BURLINGTON — Two and a half years into debating how to regulate the type of lodging advertised on sites such as Airbnb and Vrbo, the city is set to clamp down on its short-term rental industry.
In an 8-2 vote, the Burlington City Council passed an ordinance Monday night disqualifying up to 80% of the city’s short-term rentals, since they occupy an entire house, apartment or condo.
Of Burlington’s 250 to 300 short-term rentals, roughly 81% are entire units, according to city-provided data. Those units — unless they meet exceptions the council carved out to promote affordable housing — are soon set to violate the city’s housing codes.
As a result, short-term rental hosts can only put rooms in their primary residence on the market, excepting those few conditions.
The most significant exception allows for landlords who own a building with multiple units to lease one of them as a whole-unit short-term rental, provided the building also contains a unit that houses a resident who meets the city’s “inclusionary zoning” standard, or someone receiving federal or state housing assistance.
Properties that are only outfitted for the warmer months and “accessory dwelling units” — residential units, such as in-law suites, that are built on the property of an existing home — are also exempt from the ban, according to the ordinance.
In addition to restricting how many and what type of short-term rentals a host can operate, the ordinance places a 9% tax on such listings. That revenue will be directed to a city fund dedicated to the development of affordable housing.
The ordinance still has to receive a signature from Democratic Mayor Miro Weinberger and get vetted by the Planning Commission before it is enacted.
The ordinance was almost identical to a proposal that councilors struck down in March. But after Weinberger vetoed a Progressive-backed measure that would have cracked down even harder on short-term rentals, Councilor Joe Magee, P-Ward 3, switched sides and voted “yes” on Monday.
Councilor Gene Bergman, P-Ward 2, said he opposed the exemptions offered by the ordinance, but voted for it anyway, praising its establishment of a registry for short-term rentals.
Councilors Jack Hanson, P-East District, and Joan Shannon, D-South District, voted against the ordinance, saying it did not go far enough in regulating the industry. (Councilors Ali House, P-Ward 8, and Perri Freeman, P-Central District, were absent).
Shannon, who spearheaded the stricter ordinance that Weinberger vetoed, expressed support for the current framework of short-term rental regulation, which requires the properties to receive permits as owner-occupied “bed-and-breakfasts.”
In addition to owner occupancy, bed-and-breakfasts must go through a public application process that involves the city’s development review board. Getting rid of that requirement, Shannon warned her colleagues, would prevent neighbors from weighing in on the potential for a short-term rental opening next to them.
“Short-term rentals will be given an even higher status by this exemption and will join only two other high-priority uses that the city wants to encourage, which are day cares and urban agriculture,” Shannon said.
But proponents said the ordinance would balance the demand for hotel alternatives with the city’s desperate need for affordable housing. Officials say Burlington has a less than 1% vacancy rate for long-term rentals.
“There are significant benefits with the presence of short-term rental units,” said Councilor Ben Traverse, D-Ward 5, who sponsored the ordinance. “On the other side of this issue, we do have a housing crisis. And I do think it’s important that this council take action to address that crisis and to increase the city’s housing stock.”
Julie Marks, founder and director of the Vermont Short-Term Rental Alliance, applauded the ordinance’s affordable housing provisions. But in a statement to VTDigger after the meeting, she said her group did not support the 9% tax levied on short-term rentals, arguing that the percentage was unfair when compared to the 2% tax rate on hotel rooms.
“The (Alliance) does not support the unbalanced tax burden on visitors who desire to stay in vacation rentals instead of hotels,” Marks said. “That doesn’t align with the sentiment of ‘leveling the playing field.’”
Traverse and the ordinance’s supporters said the ordinance will not resolve Burlington’s housing crisis. But, they said, it was a step in the right direction.
“The best thing we can do for the housing crisis is to take action on something tonight so that we can move to bigger issues that will have more impact,” Traverse said.