Hefty STR Fee Hike Planned

CHATHAM – Officials are recommending a steep hike in the short-term rental registration fee to cover the cost of complying with annual inspections required under a recent update to the state building code.
The select board voted March 24 to raise the registration fee from $50 to $200. Revenue from the increase will cover the cost of hiring a new building inspector to perform the additional inspections required under the new building code.
The town has a significant number of short-term rental (STR) properties; 939 were registered last year, nearly 13 percent of Chatham’s total residential units. Last year, only 289 of those properties were inspected. The town’s regulations require that all STRs be registered with the health department, but inspections have been conducted on a rolling basis. The 10th edition of the state building code, issued last July, requires that inspections be done by a certified building official annually.
In addition, the Maggie Hubbard Rental Safety Act, currently pending before the legislature, would also require annual inspections by the fire department. The proposed law was prompted by the death of Brewster residents Shannon Hubbard and her daughter Maggie in a fire in New York state in 2024. The family was staying at a short-term rental that local officials said did not have functioning smoke alarms. 
The operating budget that goes before town meeting May 14 includes $75,520 for a new local inspector who would be tasked with annual STR inspections. Together with the salary of short-term rental administrator and inspector Karen Chimwaza, staffing costs total $151,040 annually, according to a memo. 
The current $50 registration fee would result in a $105,090 shortfall. Raising the fee to $200 would leave a small surplus that would address annual variations in the number of registrations as well as annual salary adjustments. Registration fees have grown over the two years since the program was established. In 2023 fees amounted to $3,900, and last year the total collected was $46,000. STRs also contributed $2.5 million in revenue to the town through the room occupancy tax.
Even at $200, the town’s STR registration fee would be lower than what most other Cape towns charge, which range from $25 in Mashpee to $750 in Provincetown.
Most STR owners are cooperative when it comes to inspections, said Chimwaza. “For the most part it’s accepted as part of the business of renting,” she said. Several STR owners have been fined for failing to register, she added.
Board member Cory Metters agreed that the $50 feet is “ridiculously low.” The $200 fee is “extremely affordable,” added board member Shareen Davis, noting that she favored a one-time increase rather than phasing it in over a few years.
“I think it should be more,” she said.
The select board’s unanimous vote asks the health board to increase the fee and align the renewal period to coincide with the calendar year. Currently renewals are due at the end of February.
The health board has not yet scheduled a hearing on the rate increase.