WESTFIELD – The Senate voted last Wednesday to pass bill S.2381: An Act regulating and insuring short-term rentals, with a vote of 31-6. The bill requires owners of short-term rentals to obtain a certificate of registration from the state Department of Revenue, and requires a 5% excise tax on the total amount on each occupancy. Cities and towns may also impose a local excise tax.
In a press release, Sen. Eric P. Lesser (D-Longmeadow) stated his reasons for supporting the bill.
“This bill levels the playing field so that all those in our hospitality industry, from motels to bed-and-breakfasts and others are treated equally and fairly. Importantly, this law allows for local rules, local zoning, to give flexibility to different communities that have different populations and different needs. Many cities and towns, particularly in Western Mass, experience seasonal tourism due to events like the Big E, Tanglewood and Enshrinement at the Basketball Hall of Fame, and this cyclical economy supports thousands of jobs in the hospitality sector,” said Lesser.
The legislation would generate an estimated $34.5 million and $25.5 million in state and local revenues, respectively, based on the most recent Senate Ways and Means Fiscal Impact Report. The expanded tax base will automatically apply to all 175-plus cities and towns that have already adopted the local room occupancy excise to date, according to Lesser.
Sen. Don Humason (R-Westfield) (WNG File Photo)
Sen. Donald F. Humason, Jr (R-Westfield) was one of the six state senators who voted against the bill, describing it as “overreach.”
“This bill, as much as we talk about Airbnb, is really creating a new tax, and in the Senate, a high one,” Humason said. He said some people rent rooms to help pay their property taxes, noting that in Governor Charlie Baker’s original bill, he had included 150 days exemption from the regulations. “I thought that was too much,” Humason added.
“I offered an amendment for 21 days exemption, to differentiate between the casual renter, the Mom & Pop, and someone who bought property just for rentals, commercial (owners). Those folks using their properties like that should be subject to fire code, inspections, etc.,” Humason said.
“I understand there was a problem. I was trying to fix that problem without making it a fundraiser for the Commonwealth,” Humason said, adding that he was looking for a happy medium between nothing and a lot of regulations.
Humason’s amendment was defeated 27 to 11. “I got one-third,” he said. “I had hoped it would have moderated it to something I could support, for those who rent a couple of weeks a year, or a couple of weeks in the summer,” he said, adding, “In the Senate version, even for a day, (you’re) categorized as a hotel chain – paying tax on day one.”
He said he gave the example of a college town like Westfield, where a family or prospective student might rent to get the flavor of a school. “It’s different for the casual renter who lives in the house,” he added.
Bill S.2381 was sent to a conference committee, where it will now be negotiated with House members before a final version is sent to the governor’s desk.
Humason said he hopes, in conference, the bill would moderate from the Senate version, which he called “pretty extreme. All of a sudden you’re a hotel chain. Anybody who rents for any reason – you’re a Holiday Inn.”
Humason also said he fears that the bill in its present form is going to drive people underground, where he said the rentals already are. “This bill won’t change it,” Humason said, adding that a lot of people who are renting out rooms will find it onerous.
The debate in the state house mirrors one currently in the Westfield City Council, where residents spoke out last month about an Airbnb rental on Overlook Drive that was attracting groups of people at night, causing them concern. The owner pulled the listing shortly after the residents spoke out.
At-large City Councilor David Flaherty
At the March 15 City Council meeting, Ward 4 Councilor Michael Burns, who covers Overlook Drive, and At-large Councilor David Flaherty made a motion requesting the City Council to investigate and recommend zoning ordinances for short-term residential rentals. The motion was referred to Zoning, Planning and Development (ZPD) sub-committee, and to City Planner Jay Vinskey.
“It was discussed at ZPD last week. I have since met with the Assistant City Solicitor to talk about the points Council would like to see addressed/regulated, and how best to proceed,” Vinskey said.
Flaherty, who chairs the ZPD committee, said the committee met last week and came up with the following goals that were sent to Legal and the City Planner. They are going to start working on zoning ordinances and get back to us next month. One of the goals is to comply with the state laws and pay appropriate taxes.
Flaherty said his committee outlined the following points:
Short-term means less than 30 consecutive days.
Property would have to register periodically with a small processing or inspection fee.
Property must comply with fire safety and other safety rules typical for rooming/boarding houses or bed-and-breakfasts.
Owner must collect state and local accommodations taxes as required by the new state law.
Off-street parking must be available – space for one car per rented room.
Owner must keep log of renters and make it available to law enforcement in similar fashion as hotels or motels.
Zoning goals include the following:
OWNER OCCUPIED OR ADJACENT OWNER: Allowed in all residential zones for daily rentals.
INVESTOR OWNED WITHOUT OWNER ONSITE OR ADJACENT: Not allowed in any zone.
SNOWBIRDS OR SIMILAR WHO RENT FOR 3 MONTHS OR LESS PER YEAR: Allow weekly rentals if there is a local management company or responsible party taking care of property.
“We want to encourage long-term rentals and relationship for neighbors,” Flaherty said.
