Short-term Rental Registrations Lag

by Tim Wood
Registration of short-term rentals is lagging in local towns. Registration of short-term rentals is lagging in local towns.

Since 2019, owners of short-term rentals have had to register their properties with the state department of revenue, which is charged with collecting the room occupancy tax. Several towns require that short-term rental owners also register locally, but there is a sharp difference between the number of properties registered locally and those registered with the state.

In Chatham, for instance, the state registry lists 1,531 short-term rentals (STR). Yet the town’s registry, which opened earlier this year, has 525 properties registered as of last week, barely more than a third of the number registered with the state.

The figures are similar — or worse — in other towns. The state registry lists 1,114 STRs in Harwich, while the town has registered just 233. In Orleans, the state lists 862 STRs, while the town’s registry has recorded 230.

The state database lists 1,160 STRs in Brewster; the town does not regulate short-term rentals at this time. Petition articles to create a short-term rental registry were postponed at the May 11 annual town meeting.

Chatham’s registry was approved by the board of health last year, and STR owners were required to file for a permit by Feb. 28 for the rental season beginning March 1. The regulations specifically require that any STR registered with the state must also be registered locally.

Health Agent Judith Giorgio isn’t surprised that compliance is lagging given that this is the first year the regulations have been in place locally. Two weeks ago, the town hired Karen Chimwaza as its new housing inspector, and part of her job will be to compile a list of STRs registered with the state that have not done so with the town and reach out to the owners.

“That’s a process,” commented Giorgio. Chimwaza said she’s also reached out to local realtors to make sure they are aware of the registration requirement.

Short-term rentals are defined as any rental less than 31 days. The state began collecting the 5.7 percent room tax, previously only applied to hotels, inns and bed and breakfasts, on STRs in July 2019. Barnstable, Dukes and Nantucket counties also impose an additional 2.75 percent room tax for the Cape Cod and Islands Water Protection Fund, which awards money for wastewater and water pollution abatement projects in local towns. Chatham alone has been awarded more than $6 million to help pay existing wastewater debt.

Towns can also impose a local occupancy tax of up to 6 percent. Chatham’s 4 percent surcharge was increased to 6 percent in 2022, with the revenue from the additional 2 percent split between elementary school costs and housing programs.

In Harwich, registration is required for rentals of less than 90 days. In all three towns, inspections aren’t required as part of the registration process, but owners must certify that smoke and CO detectors are in working order and that buildings are in compliance with current building codes. Giorgio said inspections will be done in Chatham if complaints are filed.

While in Chatham the health department oversees STR registration, the building department handles the task in Harwich and the assessing department in Orleans accepts registration for both short- and long-term rentals.

Complaints about overcrowding and noise brought short-term rentals to the attention of officials several years ago. Concerns have also been raised about corporations owning residential real estate specifically for short-term rental purposes. This has led many to question the legality of what many see as a business operating in residential districts, where commercial activity isn’t allowed.

Eyes are now on Nantucket, where a state land court ruled earlier this year that short-term rentals were not allowed as a primary use in residential districts under the town’s zoning bylaw. The case was remanded to the zoning board of appeals, which must determine if the particular property that was the subject of the original appeal can be considered a primary or accessory use. A hearing is scheduled for June 3. Nantucket also passed a town meeting article banning corporate ownership of STRs.

The land court ruling won’t impact local towns, at least not immediately. Chatham’s zoning bylaw does not list short-term rentals as a separate use, and commercial activities, including hotels, motels and inns, are not allowed in residential districts.

The Chatham Board of Health’s motivation for instituting STR registrations was mostly about safety, Giorgio said, to ensure that rentals were up to health and safety codes.

“It’s getting everyone legal,” she said.

Having specific regulations in place allows officials to better respond to complaints about STRs, she added. “Before there were no rules to follow up on,” she said.

Currently, Chatham’s STR database is not available to the public. The state department of revenue’s website includes a tool to find local short-term rentals by address, but the names of owners are not listed. Ownership data can be found on town assessors listings, which are available online. Residents can call the health department and check if an address is listed in the STR database.

While Chatham has a $50 registration fee, there is right now no penalty for not registering. Harwich and Orleans do not charge a registration fee or impose a penalty for violations.

Chatham’s short-term rental regulations require that the health board conduct a comprehensive review of the regulation after three years.

“Right now I don’t really see anything that we need to change,” Giorgio said, adding that could change if complaints are filed and subsequent inspections unearth problems currently not addressed in the regulations.

Regulations and STR registration forms are available on the Chatham, Harwich and Orleans town websites.