Callaghan & Callaghan – Attorneys – Rhode Island



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Short Term Rentals Raise Long Term Legal Issues – Rhode Island



In the past few years short term rentals have become a widespread legal issue. Residents have fought the short term rental rise in Austin, Malibu, and Santa Monica. Today voters in San Francisco will decide whether limits on short term rentals will become law. Proposition F asks if short term rentals should be limited to a maximum of 75 days per year.

The issue came to a head in San Francisco because the rise of the web-based short term rental option has decreased the availability of long term rental units. As a result, yearly rental costs have skyrocketed. The going rate for a one bedroom within the city is $4000.00(!) per month.

AirBnB, VRBO, and Homeaway are just a few of of the industry leaders in short term rentals. The San Francisco ballot measure, casually known as the “Airbnb initiative” has resulted in full scale campaigns – both for and against.

AirBnB, valued at $25 billion (that’s right, billion), has spent millions denouncing the effort. The law would hit Airbnb in its backyard, as the company is based in San Francisco.

Proposition F comes on the heels of another similar measure in Santa Monica. Earlier this year the Santa Monica City Council outlawed short term rentals for thirty days or less. Home share rentals, with a landlord on site, are allowed but there are other restrictions.

Santa Monica passed its ordinance because long term rental units were being phased out. City Councilors cited noise complaints, trash, and other quality of life issues when limiting short term rentals. Ordinance violations have been classified as misdemeanors.

The main practical issue in these types of ordinances appears to be enforcement. Registration, inspections, code enforcement, and administrative costs all cost money. Extra staff and additional offices would appear necessary to enforce any new law. Additionally, in San Francisco, the ordinance puts some of the onus on the rental websites. The websites are actually forced to monitor the 75 day rental limit rule.

Despite the convenience of short term rentals for landlords and vacationers, there are collateral consequences. Homes treated as hotels or B&B’s violate the spirit, if not the letter, of zoning laws. Local ordinances applied to hotels and B&B’s do not particularly address the short term rental unit issue. The unanticipated industry has forced families and neighborhoods to grapple with a nightly influx of noise, cars, trash, and parties.

The issue has not gained much traction in Rhode Island – yet. It appears it is only a matter of time before the short term rental issue travels from San Francisco, Santa Monica, and Austin to Newport and Narragansett.