Rentals, regulation, and Airbnb


Tisbury selectmen made a good call last week in tabling the special warrant article calling for a new bylaw regulating rental housing. The original idea requiring town registration for all rental units is sound and timely, and the problems it addresses will worsen if not addressed. But the proposed bylaw’s fee structure, its timing related to pending state initiatives, and the inadequacy of prior public discussion conspired to doom this worthwhile initiative before it could come in front of voters this time around.

As framed by town officials, the regulation would have focused on public health and safety concerns, surfaced in admirable detail by the town’s fire chief, board of health agent, and building and zoning inspector. Undoubtedly, as Selectwoman Loberg acknowledged, town officials encounter too many “nightmares” among yearly, seasonal, and short-term rental units in Vineyard Haven.

It’s the town’s duty to set minimal standards, and requiring registration and inspections is a reasonable approach. It follows that there are costs attached, as there are with other, similar town building and occupancy permits. Setting fees for those registering rental properties is good management, not a money grab, as some have complained. And since the town should set standards, inspect, and register rental units under any circumstance, charging users rather than folding the costs into the general town budget makes sense to us.

While it’s unfortunate that this effort wasn’t more effectively managed leading up to the final warrant drafts, health and safety regulation, inspections, and associated fees will undoubtedly be back on the town’s agenda shortly. In Tisbury and elsewhere on the Island, these common-sense measures should stand on their own, distinct from the the pending state initiative designed to capture additional revenue for the commonwealth by taxing short-term rental receipts from virtual marketplace property services such as Airbnb.

In Massachusetts and on the Vineyard in particular, because of our resort economy, Airbnb poses a more complicated set of issues. The nine-year-old private company, worth an estimated $31 billion (italics added for emphasis; the company has just reported its first-ever profit), has become a force of nature in destination-location real estate markets. It develops software which enables property owners to easily find and accommodate short-term renters. This can of course generate important revenue for year-round and seasonal Islanders by renting out underutilized assets. But it also raises serious questions.

Via a back-of-the-envelope calculation based on current offerings on its website, there are currently some 600 Vineyard properties in the searchable Airbnb inventory. It’s not clear whether this supply of short-stay lodgings brings in new visitors or if it competes with hotels and inns, which would require a level business-cost playing field. And it’s not clear if the prospect of by-the-night rentals of some of the Island’s seasonal homes yields enough of a premium to take them them off the conventional (and already depleted) rental home inventory.

Murkier still is the reporting, regulating, and revenue-generating status of the Island’s Airbnb room inventory. In much the same way that ride-sharing company Uber considers its drivers to be independent contractors and their vehicles’ maintenance, safety, registration, and insurance the driver’s responsibility, Airbnb makes clear that host property owners are similarly responsible for the properties they rent out.

In addition to various insurance products Airbnb makes available to property owners (standard homeowner insurance doesn’t apply), here’s the list of regulatory steps the company’s website directs Boston hosts to check in with (not Airbnb’s responsibility) in order to operate in compliance with local authorities and agencies: business registration; zoning (and presumably building inspector) review; rental registration; lodging house licensing; tax collection authorities; and homeowner and road association-type entities.

A great many Vineyard property owners — some our year-round and seasonal neighbors, some investors — will have a legitimate and perhaps even an essential interest in earning revenue from the short-term rentals which the Airbnb virtual marketplace allows. The issue of revenue generation that the state is pursuing at the moment is important — especially because the visitor-related revenue is so important on Martha’s Vineyard — but it is only one part of a complicated planning and regulatory process all six Island towns will need to cope with soon.

Airbnb’s business model requires growth and location prominence, and it is all in supporting and lobbying for the interests of its hosts. As its website makes clear, “We are committed to working with local officials to help them understand how Airbnb benefits our community. Where needed, we will continue to advocate for changes that will allow regular people to rent out their own homes.” In the face of the inevitable disruptive pressure that challenges like this bring to bear on the Vineyard’s lodging and housing markets, our health and safety standards and our community fabric require that each town do the hard work, including the necessary public processes, to get this right.