has a reputable source. Nantucket Together believes we’re twisting the Census housing data. We addressed their questions directly, and it was apparent they were misinterpreting a slide in a PowerPoint that clearly labeled the 2010-2018 data. This accusation is a poor attempt to discredit the organization and distract from the reality that Nantucket is changing dramatically and that we’re losing year-round homes to seasonal residents and short-term rental investors at an alarming rate. 

Claim #3: The bylaw will change the landscape of homeowners and favor those who don’t need to rent.

Answer: False. Doing nothing is changing the landscape of owners. Commercial short-term rentals are businesses in residential neighborhoods, which we argue isn’t allowed by local zoning bylaws. These owners are focused on maximizing the revenue and profit, which means adding all the amenities necessary to make the vacation rental as attractive (and expensive) as possible. As the demand for short-term rental businesses grows, the Island is gaining more absentee property owners. In just a few years, there will likely be more short-term rental businesses than year-round homes. What will the Island look like then? The proposed bylaw favors year-round residents as well as those who want to spend time on Nantucket and rent short-term to offset some expenses. This is in keeping with Nantucket’s tradition.

Claim #4: The cost of housing is not driven by short-term rental anymore than interest rates, land conservation, explosion of wealth.

Answer: Yes – but our community can control the impact of short-term rentals. The cost of housing is driven by many factors, most of which we have no control over. Our community can’t change the federal tax code, it can’t limit who buys a home, and it can’t control interest rates and the national economy, all of which also fuel the short-term rental industry. In 2019, the Baker Administration voted in enabling legislation to give municipalities control over short-term rentals. Communities from Salem, Brookline, Plymouth, Boston, and Mashpee have regulated short-term rentals. 

How does the demand for short-term rentals affect home prices? Let’s look at a concrete example. In 2008, the Island of Kauai, HI, banned new short-term rentals in residential areas and grandfathered those short-term rentals which had been operating for at least two years. Even full-time residents can’t STR their homes unless the property has a grandfathered permit. Today, properties with STR permits consistently sell for 25% more than those without a license. The opportunity to operate a short-term rental business is driving up prices in a significant way. For this and other reasons – including the creation of wealth in recent years – Nantucket’s home prices are now completely out of reach for most. In 2011, homes sales under $1 million represented 43% of total home sales. In 2020, the number dropped to 8% (Source: mylinkmls.com). The median home price is $2 million. 

Claim #5: ACKNow is using affordable housing as a Trojan Horse in a manipulative attempt to pass land use without going through normal zoning bylaw process.

Answer: False. I’m proud to be part of the team at ACKNow. I have deep respect for our board members. Each of them has a history of helping the community to afford to live on the Island. From participating in creating the affordable housing covenant program, sponsoring a $20 million article for affordable housing projects to protect the Island from unfriendly 40Bs, helping to feed struggling families, and countless contributions to local nonprofits, including those focused on helping children and families in need. The link between commercial short-term rentals and local housing shortages is documented in countless studies (some of which are on our website).

Another thing is for sure. Nantucket can’t build its way out of the housing crisis. It’s a problem that requires many solutions, and ACKNow is working on this effort and collaborating with others on more exciting initiatives. Lastly, the proposed article is in the form of a general bylaw, consistent with the State’s enabling legislation. It has been reviewed preliminarily by the State and by Nantucket’s Town counsel. 

Claim #6: Financial stability of the Town and rating agency, revenue at risk.

Answer: False. The Town of Nantucket is in a great financial position. Nantucket is believed to be one of the select few islands in the US with a triple-A rating. There are many factors at play, including:

  1. The stability and wealth of its tax base,
  2. The Town’s stable and healthy financial positions, mainly driven by its reserves, and
  3. Strong fiscal management.

For Nantucket to continue to enjoy this favorable position, we must continue to protect its community (both year-round and seasonal). We must foster a sustainable tourism economy and in line with safeguarding what makes Nantucket so special. The short-term rental licensing bylaw is not intended to have a dramatic impact on the lodging tax. The intent is to restore a balance and reduce the adverse effects of commercial STRs: additional pressure on year-round housing, neighborhood disruption, traffic, stress on the infrastructure (water, sewer, and landfill), and the environment, all of which run the risk of making Nantucket unattractive over time.

Claim #7: [the bylaw is] poorly crafted, elitist policy coming from a distant enclave and a chic office with fancy marketing. 

