Short-term rental ordinance comes into effect in the city of Boston

United States: People renting out their homes on platforms such as Airbnb or HomeAway in the city of Boston will now have to register with city authorities.

This coincides with news that a new ordinance to regulate short-term housing rentals in Boston went into effect on 1 January. In addition to the registration requirement, the ordinance also bans people from listing short-term rentals in units that are known as so-called “investor units”.

Boston city councillor Michelle Wu told wbur: “It effectively closes corporate loopholes that had existed when companies were taking up entire buildings, displacing all the tenants and operating de facto hotels where hotels would be illegal under the zoning code.”

The city believes investor units have siphoned off much-needed housing in Boston. Wu, who has led efforts to regulate short-term rentals, said there was “anywhere from 2,500 to 4,000 units that could be returned to the residential housing stock”.

She said: “That would really have an impact in relieving pressure on housing prices and increasing the supply,” Wu said.

The ordinance, which was approved last June, restricts people from renting out units they live in and own on a short-term basis. This includes a room within a unit, an entire unit or an adjacent unit in a two- or three-family home.

Annual registration fees for such short-term rentals are also necessary and any hosts who do not comply with the rules will face strict fines.

The city ordinance is only partially in place, however, as some key parts of it are being held up in court due to a lawsuit filed by Airbnb.

The company took issue with a requirement for short-term rental companies to share data with the city and a $300-per-night fine for each illegal listing they host. In its lawsuit, Airbnb called the provisions “draconian”, saying they violate state and federal laws, so for now the enforcement of those fines and data-sharing rules are on hold.

The partial implementation of Boston’s short-term rental rules begins just after major legislative action was taken at the state level.

Last week, governor Charlie Baker signed state legislation which taxes and regulates short-term rentals. Wu said the bill, which will also create a state-wide registry and database, will bolster what the city is trying to do with data-sharing rules on a local scale.

Boston City mayor Marty Walsh also praised the state bill.

He said: “With this state legislation, Boston looks forward to implementing our ordinance on 1 January and adopting additional complementary tools provided by the state.”

The state bill comes into effect on 1 July and it will give cities and towns the ability to impose their own regulations on short-term rentals — or ban them outright.