Gives cities and towns tools to regulate Airbnb units
As I meet with neighbors and community members, one concern rises to the top: affordable housing. As our state’s population and economy grows, housing costs continue to rise.
In many ways, we are victims of our own success. Our tireless efforts to improve the community, from cleaning Jamaica Pond to advocating for better housing in Mission Hill, have caused people to flock to our neighborhoods. And we welcome all people who want to join us as they set down roots, pursue degrees, or raise a family.
Technology, however, is rapidly evolving, disrupting communities and contributing to our housing crunch.
Short-term rentals, like Airbnb, started as an innovative platform and phone app where people could earn some income on the side by renting out spare bedrooms or houses while away. As this technology has developed, investors have seized the platform, and others like it, to turn units and entire buildings into de facto hotels.
This has created issues in cities and towns across Massachusetts. While many units are operated like hotels, they aren’t taxed or regulated like hotels, creating a legal grey area. They aren’t inspected for safety, and municipalities are unsure how many exist and how to best regulate them.
That’s why we in the House passed legislation to regulate and tax short-term rentals like Airbnb.
The House’s legislation creates a common-sense, tiered structure that encourages individuals to earn extra income by renting out spare rooms, while regulating, taxing, and ensuring the safety of units. It requires that all units be listed on an online, accessible registry with the state’s Department of Revenue. The registry will include a list of addresses, but for the sake of privacy, will not list names.
Our legislation categorizes short-term rental hosts into three categories:
- Residential Host: rents 2 or fewer residential units, taxed at 4%
- Investor Host: rents between 3 and 5 residential units, taxed at 5.7%
- Professionally Managed Host: rents 6 or more residential units, taxed at 8%
These categories recognize the difference between someone who rents out a spare bedroom and corporations that rent entire buildings (it requires any host with 6 or more units to employ a property manager and to maintain $1 million in liability insurance).
Our legislation recognizes that there are regional differences. For example, Boston’s approach to short-term rentals will vary from towns on Cape Cod or in Western Massachusetts. Other municipalities, like Cambridge, have already debated and implemented their own short-term rental ordinances. Under our legislation, individual municipalities have the ability to create their own regulatory structures, as well as the option to levy a local tax (up to 5% for Residential Hosts, up to 6% for Investor Hosts, and up to 10% for Professionally Managed Hosts).
If a municipality accepts the local excise tax, they will have to conduct a safety inspection on the residential unit within 60 days of the residential unit being listed on DOR’s registry. 25% of the funds received from the local excise tax applied to a Professionally Managed Host will be distributed to low- and moderate-income housing programs and 25% will be distributed to infrastructure. The state funds will go to vital programs like youth violence prevention programs, MassHealth, and public education.
This legislation prohibits hosts and hosting platforms from discriminating on the basis of race, sex, gender identity, ethnicity, sexual orientation, age, religion, disability, or nationality. It does not affect existing leases, rental agreements, or other types of landlord/tenant relationships. After passing in the House, the bill now goes to the Senate.
Overall, this legislation will tax and regulate short-term rentals like Airbnb. It empowers cities and towns to regulate short-term rentals and ensures safety for tenants and neighbors, based on what’s best for their community.
As someone who grew up in Mission Hill public housing, I understand how important safe and healthy homes and community are. In January, the House passed a $1.7 billion bond bill to preserve and construct affordable housing. Our short-term rental legislation is another tool in our toolbox to address the housing crisis we face in Boston, Brookline, and across the Commonwealth.