Answer: False. The bigger question might be whether Nantucket will let real estate interests dictate the long-term planning of the Island? Like it was mentioned above, this organization is about protecting what the community loves about Nantucket. As it stands, Nantucket is at risk of being institutionalized – the businesses and homes purchased by off-island companies and investors, sending most of the rental income (short- and long-term or commercial) and business profits off-island. Short-term rentals are only part of the picture, but it’s an excellent place to start because voters have an actual set of tools to address the issue. The short-term rental licensing bylaw is the culmination of many months of extensive research and discussions. All along the way, we’ve been communicating our findings and getting feedback from different community groups to improve the solution.

As for the attack on our office on Easy Street – it was designed with the help of our favorite local designers and outfitted at IKEA. From the beginning, our founding members thought it necessary to have a physical presence in Town. We are grateful for our office space and our small staff team. Now that things are beginning to return to the new normal, we’re looking forward to inviting community members to come to discuss the issues that matter to them.

Enjoy the rest of your week,

Executive Director

This week’s Inky coverage and a clarification.

This week’s edition of the Inquirer & Mirror presented arguments on both sides of Article 90, our proposed short-term rental licensing bylaw. I’m attaching the OpEd authored by our founding board member, Peter McCausland, if your newspaper copy hasn’t arrived yet. 

The other OpEd published that argued against the bylaw was authored by Henry Sanford – a Nantucket real estate professional and manager of inns and short-term rentals. It contains false accusations on ACKNow, including saying we’re using “affordable housing as a Trojan horse” to bring forward an agenda. Let me clarify. I’m proud to be part of the team at ACKNow. I have deep respect for our board members. Each of them has a history of helping the community to afford to live on the Island. From participating in creating the affordable housing covenant program, sponsoring a $20 million article for affordable housing projects to protect the Island from unfriendly 40Bs, helping to feed struggling families, and countless contributions to local non-profits, including those focused on helping children and families in need. 

Click here to download both OpEds.

As Peter says in his OpEd, the link between commercial short-term rentals and local housing shortages is documented in countless studies. Nantucket can’t build its way out of the housing crisis. It’s a problem that requires many solutions, and ACKNow is collaborating with others on exciting initiatives we will discuss next week. 

Enjoy this beautiful day,

Executive Director

215 new short-term rentals in 6 months.

The number of short-term rentals on the Island keeps growing. The State’s registry shows Nantucket added over 200 short-term rentals in just six months – that’s a 10% increase for a total of 2,215 registered short-term rentals by the end of 2020.

Meanwhile, Nantucket is losing 65 year-round homes each year, despite a growing population. It’s like being stuck in a never-ending game of musical chairs where more players keep showing up.

What happens if a seasonal resident or a short-term rental investor buys each year-round home that sells? By the end of the decade, we would need to build 1,300 homes to replace the housing lost in the last 20 years. It’s a lousy proposition – overdevelopment is already a threat.

It’s hard to see a way out of this.

The community needs strategies to retain the year-round housing that’s already there. And stopping investors from picking Nantucket to open a short-term rental business is part of the solution. Otherwise, each time voters are asked to fund affordable housing, they are indirectly subsidizing investor-owned short-term rentals.

Like other “gem” communities in the world, Nantucket has been facing decades of outside forces. Nantucketers have fought to put in protections like the LandBank and the HDC. We must continue to fight to protect the Island and its fragile resources, or it will be ruined by overdevelopment and all the resulting fallouts.

Enjoy your week,

Executive Director

P.S. Visit our website to read all about Short-Term Rentals.

Know someone who loves Nantucket? Please forward this email to them and ask them to subscribe to receive our notices. Together we are stronger.

And if you’d like to support ACK•Now, please visit here.

ACK•NOW aims to protect the island and its community.

In case you haven’t had the chance to read the latest edition of the Inquirer & Mirror, here’s a letter to the editor we submitted.

To the Editor,
 
Last week Mr. Barnes wrote a letter to the editor with thoughts about ACK•Now and our proposed article on short-term rentals. Mr. Barnes acknowledges there’s a problem to be solved but thinks ACK•Now as an organization isn’t in a position to bring forward an article. I knew Mr. Barnes wasn’t right in saying ACK•Now couldn’t be behind an article, and checked in with our organization’s lawyer. Here are her thoughts: 
 
“I have strong feelings about Mr. Barnes’ contention that ACK•Now cannot bring a citizens’ petition.
 
In general, it is not remotely unusual to have a local nonprofit sponsor an article. You have a Nantucket address, employ Nantucket residents, pay rent to a Nantucket landlord, and your mission statement involves solely issues affecting Nantucket.  The idea that you are not able to sponsor an article – absent some local bylaw accordingly – is bologna.
 
