Short-Term Rental Work Group Settles On Bylaw Proposals

Nantucket’s Short-Term Rental Work Group has finalized its proposal for new regulations on short-term vacation rentals on Nantucket, agreeing to put forward a series of bylaws for voters to consider at a special town meeting in November.

“I’m really pleased that we were able to come to a consensus,” Jim Sulzer, a member of the Short-Term Rental Work Group, said. “I think that we’ve found a good middle ground that preserves property rights but also will help to preserve neighborhoods and their integrity.”

The bylaws would limit short-term rental (STR) operators to renting a single property, though they could rent multiple dwellings on the property as long as they are rented to the same party under the same contract. They would also block corporate ownership unless every shareholder or partner is a “natural person”—meaning an actual human being and not a corporate entity—and legalize STRs by right across the island. Additionally, the proposed regulations would block STRs in units that are deed restricted for affordable or attainable housing and limit STRs to a maximum of four weeks in apartments. In most cases, even if the bylaws are passed by voters, they won’t affect existing STRs as they would be considered “grandfathered.”

Of course, there is no guarantee that the bylaws do pass at Town Meeting, as island voters for past three years have rejected several STR-related proposals from citizens and the Planning Board.

“Hopefully the voters appreciate what we’ve done and give it a passing vote,” said David Iverson, vice chair of the Planning Board and a member of the Short-Term Rental Work Group.

But he admitted that gaining the approval of voters would be difficult.

“There’s a camp that says codification [of STRs by right] in zoning is the end of the world and then there’s the other camp that says [the proposed bylaws] are too much regulation and we don’t need them,” he said. “I guess the question comes down to us as a town: do we want a judge to tell us how we do this, or do we want to be in the driver’s seat?”

The two main bylaws being recommended by the work group — a general bylaw that sets out the group’s proposed restrictions and a zoning bylaw that legalizes STRs by right across the island — are tied together and will only go into effect if both pass. Zoning bylaws require a two-thirds majority vote, a high bar given the island’s sharp division on STRs. But, after a lengthy deliberation process that extended well beyond the initial deadline, the bylaws cleared the first hurdle on Tuesday when all of them received the support of at least seven of the Short-Term Rental Work Group’s nine members.

“We’re going to have a big challenge to get this passed,” Sulzer admitted.

One of the more daunting parts of that challenge, he added, would be persuading the supporter of the political action group ACK•Now, which despite having a representative in the Short-Term Rental Work Group, was ultimately not in favor of the package of bylaws it produced. Chief among their concerns is the codification of STRs by right across the island.

But many members of the Short-Term Rental Work Group felt that allowing STRs by right was the only path forward.

“I think that ACK Now has a very specific desire when it comes to STRs that wasn’t practical for us as a group to adopt and in my opinion isn’t practical for the Town to adopt,” Iverson said. “They’ve drawn their line and that’s how they feel and they aren’t really willing to bend.”

The most significant change to the earlier draft of the bylaws involves a complicated clause that has created perhaps more conflict than any other. To reduce turnover or “churn” in residential neighborhoods, the Short-Term Rental Work Group agreed to limit even existing STRs to nine occupancy changes during July and August. But once an STR is sold, that drops to four for a period of five years, at which point it reverts to nine. In the earlier draft, dwellings with a residential tax exemption were excepted from the reduction, which several members of the group felt was unfair to seasonal residents and potentially not legally viable.

To limit controversy and circumvent legal challenges, that exception has been carved out from the main bylaw and will have to pass or fail on its own merits. The requirements for receiving the exception have also been loosened slightly: instead of requiring a residential tax exemption for the dwelling in question, the bylaw would now just require the property owner to prove they are residing on the island for more than six months out of the year.

“If you use the verb residing that doesn’t mean they’re residents, so it doesn’t shut out people who live in another state,” Sulzer explained. In theory, this could help the exception avoid constitutional challenges under the commerce clause, which prevents states from restricting interstate commerce and delegates that power to Congress.

“I feel strongly that even though it may not be equal, it’s fair,” Iverson said of the exception. ”We need to preserve our community and do everything we can to help locals buy homes in our community and stay here.”

The updated version of the bylaws also excepts cottage colonies, defined as “a group of four or more detached dwellings…on a single lot, which is customarily occupied on a seasonal basis,” from all limits on occupancy changes.