Framing the Burlington Context
Based on data from the City of Burlington, Host Compliance (HC), AirDNA, and AirBnB the following is intended to provide a snapshot of the short-term rental landscape in Burlington in 2019:
- 410 unique short-term rental listings across many platforms (HC). This represents approximately 2% of all housing units in the city. There was a 25% increase in short-term rentals between 2018-2019 (HC), and the total number doubled from 2016-2019 (AirDNA).
- AirDNA reports 66% of rentals are for the whole housing unit, and that 76% of listings were efficiency, one bedroom, or two-bedroom units.
- Presently, short-term rentals have been handled under the City’s zoning standards as a Bed & Breakfast or a hotel. However, it is estimated that 95% of these units are operating with no zoning permit. Additionally, it is unclear how many of these units have been subject to life safety inspections through the rental registration process.
- In a 2019 press release, AirBnb reported that Burlington was the #1 destination for their guests visiting Vermont in the summer 2019. Per Host Compliance, the average monthly revenue for a short-term rental in Burlington was $2,700, at an average nightly rate of $161 per unit; for a short-term rental to earn this amount of revenue, it is estimated to be rented for around 200 nights per year.
- The City collects a 2% Rooms & Meals tax on income from short-term rentals. In 2019, the City’s Housing Replacement fee for a 1-bedroom rental unit was $7,930.
- AirBnB reported that 63% of Burlington hosts self-identify as women, and 31% self-identify as being 60 and older.
FAQs about this Policy
Why not consider an outright ban on short-term rentals?
- Many have expressed their support for short-term rentals as a flexible, low-barrier way for hosts to earn income to offset their cost of living, stay in their home, enable them to more efficiently use space within their home, or to find ‘mid-term’ tenants (i.e. to market an available bedroom to a traveling faculty, researcher, etc). This proposal intends to enable these benefits, while limiting the proliferation of entire units as short-term rentals.
- Others have noted the city-wide economic benefit of short-term rentals in bringing visitors to the city, and the ability for short-term rentals to serve as a more affordable alternative to traditional lodging. This proposal intends to enable some short-term rentals to balance this benefit, while limiting wide-spread impact on long-term housing options.
What impact does this policy have on renters? What benefits?
- The most significant benefit to renters is reduced competition for rental units by requiring the host to live on the same property as the short-term rental, and by limiting the total number of rentals in each building. This limits the potential for individuals/management companies to operate multiple properties and/or a large number of units within a building for short-term rental purposes which removes those units as long-term housing.
- For short-term rentals that replace a long-term housing unit, a host is required to either create an equivalent unit elsewhere, or pay a Housing Replacement fee. The fee is intended to represent the cost to the Housing Trust Fund to create or preserve a permanently affordable housing unit of equal size. Thus, this fee will generate revenues to expand the capacity of the Housing Trust Fund to offset the loss of the housing unit.
Does this policy benefit only those individuals with the financial means to own a multi-unit property or comply with housing replacement fees?
- Under this proposal, there are two low-barrier options for hosts to realize the economic benefits of short-term rentals within their existing homes without major physical improvements and/or impact fees: by renting as a ‘temporary use’ for fewer than 30 nights per year, or by renting up to two bedrooms within their home. In the former scenario, the City’s zoning requirements would not apply, and in the latter, minimum housing code inspections would not apply. In both scenarios, Housing Replacement fees would not apply.
How will the City enforce the proposed regulations, particularly regarding the occupancy of the host?
- The City anticipates working with a third-party provider to regularly monitor short-term rental listings across platforms, to be compared to the City’s rental registration list. Rental registration is renewed annually, which requires a number of details to be submitted, including the address of the owner. This proposal will further require questions to be answered about any short-term rental use of the property.
How does this proposal compare to other communities’ regulations for short-term rentals?
- Approaches that cities have used to regulate short-term rentals vary widely. Bar Harbor, ME created a permissive framework, simply requiring a registration process that includes standards for the health and safety of guests. Based on the concern about the impact on local housing supply, Portland, ME created a limit on the number of short-term rentals within a building based on the total number of units in a building, and whether the building was owner or renter-occupied. Facing a notorious housing crisis, San Francisco, CA has created a robust set of zoning and building code standards, and established an entire office to enforce these regulations. The State of Vermont requires minimum life safety standards and payment of Rooms and Meals taxes. This proposed approach builds on the State’s requirements, and falls between the Portland, ME and San Francisco, CA models.