Just over a week after Nantucket voters rejected a proposal to restrict short-term vacation rentals on the island, the town working group charged with finding consensus on the divisive issue got its first look at a potential compromise bylaw last night.
Developed by town counsel John Giorgio and based on the Short-Term Rental Working Group’s discussions that have been ongoing since last October, the draft bylaw mimics much of what was recently adopted by the town of Great Barrington in western Massachusetts.
Under the proposed general bylaw amendment, individuals would be permitted to operate no more than two dwelling units as short-term rentals on the same or separate properties, and corporations would be prohibited from operating short-term rentals on Nantucket. Limited liability companies - known as LLCs - and trusts would only be allowed to run short-term rentals if every shareholder, partner, or member is a “natural person.”
All pre-existing short-term rentals - whether they’re run by a corporation or by an individual with multiple short-term rental properties - would be allowed to continue to operate under the new bylaw, a so-called “grandfathering” provision that was hotly debated by the working group. Giorgio said the provision would reduce the town’s risk of litigation by entities that could challenge the bylaw by making constitutional claims such as a regulatory taking and the interstate commerce clause.
“These are pretty significant restrictions on corporate ownership of short-term rentals,” Giorgio said Tuesday night. “We need to articulate a legitimate legislative purpose for treating different classes of ownership differently.”
That purpose would be laid out in several statements to be added to Chapter 123 of the town’s general bylaw “to articulate the legitimate interest the town has in enacting the amendments,” according to Giorgio. Those statements include a goal to “limit the conversion of residential units to short-term rentals which has had the deleterious effect of removing residential units from the available year-round rental housing stock; and provide a regulatory structure that reduces the threat of litigation challenging short-term rental use by full-time and part-time residents.”
Julia Lindner, the executive director of the political action group ACK Now and a member of the working group, said allowing existing corporate short-term rental owners to continue to operate under the new bylaw would be a tough pill for voters to swallow.
“The idea to legalize the corporate short-term rentals is a hard thing to pass along to the voters,” Lindner said, suggesting a potential sunset clause that would apply to the new bylaw to pre-existing corporate owners after a certain number of years.
Working group member Jim Sulzer said the draft byaw was “sort of thrilling to see, feeling that we’ve put out some ideas and there they were, clothed in the bylaw language.”
The proposed Nantucket bylaw amendment was modeled after what the voters of Great Barrington, a tourist destination in the Berkshire Mountains, passed last year. That bylaw was recently approved by the Massachusetts Attorney General’s office.
Giorgio said the plan is that the general bylaw amendment would only approved if a companion zoning bylaw amendment is also endorsed by a two-thirds vote of the November Special Town Meeting, and is approved by the Attorney General.
That companion bylaw amendment would define short-term rentals as an allowable use in all zoning districts on Nantucket.
Work group facilitator Stacie Smith emphasized that "all of these materials are simply works in progress for the group."
A good portion of the work group's meeting on Tuesday centered around the concept of a potential short-term rental cap, and the implications for existing property owners who do not currently short-term rent their properties, but may wish to in the future.
"I see a cap as a doomsday scenario," Sulzer said.
Others were skeptical as well.
It’s going to breed infighting among the electorate," said working group member Peter Kahn, who represents the Nantucket Advisory Committee of Non-Voting Taxpayers. "Let’s take it one step at a time. I wouldn’t cap it , let’s see how we do with the grandfathering."
The Short-Term Rental Working group also received a presentation on data gathered by its consulting firm Process First. You can see the full presentation here.
The short-term rental working group will meet again on May 30th