Easy rentals raise complicated issues
Speaking at the Short-Term Rental Summit in Brattleboro, from left: Sibylle Kim, an Airbnb “host” from Waterbury; Joe Montano, Expedia Group’s director of state and local affairs for the Northeast region; and Liz DeBold Fusco, Airbnb’s Northeast press secretary.

Easy rentals raise complicated issues

Short-Term Rental Summit participants trade notes on a growing sector of the local economy as critics decry the effects on a tight market for permanent affordable housing

BRATTLEBORO — As the morning sun struggled to break through sleepy rain clouds on Monday, more than 200 hosts of vacation homes, Airbnb sites, and other such properties from across Vermont gathered for the state's first Short-Term Rental Summit.

The crowd at the Latchis Theatre milled in small groups, sipped coffee, ate breakfast, and swapped stories of operating their rentals in an ever-changing environment - one populated with guests, changing regulations, concerned neighbors, a “sharing economy,” and Vermont's own affordable housing shortage.

Lisa Ford and Stephanie Bonin, co-hosts of the summit that took place on May 19 and 20, stopped for a quick conversation in the lobby before the two-day summit got underway.

Sessions covered topics such as policy and regulations, insurance, state taxes, communities' case studies, and how to be a good neighbor.

Many speakers noted that Vermont's tourist industry - a sector worth $2.8 billion, according to one state official - has a long history with vacation rentals. It's the technology around the industry that has changed.

Short-term rentals have also gone by the name of vacation rentals or sometimes by the name of the online platform that lists properties, such as Airbnb.

The state of Vermont considers renting a room or a home for 10 or more days in a calendar month a short-term rental.

Hosts at the summit shared stories of how renting their rooms or their homes proved a financial blessing, allowing them to make extra money or keep a long-time family summer home in the family.

But the concept is divisive for other people, such as neighbors worried about noise, trash, strangers in their neighborhoods.

Or for grassroot advocacy groups like Brattleboro Solidarity, which contends that short-term rental businesses put pressure on the housing market, driving residents into homelessness as long-term rental apartments or houses are converted into vacation rentals.

Brattleboro Solidarity held an information session outside the Stone Church on Main Street, where the summit held its opening session on Sunday evening.

One popular short-term rental site, Airbnb, disrupted the industry when it was founded in 2008. Other online rental platforms include Vrbo and Booking.com.

Airbnb estimates that, last year, 4,500 Vermonters advertised their homes through the website.

These listings ranged from a single room in a private home for $44 a night to an 1850s farmhouse with four bedrooms at $149 a night, to unique properties, like a treehouse with a hot tub, for $155 a night.

'Quiet little engine of tourism'

The co-hosts said their goal for the summit, several months in the planning, was to widen the conversation happening around short-term rentals and to ensure that the hosts have advocacy and a sense of community.

Bonin, the executive director of the Downtown Brattleboro Alliance, which organized the event, referred to the short-term-rental hosts as “Vermont ambassadors” who help bring visitors to the state and who share “the Vermont culture” with their guests.

“I think of you all as a quiet little engine of tourism,” Bonin told the summit guests.

She said the summit grew out of her work with the DBA, which had tried to reach out to hosts to see what support they needed.

Bonin said she quickly realized that the hosts had no single point of contact or gathering space to exchange ideas, ask questions, or gain new skills. These connections are important, she said, as many communities across the country and locally, including Dummerston, have regulated the short-term rentals in their towns.

Amid this rapid change, good policy requires that everyone involved in an issue be at the table, she said.

One piece of the puzzle missing from the picture is data, Bonin said. The state lacks Vermont-specific data on the short-term rental market and the impacts that the market has on local communities.

Data can create a common frame of reference from which communities can move forward, she said.

Isolated data begins to paint a picture of an industry that is having a formidable effect on the local economy.

According to a December press release from Airbnb, Vermont hosts using the company's platform earned $48.5 million in supplemental income by renting to approximately 341,000 guests in 2018.

