Short Term Rental Crisis

One of the issues we’ve been dealing with in my small town that has been causing an increasing number of problems: Short Term Rentals. Also known as AirBnB’s (and VRBO’s), it has been a growing phenomenon here in some parts of New Hampshire. Where I live - the Lakes Region - it is a three-season tourist/recreation destination with numerous lakes and ponds for swimming and boating and fishing, hiking trails, camping areas, and other amenities during summer; colorful foliage for fall; Alpine and Nordic skiing, snowshoeing, snowmobiling, and ice fishing in winter. All of this has driven demand for vacation rentals and this has in turn driven growth in Short Term Rentals.

Some are vacation homes owned by private parties who rent out their places when they aren’t using them. That’s nothing new. Others rent out their own homes for a couple of weeks or so while they are away on vacations of their own. Both sets of these owners rent their properties to help pay their property taxes, their mortgages, or both. (I have friends here in town that do this and neither I or their neighbors have any problems with it.)

But there is another group of folks offering Short Term Rentals who have been driving up the cost of housing while at the same time decreasing the supply of housing for families: commercial operators.

Most of them are corporations, large or small. When properties come up for sale they offer above asking price and will pay cash. In some cases they offer well above asking price. (I have seen a few homes going for twice the asking price - or more - when two or more corporations get into a bidding war over the property.) Most of them have no connection to our town. Others have no connections to New Hampshire at all. They don’t care that their purchases remove yet another home from the market that won’t be housing a family. Some don’t seem to care if there are issues with neighbors. (One couple I am familiar with have had to deal with three neighboring Short Term Rentals that appear to be used as party houses weekend after weekend after weekend. My friends couldn’t sleep for all the noise they made. The owners didn’t seem to care.)

Our town has been working to rein in some of these commercial operators, ensuring they take the necessary actions to preserve the quality of life in the neighborhoods where they operate, don’t allow too many people into the places they rent (20 people staying in a place that can accommodate 8 at best in turn causing the septic system to be overloaded), prevent on-street parking overnight that blocks the road, and to deal with a whole host of other issues that have been brought up by those living next to some of these Short Term Rentals.

Some in our town would like to see the commercial Short Term Rentals disappear entirely, something that isn’t going to happen. Some towns have imposed draconian regulations, with at least one of them being sued by Short Term Rental owners because they see those regulations as a ‘taking’ under the Fifth Amendment, preventing them from using their property as they had previously. Non-regulation is also not an answer since hotels, inns, and bed-and-breakfasts are all regulated and a New Hampshire Supreme Court decision (Working Stiffs LLC vs Portsmouth) defined Short Term Rentals, particularly commercially owned/operated Short Term Rentals, as hotels.

Most of the Short Term Rentals haven’t been causing any problems, but our town wants to make sure to stay ahead of any potential problems by getting some regulations in place. Most of those regulations will be aimed at the commercial operators, not the owner-occupied operators. Only time will tell if the town is successful in striking the right balance.

Note: I had my ‘J. Geils Band My Angel Is A Centerfold’ moment when I saw The Manse, the former Official Weekend Pundit Residence, listed for rent on AirBnB….for $2600 a week.