Carson: Short-term rental regulations aim to “maintain the integrity of our neighborhoods”

A packed House Municipality and Housing Committee hearing at the State House overflowed into the Bell Room Thursday night as property owners made sure their voices are heard on a series of bills that could change how short term rentals are managed in Rhode Island. 

Around 400 pieces of written testimony were submitted, many dealing with properties available on host sites such as Airbnb and Vrbo.

“Never let the facts get in the way of good legislation,” Richard Gerston, 64, a short-term rental property owner in Narragansett, told the Rhode Island Current. “It allows me to spend money in Narragansett that I wouldn’t have otherwise. It allows people to visit and also spend their money in Narragansett.”

The two main bills in question, H6096 and H6097, were introduced by Rep. Lauren H. Carson, a Newport Democrat, and crafted in conjunction with the Rhode Island Hospitality Association in response to the high rate of short-term rentals in Newport.

H6096 would allow municipalities to charge a 2% impact fee on short term rentals through sites like Airbnb or Vrbo to fund one time infrastructure projects, H6097 would allow municipalities to ban such rentals within their borders.

“We really want to maintain the integrity of our neighborhoods,” she said, during her testimony. 

Newport has been heavily affected by the short term rental boom. According to Airdna, a market analysis organization, there are currently 766 active rentals, giving property owners median revenues of $4,410 per reservation, with 82% of those classified as “entire homes.”

There are only 338 registered short-term rentals in Newport according to data from the Department of Business Regulation. 

“The best fit for Newport may not be the best fit for Jamestown which may not be the best fit for Providence,” Carson said. “That is my intention here, to give more authority to our municipalities.”

Impacts of short-term rentals

Before the hearing, the Rhode Island Coalition of Housing Providers circulated an email calling on short-term rental owners to testify — in person and in writing — against the legislation.

“These bills could destroy the short term rental market,” it read. “If you rent for under 30 days you are under attack!”

Other bills addressing the issue included a bill to prohibit accessory dwelling units to be used for short term rentals, one to allow cities and towns to require all short term rental property owners notify residences within 1,000 feet of a property, and another which would classify registered properties as Class 2, allowing cities and towns to levy new taxes on them.

Before launching into testimony on her bills, Carson addressed what she said was misinformation on the legislation based on exaggeration.

“I think it’s been clear in the last 24 hours that there’s a lot of discussion around the bills,” she said. “I am concerned about some of the misinformation around the bills.”  

A major concern among proponents of the bills is that the rentals take housing stock for long term residents off market, raising housing prices across the board and contributing to a long standing housing crisis.

A recent report from the National Low Income Housing Coalition concluded Rhode Island faces a shortage of more than 24,000 affordable homes to house a total of 51,596 extremely-low-income renters — defined as those making less than 30% above the Federal Poverty Line.

“The reality is, the more our properties that are turned into third party rentals,” Carson said, “the less permanent housing” available.

According to data from the Department of Business Regulation, there are 3,630 short term rental properties in the state. “That’s 3,600 properties off the market,” Carson added.

The supply crisis has made the Providence Metro Area (including Fall River and New Bedford) the fifth highest year-over-year rate of rental cost increases in the country at 23.8%, according to the HousingWorks RI 2022 Housing Factbook. 

“I have heard a lot of folks who live in places like Aquidneck Island and South County who feel they have been pushed out of housing,” Claudia Wack, 31, a Providence affordable housing attorney at the hearing in favor of the regulations, said. “I’ve heard horror stories about people who go to live in affordable campgrounds because they can’t find housing over the summer.”

Yet for Gerston, the arguments simplify a far more nuanced topic.

“It’s complicated and in some jurisdictions [short term rentals] may contribute [to housing price increases],” he said. “There isn’t a one size fits all solution.”

He said he understood there is an affordable housing crisis in the state and perhaps a tax – passed onto the consumer – on short term rentals may be helpful in alleviating it.

“I’d like to see more affordable housing,” he said. “But I’d rather the legislation be done using facts, not hyperbole.”