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Investor Units Eliminated in Mayor’s New Guidelines for Short-Term Rentals (Airbnb)

After receiving harsh criticism at the Boston City Council and from neighborhood activists of the “investor unit category” in his proposed regulation of short-term rentals, Mayor Walsh filed an amended ordinance on Wednesday that would completely ban AirBnb rentals in non-owner occupied buildings. Allowance is provided for owners living in a multi-unit building for short-term rentals, up to 120 days per year. Otherwise, “ad hoc hotels” in investor owned buildings would need to have their properties re-zoned as “commercial” (from residential) in order to use short term rentals under the proposed guidelines.

“We heard loud and clear that we needed to rethink our approach to investor units,” said Walsh in a letter to the City Council. “Allowing non-owner, non-tenant occupied residential units to be used for short term rentals, but only up to 90 days, did not work for a variety of stakeholders. … Ultimately, we decided that this type of short term rental use in residential units was not what most Bostonians wanted, so we’ve removed it from the policy.”

Citing an effort to preserve Boston’s housing stock, Walsh’s amended proposal modifies his original ordinance filed in January and will again go before the Boston City Council. The filing also complements proposed statewide legislation regarding short-term rental taxation, safety and transparency, recently sponsored by the North End’s Rep. Aaron Michlewitz and passed by the State House of Representatives.

While absentee owner, investor units are restricted in the amended proposal, the new ordinance allows for greater flexibility for property owners looking to list their primary residence as a short-term rental, as well as for owners of multi-unit properties. Using a three-tiered approach to classifying short-term rental units, the regulations would be as follows:

Limited Share Unit: consists of a private bedroom or shared space in the owner-operator’s primary residence, in which the operator is present during the rental. The fee associated with this classification is $25 per year.
Home Share Unit: consists of a whole unit available for a short-term rental at the primary residence of the owner-operator (unit in which operator resides for at least nine months out of a 12 month period). The fee associated with this classification is $200 per year.
Owner-Adjacent Unit: consists of an owner-occupied two- or three-family building, in which the owner lists a secondary unit as a short-term rental for up to 120 nights per year. In addition, the owner is able to list their primary residence for an unlimited number of nights-per-year. The fee associated with this classification is $200 per year.

After opposing the original filing with the investor unit category, City Councilor Michelle Wu is now supporting the Mayor’s revised guidelines. “This ordinance offers reasonable regulations of short-term rentals to close corporate loopholes, protect our housing stock, and stabilize neighborhoods,” said Wu in a statement. The amendment is a win for the at-large councilor who has been aggressively targeted by Airbnb in its campaign to lobby in favor of investor unit short term rentals.

Also supporting the guidelines, after the revisions, is District 1 City Councilor Lydia Edwards. “I fully support the city’s efforts to regulate short-term rentals while providing an opportunity for homeowners to earn supplemental income,” said Edwards, Chair of the Council’s Committee on Housing and Community Development. “This legislation will prevent speculative activity that has taken rental units off the market, displaced tenants and hindered the city’s efforts to provide stability for all of Boston’s residents.”

The regulatory guidelines would also provide safety protections, annual registration, a license fee and notice to abutters of a short-term rental unit within 30 days of approved registration.

View the Mayor’s amended proposed ordinance here.

3 Replies to “Investor Units Eliminated in Mayor’s New Guidelines for Short-Term Rentals (Airbnb)

  1. Checking theAirBnB stock in the North End, it is easy to see the difference. The screen shot above shows deep discount properties. The prices now shown seem to reflect the increased cost of doing business. Also, the removal off investor, allows compliant renters to get a better price.

  2. Yes, it made no sense (and was illegal) to allow commercial use of residential property. Let the investors TRY to get the property rezoned for commercial use, along with all the other costs that go with that, including all of the regulations that the City and State impose on hotels, primarily to ensure public safety. However, how is a unit let for short-term rentals “for an unlimited number of nights per year” a “primary residence”?

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