Short-term rentals

Best practices for VT communities considering regulation of short-term rentals

• Collaborate with neighboring towns (Act regionally)  

  • Vermont towns do not operate in a vacuum.  For example, if a town in a ski area prohibits many types of STRs and a neighboring town does not, the number of STRs is likely to grow in the neighboring town.  
  • Forming agreement among towns in a region before setting municipal STR policy will increase the likelihood of reaching intended outcomes.  

• Understand the scope and trends of your area’s STR market  

  • Does the number and percentage of homes in your area that are used as an STR warrant the time and enforcement that will be required of additional regulation?  
  • Is the percentage of homes in your area used as STRs over time increasing or decreasing?  
  • Resources: https://www.housingdata.org/profile/housing-stock/short-term-rentals   

• Set explicit policy objectives first  

  • What larger municipal strategic objectives are related to STRs?    
  • Increase homes available for incoming new year-round residents
  • Increase earnings and income for residents
  • Reduce likelihood of “party houses”
  • Reduce likelihood of investors from out of the area from purchasing homes for STRs that would otherwise be critical elements of the local housing supply
  • Resources:  https://granicus.com/pdfs/Whitepaper-A-practical-guide-to-effectively-r…

• Identify existing town and state regulations that apply to STRs

  • Does your town have local rental registry and/or building codes?  
  • What types of STRs are currently covered by theses? Are they considered “rental housing”?  
  • How does your town define B and Bs?  
  • What types of STRs are covered as B and Bs?  
  • Are B and Bs limited to certain neighborhoods?  
  • What fees are currently in place? (Local options tax, others?)
  • What are gaps between policy objectives and existing regulations?
  • Is additional municipal regulation warranted?  

• Sample municipal STR regulations:   

  • Limit STR use to year-round town residents only.  
  • Limit the number of units on a property that may be used as STRs.  
  • Limit the number of units on a property that may be used as STRs to the number of units on the property that constitute year-round affordable housing.  
  • Allow existing STRs to continue operating, but prohibit additional ones.  
  • Increase local option tax to register STRs.  
  • Set numerical limit on the number of homes that may be used as STRs.