Select Board Votes To Send New Short-Term Rental Regulations To Town Meeting

The Select Board voted 4-1 on Wednesday to approve the warrant for November’s Special Town Meeting, including a revised version of the Short-Term Rental Work Group’s proposed regulations for short-term vacation rentals on Nantucket. The revisions would reduce the number of changes in occupancy - or rental contracts - that operators of short-term rentals (STRs) created after this summer would be allowed each year and slightly tighten the requirements for applying the regulations’ broad grandfathering provision.

Over the past month, Select Board members Matt Fee and Malcolm MacNab have repeatedly voiced their concerns with the proposed bylaws, which they claim will do little to change the status quo. But after securing two revisions he has long championed at Wednesday’s meeting, Fee voted in favor of adopting the warrant—though he reiterated his opposition to several elements of the proposal.

Select Board member Tom Dixon, who served on the Work Group, and vice chair Brooke Mohr have both supported the regulations from the beginning, arguing that, while not perfect, they are a strong first step and the best way to unite voters.

Alone in his dissent, MacNab outlined a much stricter approach to STR regulation.

“Commercial enterprises should not be in residential neighborhoods, period,” he said.

The regulations now must garner two-thirds support at the November Special Town Meeting before they can become law. This could prove difficult, as opposition groups have already begun to mobilize voters, submitting opinion pieces to local news outlets and mass-mailing letters to homes across the island. But, after weeks of debate, one important hurdle has been cleared: the regulations, though somewhat altered, will be presented to voters this fall. This gives their supporters the chance to make their case to the public.

“[The regulations] will help control STR growth and churn, eliminate new corporate STRs, and weed out commercial STRs legally and in ways that will withstand challenge,” former Work Group member Jim Sulzer said.

The bylaws would limit short-term rental (STR) operators to renting a single property, block corporate ownership unless every shareholder or partner is a “natural person”, and block STRs in units that are deed restricted for affordable or attainable housing, among other restrictions.

Before the vote to adopt the warrant, the Select Board—without chair Dawn Hill Holdgate, who was recused — debated several changes to the bylaws.

Under the initial proposed regulations, all STRs would be limited to nine changes in occupancy - or rental contracts - each summer and new STRs would be limited to four contracts for five years, at which point the limit would revert to nine. Fee suggested capping new STRs at four changes in occupancy each summer permanently to disincentivize investors from buying up local housing stock to rent short-term. The Select Board voted unanimously to support that change, with the understanding that anyone could make a motion to undo it at Town Meeting—which would not have been possible in reverse, as Town Meeting motions can only make proposed bylaws less strict, not more strict.

The initial draft would have also allowed anyone to register their home as an STR in the 60 days after the local registry is created and be exempted under the regulations’ grandfathering provision. Fee and MacNab both expressed concerns at previous meetings that this would lead to a rush to the registry, where anyone even considering renting short-term would register their home. To alleviate those concerns, Mohr suggested requiring proof that operators have previously paid taxes on STR income from the property for it to be grandfathered. Her alteration passed three to one, with MacNab, who did not find it strict enough, opposed.

On Giorgio’s advice, the Select Board also voted unanimously to strike a warrant article that would have allowed STR operators who reside on the island for six months or more to have nine occupancy changes per summer for new STRs. The article, designed to benefit locals who use STRs to pay housing costs, may have been subject to constitutional challenges under the commerce clause.

“On balance, my recommendation is that you do not go through with [the article] at the special town meeting,” Giorgio said. “There’s a better than 50 percent chance this could be subjected to a successful legal challenge.”

But attempts by Fee and MacNab to alter the regulations more dramatically by sunsetting the grandfathering provision entirely and eliminating the provision that allows for STRs by right across the island were unsuccessful, as tied votes result in defeat for those proposed motions.

Fee’s opposition to the zoning bylaw that allows STRs by right has been at the center of his criticisms of the regulations, and it was clear that the concessions he won on other issues were not enough to alleviate his concerns. Still, he voted to send the regulations to the voters.

After the warrant was adopted, the Select Board voted to terminate the Town’s contract with Granicus, the firm hired to create a local STR registry. Town staff said it had become clear Granicus could not deliver the registry, and they were looking into alternative vendors. That means the registry - which was supposed to have begun earlier this year - will likely not get off the ground until early 2024.

If any Select Board members have concerns with the specific language Giorgio drafts for the revisions to the warrant, a special Select Board meeting may be held next Wednesday. Otherwise, the Select Board will not meet.