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What's the Situation for Airbnb in Boston?

What's the Situation for Airbnb in Boston?

Boston, MA– This week, WBUR reported that so far Boston has received only a handful of registration applications from short-term rental owners who offer their space through sites like Airbnb or HomeAway.

A city rule went into effect on January 1 requiring all short-term rentals to be registered. As of this month, the city has received only 150 applications. Boston is estimated to have over 6,000 rental units through Airbnb alone.

The rule also specifies that the person renting out a short-term space in Boston needs to actually live at the address. Boston City Councilor Michelle Wu has been one of the leading advocates for this regulation, arguing that investors are snapping up housing, creating de facto hotels in residential-zoned blocks, and displacing Boston residents. Violation of the regulations could result in a fine of $300 per day.

Some suspect that registrations have been slow to come in because Airbnb rental operators are waiting for the outcome of Airbnb’s lawsuit against the city. Boston is one of several cities that the online hospitality marketplace is suing.

Airbnb maintains that cities cannot require the homesharing service to police users and enforce local regulations on the city’s behalf. The company also objects to the disclosure of its users’ property information.

For Massachusetts' state-wide regulation of Airbnb, which will go into effect this summer, Governor Charlie Baker rejected earlier legislation that had required short-term rental owners to publish the property’s full address. Baker pushed for an amendment so that only the street name (not the number) will be publicly available via a searchable database of short-term rental registrations. The state law will also apply a 5.7% tax on short-term rentals that are occupied for more than 14 days of the year – the same tax that hotels and motels pay.

Some Boston communities are pleased with the new legislation, claiming that their once-distinct neighborhoods have started to seem like tourist hot spots. For example, Chinatown is losing some of its cultural flavor, as investors have bought up over 200 units for short-term rental in the neighborhood. Long-term residents are being priced out.

CityLab summarized an Economic Policy Institute study published a few months ago which concluded that short-term rental services like Airbnb contribute rising costs of housing while evading some of the taxes that the hotel industry is subject to. Regulations like the ones that Boston and the state of Massachusetts are putting in place will cut into Airbnb’s profits, but what’s bad for Airbnb may be good for Boston residents.