Vacation is over: New regs tamp down Narragansett Airbnbs as RI studies short-term rentals
NARRAGANSETT – The summer tourist season here began with a cloud hanging over property owners like Joseph Volpe, who rent a room, apartment or house on websites like Airbnb and VRBO.
One of the most aggressive local ordinances in Rhode Island to curtail the short-term rental of homes is set to go into effect here in September, so this may be the last summer Volpe – who is also Narragansett Fire Department captain – offers his four-bedroom house online for use by visitors.
"It is not going to create affordable housing. It is not going to help the economy," Volpe said last week. "People like myself, if they can't rent short term or feel that the restriction is limiting them too much, they are just going to rent to college students."
Conflict over short-term online vacation rentals has risen in Rhode Island – and across the country – in parallel with the exploding cost of housing in recent years.
While the roots of the housing crisis clearly run far deeper, people buying houses to turn them into high-turnover vacation rentals are easy targets for locals wondering how their neighborhood got so expensive.
Is the sale and conversion of homes from year-round use to vacation rental contributing to the shortage of apartments and houses on the market?
Yes, according to most observers, including state Housing Secretary Stefan Pryor at a recent State House hearing.
Will cracking down on vacation rentals actually make the problem better or worse?
That's unclear.
How are short-term rentals regulated in Rhode Island?
Three years ago, the General Assembly legalized what had been a totally unregulated short-term rental market operating in a gray area of land use and property law.
But the statewide 2021 law didn't resolve the underlying discomfort many residents have with short-term rentals, prompting their local officials to try to tackle the matter themselves.
Tourist-centric Newport led the way in identifying and then limiting short-term rentals. That city's current ordinance bans short-term rentals in residential neighborhoods unless the owner lives on site.
Cities and towns from Providence, Westerly, Johnston, Middletown, Portsmouth, East Providence and Warwick followed – nine communities by 2022 and more since – with some form of restrictions, including permitting requirements and bans in certain neighborhoods.
Cumberland, where demand for vacation homes is minimal, shocked many last year when it banned short-term rentals outright, townwide, with no exceptions and argued that the 2022 state Airbnb law does not prevent them from doing so.
But the new law in Narragansett, a community synonymous with cabana life and with by far the most registered short-term rentals in the state, is now in the spotlight.
It will prohibit any rental stay shorter than a week.
Volpe, who says he can live with and even support most of the rest of the new rules, says this minimum stay is untenable in all but the summer high season.
At a hearing on the ordinance in March, George Nonis, president of property owners group Narragansett 2100, called it a move to make the town an "elitist, exclusionary, non-welcoming community."
What about the General Assembly?
Like last year, and the year before, state lawmakers have introduced a number of bills on each side of the issue.
And like last year, there's no sign the most significant ones will go anywhere.
Instead, the House is extending for another year the work of a study commission chaired by Newport Democratic Rep. Lauren Carson on short-term rentals.
Carson said she is working on improving the state short-term rental registry and combining it with local registries, studying how the building code treats vacation rentals and the zoning code.
"I think we've waited a long time to deal with it," Carson said about the issue last week. "I think the municipalities have acted and they're out of step with the state."
House Speaker K. Joseph Shekarchi: "There's some people who use it to supplement their income to stay in their home, and there's some people who treat it as a business, and there's some people who want to tax it a different way, and there's some people who want to regulate it, and some people want to change the fire codes," he said Wednesday. "It's complicated."
This year's list of General Assembly bills dealing directly with short-term rentals statewide includes:
H8183 would charge state hotel tax to full house rentals and use the money for "municipal infrastructure improvements, riverine and coastal resiliency and housing." A similar budget amendment from Gov. Dan McKee would close the "loophole" that charges hotel tax to room rentals and not full homes, but use the proceeds for state homeless services. H8057 would just repeal the language in the law that allows the full house loophole.
H8182 would prohibit rental platforms from listing any properties that do not have a valid state registration. It would also require landlords to disclose on their state registration if they are owner-occupied. And allow communities to enact ordinances to carry out the purposes of the municipal zoning laws.
H7465 and S2187 would also prohibit platforms from listing any properties that don't have a valid registration number.
S2018 would let cities and towns tax non-owner-occupied short term rentals as commercial property.
