NH Senate panel gets attentive ear on short-term rental bill

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Jim Luther has a story about short-term rentals, about when he saw a bus stop at a rental that technically seats 22 people across from his cabin in Sunapee.

The same goes for Deb Sullivan in Gilford, who watched vacationers light fire pits on their porches.

But Krista Karnan, co-chair of the White Mountains Board of Realtors, also has a story. After the death of his mother, his father was able to rent a house to short-term tenants to remain solvent during his bereavement. “Without the short-term rentals, my dad would have gone bankrupt or lost his house,” she said.

All were testifying at a marathon hearing hosted by the NH Senate Commerce Committee on Senate Bill 249, a measure that would regulate short-term rentals.

The bill’s sponsor is the committee’s chairman, Senator Harold French, R-Franklin, who introduced a bill in reaction to numerous local ordinances that attempted to regulate and limit short-term rentals in such a way that they actually prohibit them. But after being taken to the ears by the municipalities and the inhabitants who were fed up with the rowdy holidaymakers, he realized that “his initial bill was problematic” and proposed a “new and improved version”.

His proposed amendment gives cities more rights to inspect and even charge a “reasonable” fee to do so. “It balances the rights of private property owners with a city’s need to regulate health and safety.”

Short-term rentals aren’t new, but online platforms like Airbnb have grown in popularity, especially in the Lake District, White Mountains, and Coastline. A study published last October estimated that these rentals had an economic impact of at least $45 million on the Mount Washington region alone.

And now that third-party platforms pay the room and meal tax directly, short-term rentals account for about $20 million in revenue per year, 30% of which goes to cities and towns.

But since these properties are residential in nature, they are not subject to the regulations that most hotels and hostels have to deal with. Cities therefore develop various regulations.

Laconia, for example, limits short-term rentals occupied by non-owners to two zones, defining “occupied” as 150 days per year to allow for snowbirds. There are exemptions for people who have rented units for a long time as well as for others, but only if it is for the benefit of the community. Laconia also charges a $250 listing fee and limits occupancy to nine people per 1,400 square feet.

“We’re just trying to put guardrails on it,” Mayor Andrew Hosmer said.

“We would not allow hotels and motels in residential areas,” Laconia City Manager Scott Myers added. “What it really stops is investors buying homes and using them for Airbnb.”

Conway’s ordinance is even stricter, effectively banning short-term rentals in residential areas.

But co-sponsor Sen. William Gannon, R-Sandown, argued the cities went too far, calling some of Conway’s rules “finicky.” He said, “I’m very concerned that you’re going to over-regulate, to limit someone’s enjoyment of their home. I’m afraid the cities are going crazy.

The legislation has strong support from the NH Association of Realtors.

“It doesn’t take away the regulatory power of municipalities,” said Chris Norwood, chair of the association’s policy committee. “We definitely have short-term rental issues, but some bad actors don’t give the city the right to ban them.”

Landlords want to preserve their property rights,” said David Cavanaugh, president of the Mt. Washington Valley Association for Responsible Vacation Rentals. “Towns like Conway are built on vacationers.”

He also said short-term rentals make up 5% of the area’s housing stock, not 20 or 30% like in other places, like Stowe, Vt. He argued that the bill, particularly the proposed amendment, “seems to strike a happy medium, a controlled rental environment.

“I think it’s a reasonable compromise,” added Nathan Fennessy, the association’s lawyer. Vacation rentals aren’t new, he says. “What’s new is municipalities reinterpreting their zoning ordinance to ban them.”

However, Heidi Milbrand, president of the New Hampshire Bed and Breakfast Association, saw nothing happy or reasonable.

“It looks like you wanted to bankrupt us,” she said. She said investors were buying “cheap buildings to rent out unattended”.

These articles are shared by partners of The Granite State News Collaborative. For more information, visit collaborativenh.org.

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