by Nancy Lavin, Rhode Island Current
December 7, 2023
The complex web entangling short-term rentals in Rhode Island has a new twist.
Namely, that the licensing process more than half a dozen cities and towns have adopted to regulate Airbnb, VRBO and other short-term rentals, might be breaking state law.
That’s what Michael Marcello thinks. The Tiverton solicitor and former state representative dropped the legal bomb at a Dec. 6 State House hearing before a legislative panel charged with studying the social and economic impacts of short-term rentals.
Short-term rentals listed on online platforms have been explicitly legal since 2021, when the Rhode Island General Assembly passed legislation creating a registry of short-term rental properties. The bill, vetoed by Gov. Dan McKee and subsequently overridden by lawmakers, also stops cities and towns from banning short-term rentals as long as they are published through a hosting platform.
While state law says what municipalities cannot do, it doesn’t give explicit authority to cities and towns to regulate short-term rentals. Therein lies the problem, according to Marcello, who implored lawmakers to clarify the powers of city and town officials through state-enabling legislation.
“Just like with liquor licenses, or for dogs or peddling, there needs to be state-enabling legislation,” Marcello told members of the short-term rental commission. “The Supreme Court has been very clear that cities and towns do not have that authority to issue licenses.”
Thanks to Marcello’s guidance, Tiverton is trying to avoid those murky legal waters by regulating short-term rentals through its zoning code instead, requiring homeowners who want to rent out their homes for short periods of time to obtain a special use-permit, with an accompanying annual inspection.
Tiverton’s ordinance is still being drafted, but nine other cities and towns already have laws on their books, according to the Rhode Island League of Cities and Towns.
Jordan Day, associate director for the league and member of the legislative commission, pointed out that several municipal ordinances use the word “permit” rather than “license.”
But words are just semantics, according to Marcello, who insisted that any local requirements that include fees, inspections or anything beyond a simple registration of short-term rental properties amount to a license.
“We’re fudging the language,” he said. “Towns were forced to be creative because of the lack of clarity.”
Indeed, confusion has permeated debate over short-term rentals: what they are, what problems they are causing (or not) and how to regulate them, if at all. Which is what the 15-member panel, created under 2023 legislation, is charged with studying.
Already four months, and four meetings, into its work, debate continues to uncover new questions and problems with the existing data. Yet the clock is ticking down until the March 15 deadline when the commission’s report of its findings and recommendations is due to the state legislature. Rhode Island League of Cities and Towns Associate Director Jordan Day addresses fellow members of the short-term rental legislative commission at the State House on Wednesday, Dec. 6, 2023. (Michael Salerno/Rhode Island Current)
Newport takes aggressive approach
Critics contest that the explosion of short-term rentals is ruining residential neighborhoods, creating noise and parking constraints along with more serious safety problems, highlighted by the 2021 fatal stabbing of a guest in a Newport Airbnb.
The high-profile incident, combined with the prevalence of short-term rentals in the City-by-the-sea, prompted Newport officials to take an aggressive regulatory stance. Newport began tracking short-term rentals in 2017 (then referred to as “guest houses”). This year, it’s doubled down on record-keeping and enforcement, passing a series of ordinances and resolutions that increase the annual registration fee from $100 to $1,000, or $500 for an owner-occupied property, while hiring its first full-time enforcement officer to crack down on violators. Last year, the Newport City Council also banned short-term rentals in residential neighborhoods unless the homeowner also was staying there.
The city solicitor was consulted on all new and updated ordinance changes regarding short-term rentals, said Tom Shevlin, a spokesperson for the city of Newport.
This year alone, the city has recorded 30 violations among short-term rental properties, with fines accruing at $1,000 a day, said Mayor Xay Khamsyvoravong.
