2015-04-16 / Front Page

Short-Term Rental Laws Examined

By Olga Enger

Residents who lived in Newport during the 1980s may recall complaints of party houses, in the era dubbed as “Zoo-Port.” In 1992, the Newport City Council responded to the complaints by passing a short-term rental ordinance that required registration of houses rented for nine months or less and restricted rentals of under 30 days.

Today, councilors, along with several local groups, would like to reopen the discussion.

“The unintended consequence is that we are discouraging families from visiting Newport,” said Councilor Naomi Neville, who co-sponsored a resolution to hold an April workshop, along with Councilors John Florez and Lynn Ceglie. The resolution was unanimously approved in March.

The council passed a similar measure in July 2014, introduced by Neville, instructing the city administration to research the topic, but the task was delayed after former City Manager Jane Howington resigned.

“Every year my family goes on a week's vacation, to places like Martha’s Vineyard or Maine. We rent about three or four houses. We wouldn’t be able to afford it if we stayed in hotels. We could be a typ- ical customer base,” said Neville. “We may eat breakfast at home, but then 25 of us may go out to dinner.”

Groups such as the Newport Board of Realtors, the Newport Chamber of Commerce and Discover Newport have also expressed an interest in relaxing the ordinance.

“Families want to rent for a week. They are the ones who spend money, eat in the restaurants, and shop downtown,” said Newport Board of Realtors President Belinda Nattress. “Monthly and summer rentals are typically the young professionals, coming to Newport to party. They stuff their cars with food and pack the houses. They may go out downtown, but they don’t spend as much as families.” Nattress was referring to an established practice of “sharehouses,” where a group of people, typically singles under 40, rent a house and divide the weeks among themselves.

Nattress said, after a roundtable discussion on the issue, the board’s rental commission was in unanimous support of exploring shortterm rentals.

“We also have concerns that [the current ordinance] takes away the rights of property owners,” added Nattress.

The board’s position is consistent with its stance in 1992, when it spoke up against the ordinance. At that meeting, Richard Updegrove, an attorney representing the Board of Realtors, said he believed the registration of short-term rentals would be unconstitutional. He also stated the registration requirement is a violation of state law, because approval must first be obtained from the Rhode Island General Assembly before imposing a new license.

Councilor Kathryn Leonard, a realtor, said while she doesn’t necessarily oppose reviewing the ordinance, she has concerns.

“We have to be careful what we wish for and do our homework,” said Leonard. Her primary concern was the cost associated with enforcement. She added communities that allow weekly rentals have issues with party houses. “It’s Zoo- Port all over again.”

Neville reasoned while she understands the concerns for enforcement, the reality is that people are already renting their houses out for less than a month. On home rental sites such as Airbnb.com, there are hundreds of properties listed as weekly rentals.

“It’s happening, yet it’s not Zoo- Port,” Neville said. She added one reason noise complaints are down is that Salve Regina has moved more students on campus. At the 1992 meeting, councilors noticed that the university and the city had begun collaborating to reduce problem houses.

This year, more than 600 homes have been registered with the city as short-term rentals (durations between one and nine months), and there are in excess of 170 approved guest houses, including hotels.

“When the 1992 ordinance was passed, we set up the tracking system. It’s two different databases,” explained City Clerk Laura Swistak.

Guest houses, or rentals under 30 days, are permitted by right in the limited business, waterfront business, general business, and commercial-industrial districts. Properties that do not fall within these districts may apply for a special use permit through the Zoning Board of Review.

Depending on the specifics, guest houses may fall into one of six categories: hotels, transient guest houses, temporary housing for yachting organizations, home occupations, guest houses and vacation guest facilities. The registration fee is $20, with a $25 home inspection fee.

The city has modified the restrictions in some instances. For example, a transient guest facilities ordinance (§ 17.100.050) was introduced in 2003, to accommodate time shares.

“City Council has done its best to try to accommodate some form of rentals," said Leonard. “We were approached about time-shares, in order to accommodate families. We figured it had good monitoring; there was always someone there in terms of management.”

In 2000, City Council approved an ordinance to allow housing for yachting organizations (§ 17.100.110).

“It’s not like we have said no all along,” explained Leonard.

Council member Justin McLaughlin said the next step is data collection.

“I think the challenge now is to assemble the information that has been requested and then assess how permitting short-term rentals could be done in Newport to achieve maximum benefit, while avoiding the problems that critics will focus on,” said McLaughlin.

The workshop is yet to be scheduled.

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