With the increasing need for quality housing, conversations about whether, and how, to permit short-term rentals tend to be challenging. Short-term rentals can, and often do, have BOTH positive benefits, and negative impacts upon communities. With the advent of online booking platforms, what was once thought of as a resort community dilemma, is now impacting rural and urban communities far different from the traditional resort destination.
In New Hampshire, municipalities can utilize their local land use and business licensing authority to determine where, how, and when vacation rentals are allowed. Through regulations and incentives, communities can fine-tune their short-term rental policies and programs to fit their unique circumstances. But how?
Fortunately, there are many examples throughout the country of counties, towns and cities that have chosen to permit short-term rentals to varying degrees, while also enacting guardrails through zoning and licensing tools to mitigate their negative impacts to year-round residents.
One excellent resource to get an overview of the variety of tools which communities can implement is the Colorado Association of Ski Towns’ (CAST) “Short Term Rentals Matrix.” CAST has been surveying towns and cities in Colorado about their short-term rental policies for several decades as vacation rentals have been an essential part of the housing mix since the late 1970s. In Colorado communities, short-term rental regulations and workforce housing incentive programs have evolved over the years as conditions and needs of the communities have changed.
In CAST’s most recent Short Term Rental Matrix, issued in June of 2023, survey results from 31 municipalities and three counties in and around Colorado were presented. Most of those communities are using, not just one, but a combination of land use regulations, business licensing procedures, and workforce housing incentive programs to promote a balance between permanent housing needs and vacation rental demands.
Zoning regulations can help determine where short-term rentals may be allowed. And short-term rental licensing ordinances can allow municipalities to set limits and enforce how short-term rentals operate. Through enacting legislation, towns can create different license types with different fees, caps, requirements and/or terms.
For example. some towns use caps like only permitting one short-term rental license per block. And other towns have different types of short-term licenses with different caps, such as allowing an unlimited number of short-term rental licenses to properties that are primary residences or are owner-occupied, while capping the number of licenses granted to vacant, second home or investment properties.
Many towns and cities collect fees and taxes on short-term rentals to help offset their impacts. And within the last few years, several communities have launched incentive programs to encourage property owners and managers to set aside their residential properties for long-term housing needs. The town of Frisco is offering cash to property owners who convert their short-term rentals to long-term housing by agreeing to place a deed restriction on their residential units. And Summit County’s Lease to Locals program provides cash incentives to qualified properties who lease their residential units for periods of 6 months or 1 year and charge no more than $1500 for a 1 bedroom, $1200 per bedroom for 2-3 bedroom-units, and $1000 per bedroom in units with 4 or more bedrooms.
As conditions change, communities throughout New Hampshire have the ability to develop creative, pragmatic, and robust solutions to help address the individual impacts that short-term rentals can have to unique communities, while allowing for the economic opportunities and benefits that they can bring.
For Further Reading
Colorado Association of Ski Towns’ Short Term Rental Ordinance Matrix (June, 2023)
Colorado Association of Ski Towns’ Best Practices and Potential Practices Identified in 2015 CAST VHR Study