This week, City Manager Tom Ambrosino announced that he is developing new municipal regulations to oversee Chelsea’s short-term rental market, commonly referred to as AirBNB.
The move follows a last-minute agreement reached between Gov. Charlie Baker and the State Legislature at year’s end on legislation that had stalled since summer. The bill was signed into law and took effect statewide on Jan. 1. Although the state law establishes a framework for short-term rentals, it grants cities considerable latitude to establish their own rules and impose taxes on such operations.
Ambrosino indicated he expects to present a proposal to the Council by March.
“I’m working on them now,” he said. “I hope
to have a proposal up to the Council with new regulations and requirements
about the local options taxes that we want to collect. I’ve been working on
some drafts and we’ll circulate those internally. We’ll have a proposal to
submit in early March.”
In late December, both chambers of the state legislature and Gov. Charlie Baker reached an unexpected compromise during their two-year session, allowing the previously stalled short-term rental bill to advance. Gov. Baker signed it into law on Friday, Dec. 28.
State Rep. Aaron Michlewitz of the North End, who has championed this legislation through the legislature for years, expressed satisfaction with the compromise that was finally achieved. The bill’s passage represents a lengthy process.
While short-term rentals are not currently a significant concern in Chelsea, a number of them already operate in the city. Growth in this sector is anticipated given Chelsea’s proximity to the airport and the Encore Boston Harbor casino.
A significant aspect of the state law is that it will establish transparency regarding who operates these rentals and their locations—information that remains largely unclear at present.
The law mandates a statewide registry of operators, a requirement the governor had resisted for some time before reversing course late in the year.
Additionally, the law imposes a 5.7 percent state tax on all short-term rental units and permits cities and towns to impose additional local taxes. Boston has proposed adding an extra 6 percent tax on each short-term rental unit.
The governor’s acceptance of the registry appears to have been balanced by a provision exempting rentals of 14 days or less from taxation. Although initially uncertain, these units appeared likely to be required to register in the statewide system.
Ambrosino stated that the city would certainly seek to implement the maximum allowable 6 percent local option tax.
“We’ll definitely
go for the maximum option,” he said. “We’ll look at the Boston ordinance as a
model. It was well-crafted. We’ll make sure rentals are adequately inspected
and safety is addressed.”