MONTPELIER — A new bill seeks to regulate properties being used for short-term rentals like lodging establishments if operators don’t meet certain residency requirements.
“There’s a whole host of hospitality regulations that work really well here,” said state Rep. Emilie Kornheiser, D-Windham-2-1, who introduced the bill known as H.200. “I think some people are interpreting this as no one can ever rent out a property to tourists ever again.”
Kornheiser acknowledged that older Vermonters may have a lot of extra space in their home they want to rent out to help with their mortgage or property taxes, and younger residents may have a large house with extra rooms they want to occasionally rent out. She said the bill wouldn’t seek to regulate them like lodging establishments.
“This is for people who are essentially engaging in the hospitality industry,” she said.
The residency requirement in the bill currently says those who can run a short-term rental without lodging regulations must have “occupied the dwelling unit as his or her primary residence for 270 days of the preceding year.” Or if they have owned or leased the unit for less than a year, they must have occupied it as their primary residence for more than 70 percent of the days that the person has owned or leased.
Kornheiser heard about issues specific to the COVID-19 pandemic including difficulties getting in touch with short-term rental owners when the governor’s office was trying to implement rules related to public safety. She’s also been aware of ongoing concerns over the years.
The bill is intended to level the playing field between lodging establishments and short term rental operators. It also aims to address safety and a shortage of housing in Vermont.
Last year during the annual Tourist Day at the Statehouse, Kornheiser heard from many longtime bed and breakfast owners and others who have been in the hospitality industry for a while about what she described as “the strengths of the Vermont brand, and what hosting means in the context of Vermont and Vermont’s economy.”
As a legislator from Brattleboro, Kornheiser said she tends to bring forward more “lefty” proposals. But she’s finding support for the bill from two groups that aren’t usually on the same side of the issue — the affordable housing community and Vermont Chamber of Commerce.
Kornheiser said the bill would still allow for those in the hospitality industry to book reservations or advertise services on platforms such as airbnb.com.
Rep. Kelly Pajala, I-Windham-Bennington-Windsor, and Rep. Selene Colburn, P-Chittenden-6-4, co-sponsored the bill. Kornheiser said Pajala is from Londonderry, a ski mountain town, and Colburn is a progressive from Burlington, where short-term rentals are already regulated.
Legislators coming together from different sides of the political spectrum showed Kornheiser there’s a need to work on the issue. The bill’s stated purpose is to “maintain and protect Vermont’s residential rental market; support property owners to stay in their homes; prevent real estate speculation; and ensure that short-term rental operators participating in the tourism economy are subject to the same supports and restrictions governing other lodging establishments.”
With a lot of towns taking regulation of short-term rentals into their own hands, Kornheiser worries that a patchwork of regulations might create confusion for people and corporations running the properties. The hope is to have a clear policy statewide.
Kornheiser described Brattleboro, where she lives, as a tourist town and the first stop when entering Vermont on Interstate 91 from Massachusetts. She said the community has the lowest vacancy rate in the state for rental properties.
“So accessible long-term housing is something I’m always concerned about,” she said.
Brattleboro has a lot of “lovely places to stay that have been here for decades,” she said, such as bed and breakfasts and boutique hotels.
Kornheiser has received some correspondence from owners of short-term rentals who live out of state. She said she’s responding even though they’re not her constituents and she’s stressing that the properties won’t be shut down but “appropriately regulated” for the way they are being run.
“We have people who own second homes or third homes and that’s a pretty serious privilege in this country at this point given how many folks don’t even have a savings to get through one month,” she said. “So the idea of designing policy to subsidize folks’ second home strikes me as wild given all the concerns we hear about Vermonters trying to make it work.”
Kornheiser anticipates there will be different conversations as the bill gets picked up by other committees. She noted another bill seeks to create a registry of all rental properties, including short-term rentals.
UNINTENDED CONSEQUENCES
Rep. John Gannon, D-Windham-6, said he believes regulation of short-term rentals should be done at the municipal level as was recommended by the Short Term Rental Working Group in a 2017 report to the Legislature.
“I am concerned that H.200’s residency requirement, which I note is stricter than our residency requirement to vote or pay taxes, represents an unconstitutional taking,” he said. “I think that H.200 will have unintended consequences that will impact groups that can ill-afford another hit to their income.”
Gannon said the 2017 report found that 63 percent of short-term rental hosts are women and 29 percent are older than 60.
“In the month of December 2020, 69.2 percent of unemployment claims were attributed to women and many of the older hosts are using short-term rentals to age in place,” he said, referring to claims in Vermont. “Are these groups that need another hit to their pocket book? I think not.”
Richard J. Sedlack of West Dover, who has recently approached the Dover Select Board about issues involving a neighboring property and plans to testify on the issue, called the bill “a great start.”
“But with any change in the third quarter, you’re going to have some barking from the sidelines,” he said. “My first question is, what do we do with the ones that are already here?”
He said more than 70 percent of short-term rentals operating in Dover and West Dover on Airbnb.com link to properties on the grand list that are owned by people residing out of state.
One of his concerns has to do with those renting the properties. He said parking lots can be sloppy with entrances and exits not properly cleared in the winter.
“It’s dangerous for them,” he said.
With renters coming from warmer areas, Sedlack worries they’re not prepared for some of the amount of snow that can fall in his community. He said they arrive in cars not equipped for the roads and they can be put in very dangerous situations.
Sedlack said a house that sleeps a dozen people and costs $400 a night comes out to about $33 a person, “not really resort town clientele that eat in the restaurants, shop here and serve the community.”
“Twelve people in a four-bedroom house is more of a party than anything else,” he said. “So the Department of Fire Safety would need to be involved and they don’t really have the manpower for it.”
Sedlack has called the Vermont departments of fire safety and public safety, and said he was told they’re not staffed to handle complaints. He said he has received some help from the Dover Police Department when cars were in the way of getting out of his driveway, which is a right-of-way shared with a short-term rental property.
“My biggest concerns are for our local police,” he said. “They work very hard to handle the current directives every weekend: DUIs, seatbelts. How are they going to have the manpower for more enforcement?”
His suggestion is “a separate desk at every police department or sheriff’s department or even at the state police level with weekend staffing to cover this need,” as most of the business occurs at those times. He said the bill has been a long time coming, since Airbnb.com started about 12 years ago.
“We can’t just throw this out there and say we’re done. We need to back it up and that’s what I look forward to seeing, what comes out of it,” Sedlack said. “The biggest pain is for the people who live around it. My bottom line is these are businesses and they do not belong in residential districts without conforming with the bylaws of the specific towns, where they need to go before the Development Review Board in the town.”
Sedlack said he supports local residents, small businesses and the preservation of Vermont. For lodging establishments to compete, he said, “you got to level the playing field.”
He noted local hotels need annual fire inspections, expensive fire alarm systems and proper fire exits. They also provide some supervision and can deal with complaints or issues.
Neighbors “have to be the guidance counselors but we’re not making money off of this,” Sedlack said. “And during this summer, during COVID, I was so excited to spend a summer home without traveling for business to hike and enjoy things, and it was a zoo in Dover. Loud music, fireworks, dogs running amok.”
Sedlack is calling for an allocation of available housing be made available to local residents. He believes there should be a standard set in zoning and suggested a new law might need “some customization” town by town.
“No matter what we’re doing, we’re ignoring the basic guidelines for public safety with the current status of short-term rentals,” he said. “We’re completing ignoring public safety, and that’s for the renters and the people who live around here.”