Nantucket has no such local bylaw.  Thus, it is bound by state law concerning citizens’ petitions.  That law provides that:
The selectmen shall insert in the warrant for the annual meeting all subjects the insertion of which shall be requested of them in writing by ten or more registered voters of the town and in the warrant for every special town meeting all subjects the insertion of which shall be requested of them in writing by one hundred registered voters or by ten per cent of the total number of registered voters of the town whichever number is the lesser. G.L. c. 39, §10. Thus, as long as the sponsor has the requisite number of registered voter signatures, it is a valid article required to be included in the Warrant.”
 
ACK•Now is an organization advocating for a better quality of life on Nantucket supported by many year-round and summer residents. Our objective isn’t to “prevent” all short-term rentals but to place reasonable limits on these businesses operating in residentially zoned areas before they destroy our community. The reality is year-round housing is vanishing. The island lost 35% of the year-round rental stock in 8 years – that’s 600 year-round rentals that are gone. We will cease to have a community if we don’t do something. The economic impact over time will be limited and is certainly a lot less than what investor-owned short-term rentals have cost the island thus far. Business owners are forced to provide housing to attract and retain employees, taxpayers are subsidizing the construction of affordable housing and infrastructure, and residents are paying through the roof for homes to buy or rent – all effectively subsidizing these investors who are operating businesses in residential neighborhoods.
 
Mr. Barnes made a few good points, and we agree with him that a 7-day minimum could impact year-round residents – especially those short-term renting a room in their home. The article recognizes that some Nantucket residents need to rent their cottage or a room to be able to afford their home, and we’re open to changes that protect year-round families. It would be nice if homeowners listing an apartment on Airbnb 365 days a year would decide to offer a year-round rental or even a combo of summer and winter rental instead – that’s the reason behind a 90-day limit on the total short-term rental days for residents. As Mr. Barnes points out, we can easily strengthen the residency requirements for resident permits. There’s also a fairness issue – inns and B&Bs pay thousands every year for fire inspections, landfill fees, and even more in commercial taxes. These lodging establishments operate in commercial zones, while investor-owned short-term rentals skirt the expenses and zoning laws by operating in residential neighborhoods. We have studied this and benchmarked similar communities.
 
ACK•Now is born out of a desire by community members to progress towards a more sustainable future for the island. Nantucket is turning into an island-wide luxury resort. Our proposed bylaw intends to protect against corporations and investors (disguised as owners) deciding Nantucket is the perfect place to open or expand a short-term rental business. Housing is affected, but so are neighborhoods – no one wants to live next door to an investor short-term rental business. Many ask whether this is allowed and how they can regain a quality of life. Meanwhile, real estate is having its best year on record; sewer, stormwater, and water infrastructure are taxed; and, the island faces numerous environmental challenges. Many Nantucketers know this is happening, and we believe they will support a reasonable solution.

Enjoy the rest of your week,

Julia Lindner
Executive Director

A plum for whom?

With a new year finally here, we look for ways to make a difference where it matters. For Nantucket, working to solve the housing crisis remains a top priority to ensure the year-round community’s survival. Different local and state programs attempt to make progress. Many people are familiar with the controversial Chapter 40B, whose goal is to build neighborhoods where low and moderate-income families can afford a home. The state law expedites 40B projects by reducing barriers such as local zoning. Most 40Bs are a mix of market-rate and affordable homes – with market units typically serving middle-income families. Nantucket is no stranger to 40Bs – a recent one is Beach Plum Village. But is it having the intended impact? Let’s take a closer look. 

Beach Plum is a mid-island neighborhood with 40 nicely designed and landscaped houses – 10 of which are restricted affordable homes owned and occupied by island families. The other 30 are market-rate houses – nearly all purchased by off-island residents and at least 14 short-term rentals. 

Wait. 40Bs have short-term rentals? 

Well, yes and no. The restricted affordable homeowners aren’t allowed to short-term rent their home, but market-rate owners are. See the map below for a visual. The reality is that Beach Plum Village created more short-term rentals than year-round homes. Can this be stopped? 

We spoke with a retired official from Mass Housing who suggested, “the short-term rental restrictions such as ACK•Now proposes may give the Town what it needs going forward to set limits on their use in 40B projects.”

Figure 1. Beach Plum Village
— (Pink) Short-Term Rental

— (Blue) Deed Restricted Affordable Home

 

The goal of 40Bs is to create homes — not summer houses, not investor short-term rentals. Without an STR bylaw, what’s to prevent another Beach Plum? What’s to stop more year-round housing from going down the drain? Putting limits on investor-owned short-term rentals is a better solution than prioritizing growing the short-term rental tax at the community’s expense.

Enjoy the first week of 2021,

Julia Lindner
Executive Director

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