Hosts in Windham County welcomed 40,800 guests and as a whole brought in $5.4 million in income, according to the company.

Of the state's 14 counties, Windham ranked fourth behind Chittenden, Rutland, and Lamoille in the number of guests and income, according to Airbnb.

Ford, an Airbnb “superhost” whose Guilford cabin has received top ratings from more than 200 guests on the site, noted that most of the other forms of lodging or other tourist services in the state have respective associations that advocate on their members' behalf.

Hosts like her also need a place to exchange ideas and to have someone who can tell their stories, she said.

Right now the conversation around the short-term rental market is “a very heated, one-sided debate,” Ford said.

She said she converted the space from a long-term rental to a short-term rental six years ago.

In Ford's perspective, the state provides a lot of support and rights to tenants but very little to landlords.

“The state makes it very hard to be a landlord, where these platforms make it very easy,” she said.

Does the sharing economy create access to more resources?

Keynote speaker Robin Chase, cofounder and former CEO of Zipcar and author of Peers Inc: How People and Platforms Are Inventing the Collaborative Economy and Reinventing Capitalism, discussed the power of the sharing economy.

Speaking to the audience via videoconferencing from Pittsburgh, Pa., Chase characterized the sharing economy as “an economy of abundance.”

She said this new economy - also known as the gig economy, peer-to-peer economy, or collaborative economy - operates from a few principles:

• Sharing and collaboration is the future.

• Sharing and networking assets deliver more resources.

• The benefits of open resources/assets outweigh any problems with sharing those assets.

• By participating in the sharing economy, people get more than they give.

The structure helps people respond to a changing world by allowing people to quickly experiment, iterate, evolve, and adapt, she said.

By using the sharing model, companies like Zipcar or Airbnb leverage excess capacity, Chase explained. In other words, while average car owners spend $9,000 a year to own a car, they use their cars only 5 percent of the time.

A car-sharing service allows people to rent that car when it's not in use, therefore putting a idle resource to use instead of mining a duplicate resource, Chase said. The sharing economy also assumes that customers aren't consumers but engaged “collaborators,” she added.

“'Consumer' feels so 1950s to me,” she said.

Part of the power of the sharing economy is that it combines the strengths of the local community with the strengths of big industry, she said.

For example, small communities excel at making small investments, short-term efforts, local knowledge, and customization.

In contrast, larger communities, including industry and government, are good with large investments, multi-year efforts, standardization, and diverse technical expertise.

Chase believes that the sharing economy can combat huge social and environmental issues such as climate change because it contains what she called “three miracles.”

Leveraging excess - or existing - capacity allows humanity to “defy the laws of physics,” she said. Humanity can “tap into exponential learning” by aggregating people's experiences and knowledge. And finally, because of the diversity of people's abilities, the “right person will appear.”

Chase expressed her hope that, when the summit attendees return home, they would “scour their environments” for excess capacity and harness that capacity by sharing it.

Vermont's light touch and creating a 'proportional' playing field

Ironically, critics of the short-term rental market have come from another branch of the short-term rental market: hotels and bed-and-breakfast operators, who have taken aim at what they believe to be an “uneven playing field.”

Proprietors of traditional hospitality services, who must follow comparatively stringent regulations such as licensed hotel and bed and breakfast operators, bristle at the more lenient regulatory environment for private homeowners.

That disparity is tightening. Last year, the Legislature approved a bill that required hosts to register with the Department of Taxes, collect state rooms and meals tax, and follow general health and safety guidelines.

Wendy Knight, commissioner of the Department of Tourism and Marketing, noted that licensed lodging operators must follow 32 pages of health regulations.

At the summit, executives from two short-term-rental companies supported Vermont's “light touch” with regulation.

Joe Montano, director of state and local affairs for the Northeast region for the Expedia Group, and Liz DeBold Fusco, northeast press secretary for Airbnb, both stated that their organizations support the implementation of “sensible regulations.”

They noted that each community needs to create its own set of guidelines and policy around the short-term rental market.

