Burlington’s attempt to regulate short-term rentals comes to an end

A sign lists an apartment rental website in Burlington on Friday, November 19, 2021. Photo by Glenn Russell/VTDigger

After two years of deliberations, the Burlington City Council could approve regulations on short-term rentals — accommodations such as those advertised on Airbnb, Vrbo and similar sites that house guests for less than 30 consecutive nights — as early as this month. next.

Councilors say the regulations would free up living space as the city faces a low vacancy rate. They also hope to set standards for an industry that remains largely hidden from the scrutiny of city officials. Although city officials know there are about 250 short-term rentals in Burlington, they have little data on their location, housing style or owner.

But the push for regulations has been met with resistance from a vocal coalition of short-term rental landlords, who argue that regulations would not alleviate Burlington’s housing crisis and could drive visitors away from a region that depends on tourism.

The most controversial proposal is an “owner occupancy” requirement, meaning that landlords who are short-term tenants must reside in the premises of the unit they are renting.

“Burlington has much bigger problems than 200 to 250 Airbnbs,” said Justin Holden, a short-term rental landlord who likened the council’s efforts to increase housing by regulating properties to “mow the lawn during the house is on fire”.

Still, supporters argue that Burlington needs as many long-term rental units as possible, and that short-term rental landlords have taken a risk by stepping into a legal “vacuum.”

“They built a business model and their life around something that was not a permitted use,” said Councilman Chip Mason, D-Ward 5, chairman of the council’s ordinance committee.

A vote on regulating short-term rentals is expected next month, City Council Speaker Max Tracy, P-Ward 2, told VTDigger, though the exact language of the ordinance has yet to be released. finalized.

Apartment buildings in downtown Burlington on Friday, November 19, 2021. Photo by Glenn Russell/VTDigger

Resident host or toast?

Although councilors have yet to draft the official bylaws, the latest basis for the argument is a draft ordinance that planners presented to council on November 8.

The proposal included two exceptions to the owner-occupancy requirement: the first simply exempts homes listed by the assessor’s office as seasonal residences, while the other offers a more nuanced loophole.

If landlords rent a long-term unit at a rate that meets the city’s affordable housing standards, the proposal says, they can also operate a short-term rental in that building without living on-site.

In addition, by redefining the term “host”, the proposal allows another exemption to owner occupancy. The host — who must live on the property — is now the person who operates the short-term rental, not the person who possesses this.

This means, for example, that a long-term tenant living in a duplex could house for a short-term rental in the other unit of the duplex, while the owner of the building lives elsewhere.

Advisors from both sides have expressed reservations about the Nov. 8 proposal.

Councilor Jack Hanson of District P-East said the city’s affordable housing standard — as outlined in its inclusive zoning guidelines — is too high for some low-income residents.

Councilor Joan Shannon of District D-South said she would not support the proposal as written because it still allows landlords to convert long-term rentals to short-term rentals.

Some landlords argue that a more flexible short-term rental market allows them to keep long-term rental prices affordable.

Lucas Jenson, 50, of Williston owns a property in Burlington as a side gig to provide a cushion for his retirement. Years ago, when he couldn’t find a long-term tenant for one of his places, he advertised it on Airbnb.

The revenue he gets from that Airbnb helps lower the rent for his roughly 30 long-time tenants, Jenson said.

Since he’s only looking to supplement his retirement savings, “I don’t feel the need to raise rent for tenants,” Jenson, who charges $950 for a one-bedroom apartment, told VTDigger. “I’m not a greedy person.”

Stories like Jenson’s, however, did not soften Shannon’s opposition.

“Which is better: one person gets a better deal on a rental unit, or two people actually get one unit?” she told VTDigger.

Additionally, Shannon argued, the more units that move from short-term to long-term rentals, the more supply there will be in the housing market, which will drive prices down across the board. the city.

A hidden industry

Even with the exemptions, however, the owner-occupancy requirement would effectively eliminate any short-term rental in the city that consists of an entire single-family home.

But because there’s currently no registration process for short-term rentals, city officials aren’t sure how many listings fall into that category.

The city receives data on its short-term rental landscape from Granicus, a company that monitors the industry in other cities. Burlington gets the Granicus data for free, said Scott Gustin, a senior city planner.

About 80% of Burlington’s short-term rentals are “whole” accommodations, meaning guests do not share a living space with the host, according to Granicus data.

The city also has data showing just over half of its short-term rentals are in single-family homes, while the rest are in multi-family dwellings.

Yet the data does not cross-list the listings, making it unclear how many of these single-family homes are being rented out as whole units.

Short-term rental websites, like Airbnb and Vrbo, collect this information — since they pay the city’s room and meal taxes on behalf of their respective hosts — but don’t share it with Burlington, Burlington said. planning department officials.

Given the opaque portrait of the city’s short-term rental market, landlords worry that an effort to regulate the industry could have unintended consequences.

Julie Marks of the Vermont Short-Term Rental Alliance in Burlington on Friday, November 19, 2021. Photo by Glenn Russell/VTDigger

“They don’t understand the short-term rental landscape in Burlington right now,” said Julie Marks, executive director of the Vermont Short-Term Rental Association. “We are the experts; we did that.

Marks’ organization — which she formed earlier this year when state lawmakers flagged a similar ruling on regulating short-term rentals — has set out to gather its own data to supplement the few publicly available metrics.

Of 42 Burlington short-term rental owners surveyed by Marks, 70% own a unit, she said.

“Generally what we see is a very small-scale operation,” Marks said.

Marks also points to survey responses that suggest 60% of Burlington’s short-term rentals would not convert to long-term rentals if the proposed ordinance were passed.

Regardless of those numbers, Shannon and Mason say the ordinance will prevent future buyers from grabbing available housing in the city and converting it into short-term rentals.

But for landlords like Jenson, the ordinance is another failed bid by councilors to make the town an affordable place to live.

“The city council,” Jenson said, “they make housing more expensive because they make housing cheaper.”

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