Burlington City Council passes new rules limiting short-term rentals

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  • A local Airbnb offer

Burlington City Council voted on Tuesday to clamp down on short-term rentals in a bid to make more units available for people who need permanent housing.

Councilors voted 8-4 for the new rules, which took two years to develop. The vote came after two failed amendments and a lengthy discussion about how strictly the order should be issued.

“It’s not exactly what I wanted, not exactly what a lot of us wanted,” said Councilwoman Zoraya Hightower (P-Ward 1), who voted for the ordinance.

“That’s what most of us have supported at some point this year,” Hightower said. “I think moving forward with something that most of us were ready to support even a month ago is much better than not moving forward with anything at all.”

The ordinance limits where and how landlords can use their extra space for short-term rentals. Those who live in the house they own can rent rooms or leave temporarily and rent the whole house. Owners can rent up to three single rooms at a time.

Seasonal homes that are not habitable year-round are not included in the limits. And landlords can work around some of the restrictions: They can use multiple units as short-term rentals, as long as they rent an equal number to someone who receives a voucher for Section 8, the federal government program that helps low income people. income, elderly and disabled. Units available for low-income tenants must be in addition to those already required by Burlington’s inclusive zoning rules.

Proponents said the ordinance will free up some of the homes that are now being used by vacationers and allow more families to find permanent housing in Burlington, which has a rental vacancy rate of just 1 or 2% – well below of the 5% envisaged. in good health, according to the city.

Councilwoman Joan Shannon (D-South District), a real estate agent, said in an interview before the meeting that she worked with people who wanted to move to the area but couldn’t.

“They come here to do jobs that we need, they come to work in the hospital or at the university, and there’s nothing to rent or buy,” she said.

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Opponents of the ordinance said restaurants and other local businesses depend on the traffic that short-term rentals, which are often cheaper than hotels, bring to town. And they said cutting rents so drastically would hurt landlords who relied on the extra income they got from it.

“Tonight’s outcome is devastating for many Burlington homeowners, service workers and businesses who rely on the short-term rental economy,” said Julie Marks, executive director of the Vermont Short-Term Rental Alliance. “The decision to ban short-term rentals on one’s own property in a single unit, such as an ADU (accessory dwelling), is unprecedented in Vermont and, barring a veto from the mayor, would be one of the most restrictive policies against short-term rentals in the entire United States.”

Owners of short-term rentals have told City Council that if they cannot use their property for short-term rentals, they are unlikely to put them back on the normal rental market.

“Government actions to attack short-term rentals will not yield the results this council expects,” said Christopher-Aaron Felker, Republican candidate for council headquarters in Ward 3. “These regulations will have no impact on stabilization of the rental market in Burlington, and will likely result in unintended negative consequences for our economy.”

Short-term rentals such as Airbnb and VRBO have been a point of contention for years in cities and towns across the country, and pressure to regulate them has recently increased with declining housing vacancy rates. Some cities in Vermont, like Woodstock and Norwich, already regulate short-term rentals. Last year, Governor Phil Scott vetoed a bill that would have allowed the state to regulate and inspect short-term rentals.

In drafting the order, Burlington officials said they seek to balance the needs of people who are financially dependent on their short-term rentals with those of people who need permanent housing.

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Councilwoman Sarah Carpenter (D-Ward 4) introduced an amendment Tuesday night that would have loosened the restrictions slightly, allowing someone with a second unit on their property to offer it for short-term rental. Carpenter also sought to expand the definition of affordable housing in the ordinance to include other state and federal housing assistance, not just Section 8.

“If they have a unit on their property, I think we should give them the option of renting it out short term,” Carpenter said. “I see it as maybe an incentive for people to become homeowners. It can provide almost like a second job for your family and allow you to stay in your house and pay for all of your expenses.”

Mayor Miro Weinberger agreed, saying he had changed his stance since he began studying the impact of short-term rentals two years ago.

“What Councilor Carpenter’s amendment does is at least the best we can do at this point,” he said.

But his colleagues disagreed and the amendment failed on a tie vote.

“We’re in crisis,” said Shannon, who voted against Carpenter’s amendment. “We have no reason to believe our housing crisis is going to change any time soon; I haven’t heard anything on the horizon to give me hope that will change.”

According to the city, Burlington has more than 10,000 rental housing units. Of these, around 250 were used as short-term rentals in 2021 – down from around 400 in the summer of 2020.

Short-term rental owners who oppose the ordinance do not dispute the figures, but say there is no need to regulate such a small fraction of the city’s apartment stock – and that it will not solve the housing crisis.

“It’s a very small group of very small, small landlords trying to pay their mortgage and their bills,” said Deb Lyons, who rents a second home on her property. In Burlington — unlike many other cities — most short-term rentals are owner-managed family operations, she said, not apartment buildings operated as de facto hotels by investors.

“Many hosts have one or two or four rental units, including one for short-term rental,” she said in an interview ahead of the vote.

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Lyons had suggested in earlier hearings that the city ease the housing crisis by requiring University of Vermont students to live on campus; encourage landlords to rehabilitate buildings that are not currently used for housing; and allow short-term rentals, as long as landlords provide an affordable rental unit for each short-term rental unit.

Owners of short-term rentals also suggested the city levy fees on rentals instead of capping them, and use the money to help provide more rental units.

Marks told the board that a property owner in Conway, NH, recently won a lawsuit against the city after he said his short-term rentals were commercial, not residential properties. The group recommended that Burlington implement a registration and monitoring system for short-term rentals, not regulations.

“This very restrictive ordinance will cost the city hundreds of thousands of dollars in lost revenue and economic activity,” Marks said.

The ordinance, which must be signed by the mayor before it can go into effect, also requires owners of short-term rentals to register with the city, which will give officials more information about their impact on the rental market. The numbers they use now come from a third-party provider.

Burlington can already regulate short-term rentals through rules originally written for bed and breakfasts, Shannon noted. But the laws are loosely enforced, she said.

“For some reason, we’ve decided to turn a blind eye to many people operating bed and breakfasts without a license if those accommodations are booked through one of the short-term rental websites,” Shannon said. “The reason we have so many of these short-term rentals is because the laws in place have not been enforced.

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