Short-Term Rental "Compromise" To Ban Corporate Ownership Endorsed By Select Board

Potential restrictions on short-term vacation rentals will yet again be a major focus at Nantucket’s upcoming Annual Town Meeting, and the Select Board on Wednesday endorsed what it called a compromise proposal with the authors of two competing citizen petitions related to the controversial issue.

On a 3-1 vote, with Matt Fee opposed and chair Dawn Hill Holdgate recused, the Select Board formally backed the compromise general bylaw amendment that would prohibit corporate ownership of short-term rentals while grandfathering all those that existed before Jan. 1, 2024. It would also prohibit new short-term rentals in timeshares and in housing units designated as affordable housing or income-restricted.

On Thursday, the Finance Committee voted unanimously to recommend the compromise warrant article to Town Meeting voters.

The deal was reached by a small group that included town counsel John Giorgio working with citizen petition sponsors Steven Cohen and Michael Kopko, along with Select Board vice chair Brooke Mohr and Finance Committee chair Denise Kronau. The compromise represented a melding of two competing citizen petitions with the Select Board’s own short-term rental bylaw amendment it had proposed for the Annual Town Meeting.

The bylaw amendment would define a corporation as: “All businesses and charitable entities required to file Articles of Incorporation and Annual Reports with the Massachusetts Secretary of State or an equivalent agency of another state.”

During Wednesday night’s meeting, several town officials emphasized that the compromise proposal was not as restrictive or far-reaching as prior warrant articles considered by Town Meeting, but was a start and one they considered to be “better than nothing.”

“There was a fair amount of discussion about what exactly this would prevent, and it may turn out to be a very small corner of the market, but the idea was this was a worthy proposal to bring forward to Town Meeting,” Giorgio said. “It isn’t what everyone wants, but it’s definitely a first step and addresses some serious concerns with regard to corporate ownership and the loss of housing.”

The upcoming Annual Town Meeting set for Tuesday, May 7th, will mark the fifth straight town meeting (including special town meetings) in which short-term rentals have taken center stage. In November 2023, island voters found no consensus on how or whether to restrict short-term rentals during a Special Town Meeting, as a pair of bylaw proposals that had been carefully crafted by the town’s Short-Term Rental Work Group were defeated.

Kopko, a former Select Board member, spoke out during the 2023 Special Town Meeting against those proposals and urged the town to return with a more simple warrant article for voters to consider. He submitted his own citizen petition but said Wednesday that he was in favor of the compromise crafted with Cohen and town officials.

“One of the problems we’ve had is that everyone is running around trying to get their fingers in every hole in the dike, and that’s why we're where we are now,” Kopko said. “I feel really strongly that we have to get an article that has some effect passed at this meeting, for a lot of reasons…It (the compromise warrant article) is an expression of what the community wants and it provides a basis for us going forward and it addresses what I consider the primary issue to address here, which is corporate ownership of short-term rental and those effects on residential neighborhoods.”

Select Board member Matt Fee was the lone voice of dissent during Wednesday night’s meeting, stating “Sure this will pass because it has no teeth. I don’t think it’s doing anything.” Fee had hoped to see Kopko’s original citizen petition, which would have similarly banned corporate ownership but also limited the number of short-term rentals allowed to two per person, move forward to Town Meeting.

“The Select Board short-term rental ‘compromise’ is anything but,” Fee said the day after the meeting in a message to the Current. “When one side gets what they want and the other doesn’t, it’s not a compromise. Calling it one doesn’t make it true. A better description is it’s a consolidation of competing articles. And unfortunately, a capitulation by Michael Kopko, whose idea of limiting natural person entities to two rentals was a step in the right direction. It’s an illusion of action. Maybe we vote and feel good about ‘doing something’ but the reality is allowing all pre-existing, including corporations, and placing no limitations on natural person entities, protects the investor class at the expense of the community, working and middle class.”

A good portion of Wednesday night’s discussion centered around a companion citizen petition - a zoning bylaw amendment also filed by Cohen - which would codify short-term rentals as an allowed use in all zoning districts on Nantucket. Similar warrant articles have been proposed over the past three years but were either defeated or tabled.

As part of the negotiations on the compromise general bylaw amendment, Cohen agreed that he would offer a motion to take no action on his zoning proposal, provided there is not a “negative” decision in the pending Massachusetts Land Court case involving Nantucket short-term rentals before Town Meeting. If there is a decision by Judge Michael Vhay that in some way restricts short-term rentals based on zoning, Cohen would reserve the right to move forward with the warrant article, which has a positive motion from the Planning Board but remains controversial.

Select Board member Brooke Mohr, who was among the members of the small group that crafted the compromise, stated that she viewed it merely as a start and that further measures could be considered following the implementation of the town’s much-delayed short-term rental registration system.

“This is not as far as I would prefer to go as far as regulating short-term rentals,” Mohr said. “I was super supportive of some of the provisions we saw at the Special Town Meeting, but what we saw was that it was so complex, people’s heads were spinning. What we talked about in this small group is trying to simplify this as a first step to get the community to understand some elements of the short-term rental market, the ones we felt there was general consensus on, as a first step. This is not the endpoint as far as I’m concerned. But also know once we have the platform up and registration and have more details on ownership and who’s short-term renting, then we can say what is the impact and what needs to be limited…I’d rather get something passed than go another round where people are so confused that nothing happens.”

Below, the text of the compromise short-term rental bylaw amendment is highlighted: