Dozens of local property owners and rental managers packed the Marblehead Planning Board meeting Nov. 12 to weigh in on potential regulations of the rapidly growing industry.
Town Planner Alex Eitler raised the possibility of studying short-term rentals’ impact. Members tasked Eitler with conducting a baseline assessment of the local cottage industry as concerns about short-term rentals’ effect on housing availability and neighborhood character exist.’
According to recent data from AirDNA, Marblehead currently has about 231 active short-term rental listings, up from approximately 100 in 2021. And short-term rental operators present at the Planning Board meeting highlighted their role in supporting local businesses and providing accommodations in a town with limited hotel options.
“Airbnb people that come and stay in Marblehead — they shop in Marblehead, they go to Marblehead restaurants,” said Dawn Livigne, who operates an owner-occupied Airbnb. “Because Marblehead is not a drive-through destination, local businesses really need the additional income from tourism.”
The town implemented a 6% room occupancy tax on short-term rentals in May, with recent data showing promising returns. According to town records, Marblehead received approximately $70,440 in rooms tax revenue between June and August. The town could also implement regulations that could generate revenue, too.
Marblehead Select Board Dan Fox urged officials to consider the impact on housing availability.
“The bigger picture here is looking at what the housing production plan called out – [short-term rentals are] eating up supply,” Fox said. “The argument is that it’s pushing up prices for both sales and rentals.”
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.
Neighboring Salem is often cited as a pioneer in regulating short-term rentals. Salem requires operators to obtain certificates and undergo annual reviews, though the city hasn’t implemented caps on the total number of units. Some operators in Marblehead suggested that a certification program could help maintain quality standards while preserving the economic benefits of short-term rentals.
“A certificate to make sure that these properties are well maintained and well managed” would be beneficial, said Amy Ruocco, who manages 13 short-term rentals in town through her company Hosted Guest. “I’m in my properties every single day.”
Henry Hammond, an 18-year veteran of short-term rentals, acknowledged not just the complex economic dynamics at play but also the niche industry’s self regulating.
“There’s a lot of transparency around us. Every time a short-term rental is booked, it’s reviewed [by the renter after they check out],” he said, “so if there’s anything unusual or problematic about your apartment, it becomes public knowledge quickly, and you’re less likely to succeed.”
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 reasonable fees to cover the costs associated with the local administration and enforcement of STR regulations.
