Bill on short-term rentals ratchets up a fundamental debate in N.H. communities

By: - April 11, 2022 5:55 am

Portsmouth Mayor Deaglan McEachern addresses a House committee to oppose a bill to bar towns from prohibiting short-term rentals. (Ethan DeWitt | New Hampshire Bulletin)

The short-term rental opponents came armed with anecdotes. 

Short-stay homes and apartments – such as properties rented through Airbnb and Vrbo – have brought busloads of rowdy students from Harvard to downtown Sunapee, and have sparked verbal altercations over use of the town beach, select board members testified at a hearing Thursday. They’ve caused some roads in the Lakes Region to clog with cars, one attendee said, and were the reason residents in Milford were awakened one Monday morning by 4 a.m. fireworks, another added.  

Tensions over rental properties in high tourist areas of New Hampshire are nothing new, and a piece of legislation proposed this year is continuing the debate. Senate Bill 249 would bar New Hampshire towns from prohibiting short-term rentals, allowing the towns to register and regulate them instead. 

The topic remained a lightning rod Thursday, with local residents, mayors, and real estate organizations staking out opposing positions throughout a multi-hour hearing before the House Municipal and County Affairs Committee. 

But some opponents are raising another concern this year: potential effects on affordable housing. Housing advocates in the Seacoast region are warning that an increase in short-term rentals could remove critical housing stock from the state’s circulation, causing rents and prices among surrounding houses to rise.

Advocates for the bill say the affordable housing concerns are overblown, and beside the point. Renting out homes or apartments to guests already falls under legal “residential use” and are a cornerstone of a homeowner’s property rights, they argue. SB 249 simply codifies that reality into law, supporters say. 

And as lawmakers consider legislation, the state courts are moving forward on their own track. A case to decide whether states can bar short-term rentals is heading to the state Supreme Court. 

‘A bundle of rights’

Proposed by Sen. Harold French, a Franklin Republican, SB 249 bars towns from prohibiting “the use of a building or structure as a vacation rental or short-term rental,” which the bill defines as “any single-family or two-family building or structure, regardless of how it is owned or occupied and regardless of whether the building or structure is conforming or non-conforming, or offered in whole or in part for rental or transient use.”

The bill would not prevent towns from passing “parking, noise, safety, health, sanitation, or other related municipal ordinances,” and it would not include hotels in its definition of short-term rentals. It would allow towns to require regulations, such as property inspections to determine whether the homes meet minimum housing standards. And it would allow for the short-term rental registration to be revoked after two or more violations of health, safety, sanitation, noise, or parking violations. 

Housing industry groups have welcomed the bill, calling it an affirmation of a fundamental right of property owners. 

“When you purchase a property, you get a bundle of rights,” said Bob Quinn, CEO of the New Hampshire Association of Realtors. “One of those sticks that you get is the ability to rent out your property. If one of those is removed, the value of that property is decreased.” 

“There’s an opportunity here to clarify this once and for all,” he added.

But a number of mayors are opposed, including Mayor Deaglan McEachern of Portsmouth, Jim Bouley of Concord, Joyce Craig of Manchester, and Jim Donchess of Nashua. 

In an interview, McEachern said he is not opposed to the concept of short-term rentals. But he argued that cities and towns needed to have a way to filter who owns them. Owner-occupied property – homes whose owners live in them a majority of the year and rent them at other times – is acceptable, McEachern argued. Properties bought and managed by out-of-state individuals or companies, he said, is less desirable. 

McEachern said that an increase in short-term housing could price out residents from the city – already one of the most expensive places in the state to live. And he said a drop in residents could decrease any boost the city might see in its share of the meals and rooms tax if short-term rentals expanded – fewer residents would mean a smaller share of the tax. 

“I worry that this bill is going to throw gasoline on the affordable housing crisis – that it’s going to tear communities apart,” McEachern said. Not out of any ill intent of the bill, he said, but just a lack of understanding of the impacts on communities “when we don’t have long-term residents any longer.” 

Other housing advocates have worried about the impact on the state’s tight housing market, in which high prices already follow areas of high demand, such as the Lakes Region and the Seacoast. 

