A group of short-term rental property owners in Burlington is suing the city, arguing that restrictions implemented last year are against the law.
The lawsuit sets up a challenge to the city’s short-term rental ordinance, which sought to clamp down on those who rent out properties using such services as Airbnb and VRBO. Property owners say the city lacks authority to restrict the length of time a residence is rented.
About a dozen property owners filed the suit in early July in Chittenden Superior civil court. News of the lawsuit was first reported this week by Seven Days.
Plaintiffs in the case include three individuals — Sean Hurley, Kristin Baker and Petra Winslow — and a number of companies. The properties listed in the suit are mostly located in the city’s Old North End.
All plaintiffs are represented by attorneys Liam Murphy and AJ LaRosa of the Burlington law firm MSK. LaRosa is the chair of the city’s Development Review Board. Reached by phone on Friday, he declined to comment.
Last year, the Burlington City Council approved sweeping restrictions on short-term rentals in the city. The ordinance prohibits short-term rentals unless they are owner-occupied, and it defines a short-term rental as a dwelling rented to guests for fewer than 30 consecutive days.
There are limited exceptions. Property owners can rent a whole unit on a short-term basis if they meet certain inclusionary zoning requirements. They are also allowed to rent “accessory dwelling units” — residential units built on the same property as a primary residence.
The penalty for noncompliance starts with a $100 civil fine, according to the Burlington housing ordinance. A second offense is $200.
As the city worked to ramp up enforcement on property owners who failed to comply with the short-term rental ordinance, the property owners’ attorneys wrote that enforcement would have a “substantial impact on Plaintiffs’ financial stability and greatly harm Plaintiffs’ business interest,” according to the complaint.
The property owners’ attorneys outlined their arguments in an amended version of the complaint filed on Aug. 1.
They wrote that short-term rentals were allowed prior to last year’s ordinance change and their uses should be allowed to continue so long as their operations aren’t “expanded or enlarged.” Attorneys also argued that Burlington doesn’t have the authority to regulate the length of a residential use either under state law or one of its own housing ordinances.
Attorneys are asking the court to both allow their clients’ short-term rentals to continue as well as declare that the city doesn’t have the authority to regulate the “length and nature” of rentals or to require owner-occupancy.
The city of Burlington has yet to file an official response to the complaint. Acting City Attorney Kimberlee Sturtevant did not respond to requests for comment.
Mayor Miro Weinberger said in an emailed statement on Friday that the city’s authority to regulate short-term rental has precedent from other municipalities and he was confident the city would prevail in the lawsuit.
“Our short term rental ordinance was carefully crafted with significant public process and engagement over the course of several years,” Weinberger said in the statement. “I believe it strikes the right balance between allowing homeowners flexibility with their properties while limiting the impact of Short-Term Rentals on Burlington’s long-term housing supply.”
The ordinance went into effect in August 2022. Earlier this year, Bill Ward, director of the Department of Permitting and Inspections, gave a six-month update to the city council in a memo, pointing out difficulties getting property owners to voluntarily register their short-term rentals.
“The initial low voluntary registration numbers were a major challenge,” Ward wrote in the memo. He also said the city had reached out to hosts at the time only via the municipality’s website. When permitting and inspections department employees began to speak with hosts, they learned of “a great deal of confusion” about the city’s short-term rental policies. Most expected to receive direct instructions from the city. Some who already had a “bed and breakfast” permit thought a new registration wouldn’t be necessary, according to Ward.
He noted that the city had worked with a third-party vendor called Host Compliance to help identify short-term rental units. Host Compliance data cited by the city found that short-term rentals peaked in 2019 at over 400 units. By last November, the vendor said that number had fallen to 286, but at the same time the city had only 74 units registered.
