The state will not impose registration requirements on residents who engage in home-sharing and other short-term property rentals, after Gov. Dan McKee’s recent rejection of proposed legislation to that effect.
Officials in local towns expressed skepticism at whether a registry would actually be functional or simply become another revenue-generator for the state by extracting a registration fee. The state admits it lacks the staff to do any compliance checks.
“I think it is good that they are leaving it up to the community,” said Jamie Gorman, building official and zoning enforcement officer for the Town of South Kingstown.
His colleague in Narragansett, Wayne Pimental, building official who monitors, as Gorman does, compliance with various town regulations for housing, agreed.
“I’m not sure what service would be coming from the state. It seems right now all that kind of law would do is require a collection of fees,” he said.
McKee last week vetoed a proposed law to make property owners register with the state before listing short-term rentals through online lodging websites such as Airbnb and VRBO.
“I cannot support this bill because it will create additional burden for property owners,” McKee wrote in a veto message. “Short-term rental concerns, like other property/land use and small-business matters, are most effectively addressed at the municipal level,” he said.
In recent years the South County area especially has seen dramatic rises in home-sharing and the online services real estate agents and private homeowners use to promote them. These often lower-cost lodgings compete with hotels for the tourists’ or travelers’ dollars.
Income Opportunities
For individual homeowners, offering a room — or even a house — for selected days or weeks, whether by season or month, short-term rentals in private homes can provide a healthy second income, especially as travel increases with pandemic restrictions lifting.
The summer season especially attracts people to these lodgings and homeowners are making up for other financial losses.
The state registry idea came after a University of Rhode Island student was killed following an altercation at an Airbnb property in Newport over Memorial Day weekend.
However, short-term rental owners are already required to register with the Division of Taxation. The state’s Department of Business Regulation also opposed the legislation due to a shortage of staff to enforce it.
In Narragansett, Pimental explained, people engaged in home sharing — as well as other forms of lodging rentals — are required to register with the town for safety purposes and the town collects a fee.
Those failing to do so risk a $300 fine, he said. While the town doesn’t go to properties to do inspections, warning letters and an official visit could come if the town receives complaints about the conduct of renters or their guests, he said.
South Kingstown and North Kingstown, on the other hand, do not have registration systems.
South Kingstown, however, has regulations that prohibit rental of rooms and creation of rooming houses, but will allow the rental of a full house, Gorman said. He added that special-use permits are needed for bed and breakfasts.
If properties suddenly become hot spots for complaints or have rentals the town does not allow, enforcement officials will investigate complaints, Gorman added.
Greg Mancini, president of the North Kingstown Town Council, would like the government to track what homeowners do with their property because “these are businesses. I think there needs some kind of oversight and it should come from the state.”
If the state ever created such a database, these officials said that their towns would tap into it because up-to-date information would assist in dealing with complaints.
Newport has written short-term rental rules into its ordinances and hired a dedicated short-term rental compliance officer to enforce them.
The concern of legislators, though, for addressing this market-in-demand has some roots in the numbers showing a continually growing trend.
Douglas Quinby, a senior industry analyst with Phocuswright, told Travel Weekly two years ago that “…basically anybody, anywhere, with a home or space to rent in their home could rent it out.”
He added, “It’s proven to be something that’s penetrated deeply into the mainstream. We’ve been saying for years now that the expression ‘alternative accommodations’ is out of date, because it’s no longer ‘alternative.”
His observation has proven accurate.
AirDNA, a company that analyzes travel habits of people, this year said that short-term rental demand is exceeding all expectations in 2021 as demand surges in small-town and destination markets throughout the United States.
It said that in the first three months of 2021, the U.S. hit a record for new bookings each month leading up to April 2021 when demand (nights) surpassed 2019 levels for the first time since February 2020.
“This milestone marked the end of the recovery and the beginning of the next phase of expansion for the U.S. short-term rental industry,” it said.
So far, new supply has struggled to keep pace with the rising demand. “New campaigns from both Airbnb and Vrbo should help, but will not be enough to satisfy the record demand for this summer,” it said.
AirDNA reported that when it compared pre- and post-pandemic data (April 2019 to April 2021), numbers show:
- 67% more listing nights sold in 2021 than 2019 in small cities/rural markets
- 25% more demand in both destination/resort locations (mountain/lake and coastal)
- Eight percent demand growth in mid-size cities
- 13% lower demand in suburban areas
- 41% lower levels of demand for urban properties.
Statistics were not immediately available for the South County market.
Locally, Robin Leclerc, a real estate agent with Residential Properties Ltd. in Narragansett, said those kinds of number align with her experiences watching jumps in local home-sharing.
She said that she has increased the number of her listed Vrbo properties by one-third and that she also tells about 75% of callers looking for a summer vacation accommodations that she has no properties with available to rent.
Leclerc said that she has mixed feelings about compiling a database, such as Narragansett has, but the state should leave the project to municipalities.
“Use the money (from fees to register) to help with things like policing when we need it at properties when people aren’t behaving well,” she said.
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