Town Counsel Red Flags Article 60 As Short-Term Rental Debate Rages

Article 60 - a proposed zoning regulation to limit short-term rentals on Nantucket - has been hotly debated for months now ahead of Nantucket’s Annual Town Meeting in May. And this week, Nantucket’s town counsel John Giorgio weighed in with his opinion on the controversial proposal, raising several red flags about what it could mean for the island and any future efforts to regulate short-term rentals.

Giorgio - who addressed the Select Board on Wednesday and the town’s Short-Term Rental Work Group on Thursday - said that Article 60, as a zoning bylaw, would be subject to “grandfathering” protections under state law, meaning it would not apply to the thousands of existing short-term rentals on Nantucket operating now if it were to be approved by voters.

Another concern, Giorgio said, is that adopting Article 60 could limit the town’s ability to regulation the location and number of registered short-term rentals through a general bylaw in the future “since a general bylaw cannot have the effect of prohibiting a use expressly allowed under the zoning bylaw,” Giorgio advised the Select Board.

In my view, it’s better to come up with a comprehensive scheme to regulate short-term rentals through a general bylaw than prematurely enact a zoning bylaw that could limit your options in the future,” Giorgio said. “This is not something that the town should leave to citizens to draft.”

Town counsel’s warnings come less than a month before voters will consider Article 60 at the Annual Town on May 6th.

The warrant article proposed by Emmy Kilvert - which has generated intense debate and even prompted the online vacation rental giant VRBO to jump into the mix and lobby against it - is the latest in a succession of citizen petitions spear-headed by the political action group ACK Now to curtail short-term rentals on the island. None, so far, have passed.

Kilvert and the proponents of Article 60 define it this way: “Article 60 is a zoning amendment that legalizes STRs in residential neighborhoods under one simple condition – STR (short-term rentals) use must be less than residential use. (Residential use means any use by the owner for any length of time or any rental longer than 31 days). Long-term rentals (>31 days) by homeowners or commercial interests are not affected. Prohibits strictly commercial STR businesses in residential districts.”

A day after Giorgio’s remarks to the Select Board, Kilvert said she was skeptical of his interpretation of the law, especially with regards to his suggestion that all existing short-term rentals would be grandfathered if Article 60 were to be approved.

“To the extent that Town Counsel is suggesting that the passage of Article 60 would somehow trigger ‘grandfathering’ (a term that is typically discouraged) protections for commercial STRs in residential neighborhoods, that’s simply incorrect,” Kilvert said in an e-mail message to the Current. “So-called ‘grandfathering’ is only triggered when a use is explicitly permitted under the bylaw and then later prohibited by a zoning amendment or change. This is pretty clear in zoning law. And, regardless of your position on Article 60, I think we can all agree that Nantucket’s zoning bylaw does not explicitly reference short-term rentals anywhere. In fact, if STRs are already allowed under our current zoning, as the Town Counsel suggests, the Planning Board-sponsored zoning article from last year to allow STRs island wide would not have been needed.”

In addition to his concerns regarding grandfathering and Article 60’s potential impact on future attempts to regulate short-term rentals, Giorgio also suggested the proposed zoning bylaw continued “certain ambiguities” including:

• Missing language to properly integrate the new regulations into the existing Zoning Bylaw
• The absence of any definition of the term “short-term rental.”
• That the bylaw uses the term “owner-occupied,” but does not define that term.
• The proposed bylaw’s requirement that short-term rentals be owner-occupied for at least six months, which he said is inconsistent with the existing Section 139-2 of the Nantucket zoning bylaw which defines owner-occupied with a reference to occupancy for at least three months of the year.

Kilvert also pushed back against those legal opinions.

“Mr. Giorgio raised other concerns over what he calls ‘ambiguities’ which are equally unfounded,” she said. “We would expect our Town Counsel to be aware that ‘short-term rentals’ are already defined in the General Bylaw and it is not unusual at all for the zoning bylaws to look to the General Bylaws for definitions (and vice versa). In sum, however, I agree with Town Counsel that Article 60 is the only proposed legislative fix that squarely deals with the status of short-term rentals on Nantucket.”

During Thursday's Short-Term Rental Work Group meeting, Giorgio was asked directly if short-term rentals are legal - a question which has been on the forefront in recent days given a recent mailing about Article 60.

"Your building commissioner and ZBA have made a decision that short-term rentals are a legal use, and they’ve denied zoning enforcement," Giorgio said. "It’s hard to predict how a court is going to rule. My recommendation, and I don’t think we’ll have a final decision in the courts in the fall, is to adopt a comprehensive zoning regulation to eliminate the legal jeopardy that so many people are in with this (lawsuits) hanging over their heads…It's a bad idea to place your fate in someone else’s hands."

After hearing from Giorgio at the end of Wednesday’s meeting, the Select Board felt the need to reiterate its position on Article 60 and then some. The board had previously decided to support the Planning Board’s motion on the article which is “not to adopt” in deference to the ongoing work of the Short-Term Rental Work Group, which is expected to bring forth a compromise proposal during a Special Town Meeting this fall. But on Wednesday, the Select Board voted unanimously to issue a press release urging voters to take no action on Article 60 or any other proposal that deals with short-term rentals. As of Thursday evening, the press release had not yet been completed.