Marblehead is experiencing a surge in short-term rentals — residential properties rented out for brief periods, typically less than 30 days — that is reshaping the town’s housing landscape. Over the past three years, the number of Airbnb-style listings has more than doubled, sparking debate about housing availability and affordability.
In 2021, the town had around 100 active listings, which grew to 231 by 2024, marking a 131% increase over this period, according to AirDNA, a firm that provides short-term rental data and analytics.
“No question that STRs affect availability of housing for long term renters and likely increase rents overall,” said Kurt James, a housing advocate and member of both the town’s Fair Housing Committee and Housing Production Plan Implementation Committee. “[The committee] agrees that this is a sensitive issue that deserves attention and we are looking into best practices to address local concerns.”
A lucrative endeavor
Julia Shanks and her partner John Paskowski run an Airbnb that is attached to their home.
“We’ve had a couple of bad experiences, but that’s probably on the lower end of what most people have,” Shanks explained. “My renters tend to be from literally all over the world, and they have almost universally been marvelous, wonderful, thoughtful, friendly, complimentary.”
Shanks also noted the limited hotel options in Marblehead, with only two main establishments — the Marblehead Inn and the Harbor Light Inn. This scarcity of traditional accommodations makes short-term rentals an important option for visitors.
One of the main reasons STRs have gained popularity here is the significant financial gain for property owners. On average, AirDNA notes a short-term rental in Marblehead can generate an annual revenue of $56,800, far outpacing the income from traditional long-term rentals. For example, a two-bedroom apartment might fetch $1,900 per month in long-term rent, equating to $22,800 annually, which is less than half the potential earnings from short-term vacationers.
Shanks emphasizes that it’s far from passive income. She challenges the notion that STR revenue can be directly compared to long-term rental income without considering the additional costs and labor involved.
“I don’t think that’s a fair comparison,” Shanks said, referring to the revenue difference between short-term and long-term rentals. “There’s so much work that goes into an Airbnb. When you rent it to somebody long term, they pay their own utilities.”
Shanks elaborated on the hidden costs and efforts that STR operators face: “Yes, it’s more revenue. But it’s also more work. I think this passive income business is a myth.”
Are regulations needed?
Town officials are beginning to consider the need for regulations. Thatcher Kezer, Marblehead’s town administrator, has highlighted the increasing prevalence of short-term rentals and their impact on local neighborhoods.
“There have been complaints from neighbors about renters throwing big parties and causing disturbances,” Kezer said. “People come in, rent a place for the weekend, throw a wild party, and leave. It’s the residents who are left to deal with the noise and disruption.”
Salem implemented strict ordinances to control STRs, addressing noise complaints, parties and other disturbances. Kezer says Marblehead can take cues from these regulations to balance the benefits of STRs with community well-being.
“At some point, we will need to address the impact of these rentals,” he added. “We’re not saying we want to ban them outright, but we need to figure out how to manage them in a way that’s fair to everyone — both the residents who live here year-round and the people who are renting these properties.”
The legal landscape for regulating short-term rentals in Massachusetts has evolved since the passage of the Short-Term Rental Law in 2018. According to a legal opinion provided by the town counsel, Marblehead has several options to enshrine in bylaws:
— Regulate the existence or location of STR operators, including the class of operators, number of local licenses or permits to be granted, and the number of days an operator may rent out a short-term rental in a calendar year.
— Require operators to register with or obtain a license from the town to operate a short-term rental.
— Require short-term rentals to be subject to health and safety inspections, with the cost of inspections to be paid by the operator.
— Establish civil penalties for violations of any bylaw enacted to regulate short-term rentals.
— Establish a reasonable fee to cover the costs associated with the local administration and enforcement of STR regulations.
Marblehead implemented a 6% room occupancy tax on short-term rentals in May, similar to the tax applied to hotels. In October 2024, Finance Director Aleesha Benjamin said the town received its first payment from the state for this new revenue stream, totaling approximately $105,000 for meals and rooms local excise tax collected between June and August. Of this amount, $70,440.92 was specifically from the rooms tax.
However, Marblehead has not yet adopted an additional 3% impact fee, which would apply to non-owner-occupied STRs or owners with multiple STR units.
‘Gone in two days’
Francie King, who has been operating a bed and breakfast in Marblehead since 2012 and taking reservations over STR sites, emphasized the importance of owner-occupied rentals and the distinction between local operators and outside investors.
“I don’t agree with having B&Bs in a small town as an investment for an off-site owner. I don’t, I’ve never agreed with that,” King stated firmly.
King’s comments highlight a key debate in the short-term rental discussion: the difference between local homeowners renting out space in their primary residences versus outside investors purchasing properties solely for short-term rental purposes.
She further explained her position: “Each town ought to find a way to tax the hell out of people like that. And there is a distinction between me and them.”
King’s rental, which she describes as “owner-occupied” because it’s part of her property, was converted from a former handyman shop behind her house. This setup allows her to closely monitor the rental and maintain a connection to the community, which she sees as crucial for responsible short-term rental operation.
It is unknown what percentage of Marblehead’s short-term rentals are owner-occupied.
Meanwhile, Shanks pointed out an often-overlooked advantage of short-term rentals over long-term leases: the ability to quickly end problematic stays.
“If you have a long-term renter and you have issues, you’re stuck with them for six to eight months,” Shanks said. “With a short-term renter, if you have an issue, they’re gone in two days.”
