Are Short Term Rentals Illegal in Boston?

Are short term rentals illegal in Boston

In the Boston area, Airbnb and similar services have become a popular way for vacationers to obtain lodging, and for those who rent out their property, a way to create extra income. Prior to 2017, Boston and other Massachusetts cities have had no legislation in place to restrict short-term rentals.

Based in a region with a vibrant economy, area corporations sweeten the pot for some new employees by offering them luxurious short-term rentals for corporate housing until they can find permanent accommodations. The area is also a popular tourist destination. Sites such as Airbnb encourage residential property owners and tenants alike to promote their homes, condos, and apartments online for two or three times the typical monthly rent by renting them out to vacationers in addition to new hires.

As a result of these two current trends, a $2,000/month apartment in Boston’s North End might bring in more than $4,000 per month on an Airbnb rental for the same property. Large property owners and management companies are making a killing on higher earning short-term rentals. These developments have caused conflicts in the City of Boston, where sentiment runs high that individuals should be allowed to occasionally rent out their property short-term. While many cities are passing laws to regulate short term rentals advertised on sites like Airbnb, Boston is the first city to single out corporate rentals. Part of the reason for regulating short-term rentals is to increase tax revenues for municipal governments who are not getting a fair share of prosperity of the area.

While short-term rentals have not been illegal in Boston, new laws aimed at increasing the tax revenue for the city are pending.

New Local And State Laws Will Regulate Short Term Rentals

A new bill introduced in January 2017 could mark the end of unregulated short term rentals. One proposed bill creates three categories of hosts (residential, commercial, and corporate renters) who offer property for short-term rental and will levy taxes on them based on how many days per year they rent out property and how many units they rent out. This bill would generate nearly $50M in revenue for the city and $18M for the state.

The bill, which makes Airbnb units regulated more like hotels, will also require hosts to register with the state, meet new insurance requirements, and be subject to inspection. Activity in the state legislature mirrors local attempts to regulate the market.

Airbnb is supportive of the pending legislation. According to Airbnb Public Policy director Will Burns, “What it does do is level the playing field between short term rentals and hotels, and it makes sure cities and states have the resources they need to accomplish what they need to for their people.”

While some landlords benefit from the unregulated short-term rental market, others fear liability that can result when unvetted renters occupy the property. As short term rentals are currently legal in Boston, landlords must use strong leases that clarify whether subletting is allowed and monitor whether illegal short-term rentals are taking place.