“If our supply was at a healthy level, if people could find a place to live, then sure, having some short-term rentals may make sense,” said Nick Taylor, executive director of the Workforce Housing Coalition of the Greater Seacoast. “But in a situation where we’re already so crunched, taking a tool away from communities that are trying to combat the housing crisis with smart local ordinances doesn’t make sense.” 

Regulation questions

Other skeptics of the bill have focused on what they said were immediate community concerns: noise and nuisance levels. 

Thais St.Clair, the president of the Lakes Region Bed and Breakfast Association and the owner of the Sutton House Bed and Breakfast in Center Harbor, says she has begun listing her property on Airbnb and Vrbo. “If you can’t beat them, join ‘em,” she said. But St.Clair said she opposed the bill, which she said could open the gates to more short-term rental listings that aren’t as regulated as traditional bed and breakfasts. 

Food service licenses for B&B’s that serve breakfast might not apply to short-term rentals, and regulations for smoke and carbon monoxide alarms might not either, St.Clair said. And the new rentals could bring unfair competition, she added.

“Personally I’m very much in favor of every type of accommodation being available to visitors and residents in New Hampshire,” St.Clair said. “But there has to be a balance right now. The B&B community is suffering from the vacation rental properties popping up all over the place.”

Others spoke to specific worries around an excess of visitors in their towns. 

But proponents say the concerns are misplaced. The bill expressly allows towns to require short-term rentals to register, pay a registration fee, and submit to site inspections, powers that towns don’t currently have for short-term rental properties, they noted. And they said that nuisance ordinances and other criminal statutes would still apply if the bill passed. 

“I know people are grasping for straws to say ‘we need to ban them,’” said Paul Mayer, president of the White Mountain Board of Realtors and a board member of the Mount Washington Association for Responsible Vacation Rentals. “‘They’re noisy and they’re loud and they park on the streets.’ And our association totally agrees. Regulate them. Do whatever you would do with any other house on the street that was not performing properly, causing problems, having fireworks, having late-night parties.”

“The only thing that SB 249 says is … you can’t ban them,” Mayer continued. “You can regulate the hell out of them, but you can’t ban them.” 

In the courts

Meanwhile, the issue is working its way through the state’s court system. Carroll County Superior Court ruled against the town of Conway in January, rejecting town officials’ attempt to block a resident from operating a short-term rental. 

Conway had argued that its “permissive ordinances” are designed to allow properties to be used only in the ways directly spelled out in those ordinances. Because the ordinances explicitly allowed only owner-occupied short-term rentals, a short-term rental that was not owner-occupied could be barred, the town argued. But Carroll County Superior Court Judge Amy Ignatius sided with the property owner, Scott Kudrick, holding the town’s ordinances were too outdated to adequately contemplate short-term rentals through sites like Airbnb, and that their use constituted a residential use of a property. 

The town has since appealed the case to the state’s Supreme Court; for now, at least, short-term rentals in Conway are permissible. 

In her decision, Ignatius called on the state Legislature to draft legislation to provide clarity. On Thursday, advocates for SB 249 cited that call to bolster support. 

“I think one important thing that the legislative branch needs to look at is if you don’t deal with short-term rentals with a bill like SB 249, that hands towns powers to regulate them, you’re leaving it up to a dozen superior court judges to make decisions on their own,” Mayer said. 

To Taylor, though, the superior court ruling should not mean an automatic victory for the bill. The Legislature could pass legislation permitting some short-term rentals and barring others, he said. 

“Just because the courts have asked the Legislature to weigh in on a policy doesn’t mean that the policy has to be prohibiting communities from prohibiting short-term rentals,” Taylor said. “You could easily have it be in the opposite direction.”

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Ethan DeWitt
Ethan DeWitt

Ethan DeWitt is the New Hampshire Bulletin’s education reporter. Previously, he worked as the New Hampshire State House reporter for the Concord Monitor, covering the state, the Legislature, and the New Hampshire presidential primary. A Westmoreland native, Ethan started his career as the politics and health care reporter at the Keene Sentinel.