Burlington City Council Passes New Rules Limiting Short-Term Rentals | Off Message

Burlington City Council Passes New Rules Limiting Short-Term Rentals


A local Airbnb offering - FILE: LUKE AWTRY
  • File: Luke Awtry
  • A local Airbnb offering
Updated at 2:57 p.m.

The Burlington City Council voted on Tuesday to clamp down on short-term rentals in an effort to make more housing available to people who need a permanent place to live.

The new rules, which the council passed by an 8-4 vote, will severely restrict how people can operate short-term rentals such as Airbnbs in the city. The ordinance allows people to use their permanent residence for the rentals, meaning they can rent out single bedrooms in the house or — if they leave temporarily — the whole property. Under the new limits, homeowners can rent out up to three bedrooms at a time.

The rules will curtail the practice of buying homes and apartment buildings as investment properties and using any or all of the units as short-term rentals. And they will stop homeowners from using accessory dwelling units on their property as short-term rentals.

"It's not exactly what I wanted, not exactly what a lot of us wanted," said Councilor Zoraya Hightower (P-Ward 1), who voted for the ordinance.

"It is what most of us supported at some point this year," Hightower said. "I think that moving forward with something most of us were willing to support even a month ago is much better than not moving forward with anything at all."

Mayor Miro Weinberger has three weeks to sign the ordinance, though it’s unclear if he will. In December, he spoke in favor of "a very restrictive policy" as a way of trying to solve the city’s housing crisis. But on Tuesday, he said the ordinance "goes too far.

"I do believe it will have significant and negative community economic consequences as written," the mayor said before the vote.

Under the new limits, seasonal homes that aren't habitable year-round can continue to be used as short-term rentals. And property owners can get around some of the restrictions: They can use one unit as a short-term rental, as long as they rent one to someone who is receiving a voucher for Section 8, the federal government program that assists the low-income, elderly and disabled. The units available to low-income tenants must be in addition to those that are already required by Burlington's inclusionary zoning rules.

Supporters said the ordinance will free up some of the homes that are now being used by vacationers, and will enable more families to find permanent housing in Burlington, which has a rental vacancy rate of just 1 or 2 percent — far below the 5 percent considered healthy, according to the city.

City Councilor Joan Shannon (D-South District), a realtor, said in an interview before the meeting that she works with people who want to move to the area but can’t.

“They are coming here to fill jobs that we need filled, they are coming to work at the hospital or the university, and there is nothing for them to rent or buy,” she said.
Opponents of the ordinance said restaurants and other local businesses rely on the traffic that short-term rentals, which are often less expensive than hotels, bring to town. And they said curtailing the rentals so severely would hurt homeowners who have been relying on the extra income they earn from them.

"Tonight's outcome is devastating to many Burlington homeowners, service workers, and businesses who rely on the short-term rental economy," said Julie Marks, the executive director of the Vermont Short-Term Rental Alliance. "The decision to prohibit short-term rentals on one's own property in a detached unit, like an ADU (accessory dwelling unit), is unprecedented in Vermont and, unless vetoed by the mayor, would be one of the most restrictive policies against short-term rentals in the whole United States."

Short-term rental owners have told the city council that if they’re blocked from using their property for short-term rentals, they’re unlikely to put them back on the regular rental market.

"Governmental actions to attack short-term rentals are not going to provide the results this council intends,” said Christopher-Aaron Felker, a Republican candidate for the council's Ward 3 seat. “These regulations will have no impact on stabilizing the rental market in Burlington, and will likely result in negative unintended consequences to our economy.”

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

In crafting the ordinance, Burlington officials said they sought to balance the needs of people who rely financially on their short-term rentals with those of people who need a permanent place to live.
Councilor Sarah Carpenter (D-Ward 4) introduced an amendment Tuesday night that would have slightly loosened the restrictions, allowing someone with a second unit on their property to offer that as a short-term rental. Carpenter also sought to broaden the definition of affordable housing in the ordinance to include other state and federal rental assistance, not just Section 8.

"If they have a unit on their property, I think we should give them the opportunity to short-term rent it," Carpenter said. "I see that as a perhaps an incentive to people becoming homeowners. It may provide almost like a second job for your family and allows you to remain in your home and pay all your expenses."

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

"What Councilor Carpenter's amendment does is at least the best we can at this point," he said.

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

"We're in a crisis," said Shannon, who voted against Carpenter's amendment. "We don’t have any reason to believe our housing crisis is going to be changing anytime soon; I haven’t heard anything on the horizon to give me hope this is changing."

According to the city, Burlington has more than 10,000 units of rental housing. Of those, about 250 were being used as short-term rentals in 2021 — a drop from about 400 in the summer of 2020.

Short-term rental owners who oppose the ordinance don’t dispute the numbers, but say regulating such a tiny fraction of the city’s apartment stock isn’t necessary — and isn't going to make a dent in the housing crisis.

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

"Many hosts have one or two or four rental units, with one as a short-term rental," she said in an interview before the vote.
Lyons had suggested in earlier hearings that the city alleviate the housing crunch by requiring University of Vermont students to live on campus; incentivizing property owners to rehabilitate buildings that aren’t currently being used for housing; and allowing short-term rentals, as long as the owners provide one affordably priced rental unit for every short-term rental unit.

Short-term rental owners have also suggested that the city levy fees on the rentals instead of limiting them, and use the money to help provide more rental housing.

Marks told the council that a property owner in Conway, N.H., recently won a lawsuit against the town after it declared his short-term rentals to be commercial properties, not residential. The group has recommended Burlington implement a registration and monitoring system for short-term rentals, not regulation.

"This highly 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 short-term rental owners 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 vendor.

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

“For some reason, we have decided to turn a blind eye to many people operating bed and breakfasts without a permit if those lodgings 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 that are on the books haven’t been enforced.”

Correction, February 25, 2022: A previous version misreported one of the exceptions to the new regulations.