And the work is just beginning, as the city tries to get a better handle on the breadth of short-term rentals across its boundaries. While the state registry shows nearly 550 short-term rental properties in Newport, the city-operated registry has 364, and Khamsyvoravong thinks the real number is closer to 700, based on reviews of third-party data. The state’s registry of short-term rentals shows different numbers than what has been collected at the local level. (Courtesy Rhode Island League of Cities and Towns)
While most striking in Newport, discrepancies between state and local rental numbers are true in every city or town that has its own registry separate from the state. The state registry data also doesn’t match the information on AirDNA, a data-scraping tool that analyzes short-term rental information based on public platform postings.
No one seems to know why the numbers don’t align, but they agree it’s a problem.
Threatening the character of neighborhoods
Equally troubling is the data, or lack of, surrounding neighborhood complaints about short-term rental properties. Anecdotally, stories abound about short-term rentals being rented by the day purely for partying purposes, with cars eating up street parking and noise lasting through the night. But quantifying, and qualifying, the severity of the problem has proven difficult.
When Greer Gagnier, executive director for the Rhode Island Short Term Rental Association, called Tiverton’s police, building and zoning departments, she found no record of violations among short-term rentals, she said on Thursday. Greer Gagnier, Rhode Island Short-Term Rental Association executive director, is one of 15 members of a legislative panel charged with studying short-term rentals. (Michael Salerno/Rhode Island Current)
Tiverton Town Administrator Chris Cotta in response said the complaints aren’t going to those departments. Instead, it’s Cotta and the town council who are being bombarded with calls, he said
Rep. Lauren Carson, a Newport Democrat and chairwoman of the commission, echoed Cotta’s sentiment in an impassioned defense of the legitimacy of the problem.
“The House of Representatives would not have created this study commission if only five people in one community had problems with short-term rentals,” she said, her voice growing louder as she continued. “We’re here because it’s an issue across our communities. I would not be wasting my time here if there wasn’t something going on.”
Vacation rentals might not seem like a sensitive topic, but the undercurrent cuts deep into the heart of the state’s hottest debates: the housing crisis, property rights and the tension between local and state authority, among them.
It’s also brought up ancillary, and at times surprising, issues.
Just ask Kristen Adamo, president and CEO of the Providence Warwick Convention & Visitors Bureau and a member of the study commission.
“When I think of short-term rentals, I think of hotel tax revenue,” Adamo said Thursday. “I would never have thought about water usage or school aid being in this scope.”
Yet short-term renters use more water than permanent residents, which has put constraints on Jametown’s limited well water, according to Town Administrator Ed Mello. Narragansett’s declining school population, which Town Council President Ewa Dzwierzynski blamed in part on the housing shortage exacerbated by short-term rentals, means a diminishing town’s share of state school aid. Narragansett Town Council President Ewa Dzwierzynski addresses the short-term rental study commission at the State House on Wednesday, Dec. 6, 2023. (Michael Salerno/Rhode Island Current)
Dzwierzynski’s point further stoked flames of controversy, with short-term rental owners and business representatives saying it was unfair to blame the state housing crisis on Airbnb.
When I think of short-term rentals, I think of hotel tax revenue. I would never have thought about water usage or school aid being in this scope.
– Kristen Adamo, president and CEO of the Providence Warwick Convention & Visitors Bureau and a member of the study commission
“It’s an easy target,” David Salvatore, vice president of public affairs for the Rhode Island Association of Realtors, said. “We use safety, housing availability and other terms to scare people from using their homes for private property and adding to Rhode Island’s economy. Before we start painting everybody with the same brush, we should look at the data.”
Gagnier agreed. Nowhere in HousingWorks RI’s 2023 Housing Fact Book, for example, are short-term rentals mentioned as a cause for the housing crisis, she said in comments after the meeting.
Given the scope of the work, Gagnier isn’t optimistic the panel will find resolution in the next three months before its report is due.
Day, however, pointed to at least a few short-term fixes. At the top of her list: the state-enabling legislation Marcello said was needed to more clearly authorize cities and towns to regulate short-term rentals.
“At some point, there will be a challenge without this legislation and cities and towns will be in trouble,” Marcello said.
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