Shortly after formal session resumed on January 3rd, House and Senate leadership announced their priorities for the upcoming year which include: the budget, affordable housing, health care, criminal justice reform, short-term rental taxation, and paid sick leave.
One of these priorities, short-term rental taxation, has been an on-going and unresolved issue for the Massachusetts legislature for the past three years. Allured by the popularity of short-term rental services, such as Airbnb, as well as the lack of state regulation of this industry, developers have begun to buy up both individual units and entire buildings in order to convert them to short-term rental properties.
Due to the fact that short-term rental properties are not taxed, the increased development of short-term rental units detrimentally affects the availability of affordable housing in Boston. City officials estimate that between 1,500 and 2,000 units have been lost so far but other estimates run as high as 4,000 units being converted from long-term housing units to short-term rental units.
After noticing the affect of Airbnb on his own neighborhood in the North End, Rep. Aaron Michlewitz filed H.3454 three years ago. This bill mandates that short-term rental properties would be subject to health and safety inspections, Airbnb hosts would be required to register with the state, and a taxation structure would be developed to levy between a four and eight-percent tax depending on whether a unit is owner-occupied or leased by an outside development company. Furthermore, half of the revenue collected from Airbnb would be put towards individual communities’ respective low and moderate-income housing.
Despite Rep. Michlewitz being one of the chairs of the Joint Committee of Financial Services, the bill has yet to make it past that committee. The Senate version of the Airbnb bill, S.1616 now H.3917, filed by Senator Michael Rodrigues, was referred to the House Ways and Means Committee on Sept. 21. Rep. Michlewitz, Sen. Rodrigues and other legislators are aware of the mounting pressure they face from hotel corporations and affordable housing advocates to resolve this issue. Before formal session concludes on July 31st, legislators are determined to present comprehensive legislation regarding regulating short-term rentals.
In response to the slow pace at which short-term rental bills are moving through the Massachusetts House and Senate, Boston Mayor Marty Walsh issued an ordinance on January 21st. This ordinance bans any property with outstanding code violations from being listed on short-term rental websites and requires owners of short-term rental units to register annually with the city. Owners of short-term rental units will pay a registration fee ranging from 25 to 100 dollars based on whether the unit is owner-occupied or leased by an outside development company. Owner-occupied units can host guests as often as they choose but outside investors of short-term rentals can not host guests for more than 90 nights per week. Hopefully, this ordinance proves to be a catalyst for Senate and House legislators to pass short-term rental legislation during the current formal session.
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