Nantucket Short Term Rental Market in Disarray as Judges Continue to Shape STR Landscape

March 18, 2024

With more state and local jurisdictions passing short term rental regulations, litigation has followed. Often, such cases regard the constitutionality of these laws: does a given set of restrictions limit property rights, or hinder interstate commerce, as guaranteed by the constitution? Such is the case in New Orleans’ ongoing battle over STRs, where just last week a judge upheld the city’s ban on investor-owned STRs (the ruling is to be appealed). 

But a recent short term rental court ruling in Massachusetts is in a different arena: zoning laws. Namely: if a property is not in a business property zone, can it still be primarily used as a vacation rental, i.e., a commercial purpose? 

Last week, Massachusetts Land Court Judge Michael D. Vhay ruled that it cannot: per the Boston Globe, “Vhay ruled in favor of a Nantucket homeowner who sued her neighbors and the town in 2022, finding that her neighbors’ ‘principal use’ of their property for short-term rentals violated the zoning rules for that neighborhood… the ruling could compel Nantucket to take a firmer stand on regulating short-term rentals than it typically has in the past, and local leaders say it could have major implications across the island, where short-term rentals figure prominently in the economy.”

The ruling isn’t expected to impact 2024; and it should catalyze the local government to pass a relatively STR-friendly law on the small vacation island that fixes any issues from the current zoning map. That said, add zoning laws to the list of arenas where the STR regulation is to be battled. 

Below, please find Property Guard's weekly short term rental regulation round-up, highlighting state and local news regarding short term rental regulations to regulate (or prohibit) Airbnbs and other STRs. If you want a comprehensive data solution on STR regulations in all 20,000 state and local jurisdictions, contact us here.

New and Proposed Regulations:

  • 🏝️ Nantucket, MA: Judge ruling may force Nantucket to enforce STRs due to zoning rules (link)
  • 🥔 Idaho: Bill limiting local jurisdictions’ ability to regulate STRs is “back to the drawing board” after heated debate; unsure if resolution will occur in 2024 (link)
  • 🏜️ Arizona: “All 11 bills addressing short-term rentals dead in state legislature” as localities fight to gain back rights to locally regulate STRs (link)
  • 🥊 Muskegon, MI: Temporary short term rental ban enacted for 6-12 months as new rules are considered (link)
  • 🐴 Missoula, MT: Short term rentals must be registered with the town, and the permit number must be displayed on the online listings (link)
  • ⭕ Fairway, KS: New short term rental law requires a 1,000 foot buffer between any short term rentals (link)
  • 🧑‍⚖️ Springfield, NH: New STR rules enacted in 154-74 vote (link)
  • 🧑‍⚖️ Rhinebeck, NY: “Rhinebeck eyes limiting short term rentals to owner occupied homes” (link)
  • 🧑‍⚖️ Bardstone, KS: City “pushes pause” on short term rentals (link)
  • 🧑‍⚖️ Hinsdale, IL: City commission now requiring all STRs to be a minimum of 90 days, effectively banning vacation rentals (link)

Other Noteworthy News:

  • 👮 Portland Enforcement: The city of Portland, OR is significantly stepping up its enforcement of STR laws, penalizing the owners of illegal short term rentals (link)
  • 📸 Cameras Banned: Airbnb has banned all indoor security cameras, citing commitment to guest privacy (link)
  • 📈 STR Market Share Increases: “Hotel demand fell 2.0% in January, while short-term rental demand rose 1.3%. Despite taking share from hotels, increasing supply has created occupancy headwinds for short term rentals causing RevPAR to contract 6.6%.” (link)
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