Short-term housing rental services like Airbnb have been disrupting the hotel industry and causing headaches for local officials concerned with keeping housing affordable for renters. Beacon Hill is considering ways to level the playing field.
The popularity of short-term rental websites means they aren't going away, so state lawmakers need to find a way to tax and regulate the industry while preventing affordable long-term units from being converted to lucrative short-term stay overs.
"And we also see listing of dilapidated buildings in Chinatown advertised as "cash cow" for $1.3 million dollars or $1.9 million dollars. So this phenomenon is really driving an unreal sale price of buildings and displacing tenants," Karen Chen from the Chinese Progressive Association said at a State House hearing Tuesday.
"In Chinatown, we find almost 100 units of short-term rental. And we know of at least, in a small neighborhood like Chinatown, at least six buildings turned into exclusively for short-term rental," Chen said.
The hotel industry wants their competition to be taxed at the same rate hotels and motels are, and Airbnb, the biggest player in the burgeoning industry, agrees that such a move makes sense.
Beacon Hill has been struggling with how best to regulate the short-term rental industry. One plan, from North End Rep. Aaron Michlewitz would tax rental units at different rates according to how frequently the unit is rented out. Under Michlewitz's bill, the more commercial a rentee's operation is, the more the taxes and regulations will resemble those applied to the hotel industry.
But taking a bite of home sharing profits to benefit state coffers could mean disrupting the state's age-old single-family rental industry, which is a particularly important part of the economy in places like Cape Cod and the Berkshires. Realtors worry the bill would overburden homeowners that rent out cottages and cabins for a week or two a time through the summer season. Home renters, they argue, aren't equipped to meet the standards of tax collections and regulation that full-time Airbnb-ers would be subjected to under the bill.
"Just a few weeks of rentals would subject a homeowner to registering and filing sales tax receipts with the department of revenue no matter how little rent is collected. Homeowners would be expected to comply with onerous business regulations and administrative burdens that were never intended for the average person," Stephen Medeiros, a vice president with the Massachusetts Association of Realtors said. The higher burden on homeowners could drive those units out of the market, the realtors warned.