The state and Airbnb also entered into an agreement where Airbnb collects taxes on behalf of hosts.

Many larger cities such as New York or Los Angeles have had contentious relationships with short-term rentals, DeBold Fusco said. They've banned the rentals in some cases or regulated them to a discouraging level, she said.

New York City isn't Vermont, said DeBold Fusco, who said the state needs to create policies that reflect and protect its own communities.

“We're not opposed to good, sensible regulation as long as it's sensible,” said Montano. He defined such regulations as ones that are easy to adhere to and easy to understand.

If hosts are burdened by regulations, then they'll look for ways around them, he said.

To illustrate effective regulation, Montano pointed to Indiana's example.

He said the state had identified short-term renting as a right but required that hosts collect applicable taxes, adhere to noise ordinances and other nuisance codes, and submit to a handful of life-safety mandates like installing carbon-monoxide detectors.

Are short-term rentals a threat to local housing?

Knight said that for the past two years, she and other members of the Scott administration have worked together to discuss creating a strategy and regulations that close the disparity between short-term rentals and licensed lodging operations.

Data is key to this effort, she said.

To that end, the state has approved a study of short-term rentals. A request for proposals was posted last week, Knight said.

According to the RFP, the study will identify concentrations of short-term rental units/properties, determine their location, determine if they are primary or non-primary residences or properties, determine the number that are owner-occupied, determine if the property is one advertised by the host, and “[p]rovide insight on the impacts of short-term rental units/properties on the housing market and lodging industry.”

The contractor will be expected to create an inventory of all short-term-rental properties in the state in 2019 and capture data, including location, number of bedrooms, maximum number of guests, average nightly rental fee by season, residence of property owners, and the type of rental.

She expects the study to start in July. Bids are due May 31.

State Sen. Becca Balint, D-Windham, said that Vermont's housing shortage is “acute.” But she didn't view short-term rentals as the cause or as a long-term threat to licensed operators.

“This platform isn't really stealing” from hotels or bed and breakfasts, said Balint, pointing out that travelers choose their accommodations based on so many different criteria and preferences.

Regarding concerns that short-term rentals could contribute to homelessness or increasing rents, Balint said the jury's still out on whether short-term rentals are having positive or negative effects on their communities.

“We don't have the data,” she said.

Doug Farnham, policy director for the Vermont Department of Taxes, reminded hosts that towns have a vested interest in how residents use their private property.

Property use can change a property's value and affect a town's Grand List, he explained.

In recent years, the short-term rental market has increased in Vermont, Farnham continued. That said, the market is only 2 percent of the statewide Grand List.

Vermont has challenges when it comes to affordable housing, he continued. “We have things to fix in our Grand List, and they're not because of the short-term-rental market.”

Chris Lievense would disagree.

“It's a crisis here in Vermont,” said the Brattleboro resident, who hopes the town will eventually ban short-term rentals.

Lievense, a member of Brattleboro Solidarity, said that the rent at his former apartment increased from $950 a month to $1,450 after his landlord started renting one of the units in the building via Airbnb.

The impacts didn't stop there, he said.

When the other tenants wanted to hold a yard sale, the landlord said no, because the Airbnb unit was rented that weekend and the yard sale might look bad, according to Lievense.

According to a flyer from Brattleboro Solidarity, short-term rentals contribute to homelessness because landlords can make more money through short-term rentals compared to long-term rentals.

Over time, the number of available long-term options is diminished each time a property owner shifts to the short-term option.

Summit co-host Bonin acknowledged these concerns, noting that surely everyone - hosts, renters, guests, policymakers - can find common ground.

But the community won't find that common ground without a deep conversation, she said.

There are so many intertwined issues around housing in Vermont, she said, “and one issue is not more important than the other.”

Panelist Dean Trefethen, planning director for Laconia, N.H., took a more direct approach to the situation faced by hosts and communities alike during his panel's question-and-answer period.

“The genie is out of the bottle - you can't fly under the radar anymore,” he said.

Subscribe to the newsletter for weekly updates