S2020 would let cities and towns charge a 2% fee on payments for any residential rental of less than 31 days.
S2411 would get rid of the "municipal preemption" created in 2021 that, Cumberland notwithstanding, bars cities and towns from outright banning short-term rentals.
The college student question
Especially in Narragansett, homes that are rented to vacationers in the summer are often rented to college students when it gets cold, and H7382 from Cranston Democratic Rep. Jaquelyn Baginski targets a long-running dispute over that part of the market.
After a series of court battles over the issue, the Narragansett Town Council last year voted to reduce the number of unrelated people who can live together in the town from four to three in an effort to encourage single-family use of houses instead of occupancy by students from the nearby University of Rhode Island.
Baginski's bill, which was passed out of committee Thursday for a full House vote this week, would allow each dwelling in the state to have "one person per bedroom," up to five total unrelated people.
All in the family? Why these RIers support letting more unrelated people live together
A House committee hearing on the bill drew several hundred people to submit written testimony in support – almost all of them residents, visitors or property owners in Narragansett. (The volume of testimony, closer to the interest level in abortion or gun bills, was so large that 36 people whose first names began with the letter C alone wrote in.)
Among them, landlord and state Commerce Corporation Board member Carol O'Donnell, who wrote that "we need to house more individuals and families, not exclude them with laws and regulations."
Dialing down Airbnbs
Can discouraging students, short-stay vacationers and real estate investors reverse a plummeting year-round population and bring back 20th century-style single-family affordability?
Narragansett Town Council President Ewa Dzwierzynski says that's the goal and sees the limits on short-term rentals in Newport and Nantucket as positive models for Narragansett.
The ordinance that goes into effect Sept. 1 was written with the help of Granicus, a company that provides services and software to enforce short-term rental rules.
It will cap short-term rentals at 1,100 the year starting Sept. 1, 1,000 the following year and 900 the third year, with permits issued first-come, first served. (According to the state's short-term rental database, there are 1,158 active rentals in Narragansett now, more than 20% of those registered statewide.)
To rent on an online platform, property owners will need to clear fire and building code inspections and pay permit and permit application fees: $425 combined for town residents and double for outsiders.
The requirements to get a rental permit are strict and may not be met by many smaller, older cottages that have been rented for generations.
Bedrooms must be at least 70 square feet to rent, or 120 square feet if used by two people
Each rental needs one off-street parking space per bedroom and a minimum of two, even for a one bedroom
Each parking space must be 20 feet long and 10 feet wide and cannot be grassy. (For properties of five bedrooms or more, each off-street parking space must be 300 square feet, or a minimum of 90,000 square feet of parking lot.)
Short-term rentals cannot host "weddings, banquets, bachelor parties, bachelorette parties or corporate events"
Storage sheds, trailers, garages, tents or tree houses cannot be used as part of the rental
Minor violations start at $250 per offense and climb to $1,000 (the fine for major violations) starting at the third offense
The town this month went out to bid for a private vendor to enforce the short-term rental ordinance. The firm selected will search online hosting platforms, monitor a round-the-clock complaint hotline, create a map of listings in town and generally track properties for compliance, according to the RFP.
Dzwierzynski said the firm will be paid from permit fees and Granicus is expected to bid.
If the new rules prompt owners to rent to college students year-round instead of to vacationers, is that a win for the town?
"I think so," Dzwierzynski said. "I think students contribute more to the community being here during the school year, or even year round if that's what it ends up being, than transient visitors where you have strangers coming in and out of neighborhoods."
Is Narragansett built out?
In addition to the short term-rental and student housing battles, Narragansett has also banned duplexes and pushed back against Shekarchi's efforts to make it easier to build more homes. And unlike Newport, Narragansett has few hotels.
Is the town doing anything to encourage new construction of new homes or hotel rooms?
"I think new construction, where there's an opportunity, yeah that's great, but Narragansett is pretty much built out," she said.
Like the limits on the number of unrelated people who can share a house, Narragansett's short-term rental ordinance could end up in court.
Nonis, of Narragansett 2100, said his organization is waiting until the current General Assembly session concludes before deciding on any legal challenge.
This article originally appeared on The Providence Journal: Airbnbs in Narragansett are in danger under new regs. What to know
