NORTHAMPTON — Airbnb hosts and others who rent out rooms in their homes on a short-term basis must register with the state, carry insurance and pay state lodging taxes, based on a new state law signed by Gov. Charlie Baker in late December that goes into effect July 1.
While the law is expected to generate $25 million annually for the state, for municipal leaders the long-awaited legislation finally gives them an opportunity to begin exploring how to better oversee those participating in the industry and crafting rules for compliance.
“I will be pulling together local building and health officials to look at what types of regulations we may want to put in place for Northampton that we are legally allowed to do,” Northampton Mayor David Narkewicz said.
Narkewicz said the ability to more broadly regulate short-term rental enterprises has been discussed for several years, but the decision was made to wait until the state promulgated rules.
There is already an infrastructure for inspections of many types of lodging, including hotels and bed and breakfasts, so Narkewicz said the key will be applying this existing local process for licenses and safety inspections to Airbnb rentals.
Amherst Planning Director Christine Brestrup said officials are preparing to begin work on addressing Airbnb.
“We’re certainly interested in looking at the issue. We were waiting for the state to come out with regulations,” Brestrup said.
Brestrup said she will be meeting with Building Commissioner Rob Morra and Assistant Town Manager David Ziomek and determining how to address the matter, either through the zoning or the general bylaw.
Bed and breakfasts, for instance, are in the accessory use section of the zoning bylaw, Brestrup said, which allows homeowners to rent to three or fewer people at a time without getting a special land-use permit from the Zoning Board of Appeals.
To collect local lodging taxes on short-term rentals, Narkewicz said his understanding is communities don’t have to take any action if they have accepted the local option statute, meaning Northampton and Amherst will automatically get the 6 percent room occupancy tax already collected from hotels and motels.
One of the aspects of the state law Narkewicz is interested in learning more about is the “managed apartment building,” which are short-term rentals by operators who don’t live at the properties, and rent out two or more rooms at a time. An additional 3 percent local option tax can be levied on these properties, which have driven up rents and limited the housing stock.
“One of the impacts of room sharing has been the impact on the availability of long-term rental units,” Narkewicz said.
The state law, though, is not popular with Airbnb.
Liz DeBold Fusco, a spokeswoman for Airbnb, said in a statement that the company is proud of the community it has built in Massachusetts.
“While we are deeply disappointed in the flawed bill that emerged from Beacon Hill during the lame duck session, we will continue the fight to protect our community and the economic engine of short-term rentals for hosts, guests and local small businesses,” Fusco said.
Andrew Kalloch, Airbnb’s head of public policy in Massachusetts, said the company has long supported simple reforms, including provisions for collecting lodging taxes, with the platforms getting the money from anyone who rents a room or a house out at least 15 days in a calendar year.
But Kalloch said the state law is a “complicated regulatory regime” that will put barriers in place, including for the many senior citizens who are using Airbnb as a way to age in place.
“This is the first time a state has required every individual host to register,” Kalloch said. This causes the risk of personal and private information being available online for anyone to see, and could intimidate hosts, he said.
Kalloch said Airbnb is prepared to work with the governor and his team on the administrative issues caused by the law.
In Massachusetts, the company says it has about 15,700 active hosts, 60 percent of whom are women, and 22 percent 60 and older. Typical hosts made approximately $7,800 per year from sharing their homes for three or four nights per month.
Statistics provided by Airbnb show just how popular it is in the region, with about 330 active hosts in Hampshire County, more than three-quarters of them women, and about one-third 60 and older. A typical host made $5,500 last year, sharing their home for three to four nights per month. In 2018, Hampshire County hosts welcomed 25,400 guests and made a total of approximately $3 million.
During the same period in Franklin County, about 200 active hosts made an average of $4,400 a year for sharing their home for two to three nights per month. In 2018, Franklin County hosts welcomed approximately 11,700 guests and made a total of approximately $1.3 million.
Kitty Axelson-Berry said she uses her Stony Hill Road home in Amherst as part of the sharing economy, not as a business.
“It’s an opportunity to share extra space and provide a warm home for visitors, a responsibility I take seriously,” Axelson-Berry said.
She is not against registering or paying additional taxes or fees, though this could increase the cost of providing what has been inexpensive temporary housing.
Inspections and the insurance requirement, however, place a burden on the town. “Adding layers of bureaucracy is counterintuitive unless they serve a purpose, which these do not seem to do,” Axelson-Berry said.
Lydia Berry, who assists with Airbnb rentals for TIA Architects on Main Street in Amherst, said that having an official register of who in a community is hosting is good for public safety and knowledge, and beneficial for planners to better understand their jurisdictions.
“I also think taxing Airbnb hosts the same as other hospitality businesses is only fair,” Berry said.
But like Axelson-Berry, Berry said she is concerned about licensing, which could impose costly facility inspection costs and standard licensing fees, and would in effect create a surveillance system of these operations.
For those who run traditional bed and breakfasts the new state law means the playing field will be leveled and Airbnb proprietors will have to abide by most of the rules other innkeepers and hotel operators do.
“I’ve been waiting for this for a long time, and I think it’s a great idea,” said Craig Della Penna, who has owned and operated the Sugar Maple Trailside Inn for the past 15 years. “Airbnbs will be coming out of the shadows, so to speak.”
More than 90 are operating within 10 miles of Northampton City Hall, Della Penna said, but they are off the radar screen, with no municipal inspections being done and no signs announcing their presence.
He noted that being underground means they aren’t part of chambers of commerce, bed and breakfast associations or the Hampshire Regional Tourism Council. Della Penna envisions that a centralized calendar and information about rooms available would be a good thing.
“I’d like to set them up within the Northampton Area Bed and Breakfast Association,” Della Penna said.
The state law does close a loophole in which bed and breakfasts with three or fewer rooms are no longer exempt from paying the state and local lodging tax. While prices will go up due to this, Della Penna said it will benefit the state, rather than seeing money flushed off to San Francisco, Airbnb’s headquarters.
Joan Stoia, who operates The Centennial House in Northfield, worries that the state law should have been adopted years ago.
“The legislative response is too little, too late,” Stoia said.
She noted she had to learn about public health and serving food in a safe manner, carry insurance, have fire extinguishers and adequate egress.
“We’re doing what should be done if you’re a professional innkeeper,” Stoia said.
Airbnb, by contrast, has been disruptive and allowed people to not play by the rules, being run by what she calls “a bunch of kids in San Francisco who found ways to bilk venture capitalists out of millions of dollars.”
Stoia said society needs to discourage the share economy.
“This is no substitute for a living wage,” Stoia said. “Renting your kids’ room out when he’s in college to make a few bucks is no substitute for having flat wages for the past 20 years.”
She advises communities to use their zoning to respond to the short-term rental phenomenon. For example, in Northfield a business zone is the only place for retail stores, restaurants and bed and breakfasts.
Massachusetts Lodging Association President Paul Sacco said in a statement he supports the law, observing that Airbnb has caused rents to rise and disrupted neighborhoods.
“By adopting a more level playing field between short-term rentals and traditional lodgers, lawmakers made great strides toward a more fair and sensible system,” Sacco said.
Scott Merzbach can be reached at smerzbach@gazettenet.com.
