Representative Michlewitz Files Short-Term Rental Legislation

By Phil Orlandella

As he promised at neighborhood meetings, State Representative Aaron Michlewitz has filed short-term rental legislation geared toward regulating as well as fostering the growth of the emerging technologies sector in Massachusetts.

The Short-Term Rental Industry presents both challenges and opportunities and the legislation works to cover all of the issues while generating considerable new revenues for the state.

“This proposal will generate up to $50 million in new funds for state and local government with a significant portion being put towards programs addressing low and moderate income housing,” Rep. Michlewitz said.

“First and foremost, we must maintain that any and all public safety measures are undertaken and adhered to for the protection of both renters and residents in the neighboring community,” he said.

“Inspections, proper insurance and greater levels of transparency with access to information are vital to ensure this,” the Representative added.

At several North End/Waterfront neighborhood meetings, residents have expressed the need for legislation to govern this service.

They have also complained about late-night, early-morning disturbances relating to the coming and going of renters and vehicles.

“We have to safeguard homeowners to guarantee their investments are protected and their rights to grow those investments are secure,” he said.

“By creating defined levels and classifications we differentiate between small homeowners and large corporate entities and treat them accordingly.”

“In addition, we will help those hosts who are participating in this industry on a less frequent basis by assessing them at a lower rate than other, larger hosts,” he added.

“It is essential that we provide a level playing field for all rentals throughout the Commonwealth of Massachusetts,” Michlewitz said.

“Ensuring a level of equity that will allow for our already robust hospitality industry to thrive, and continue to be the major economic engine it has been,” Michlewitz added.

Short-Term Rental Legislation

  • Registration
  • All units must be registered with the State.
  • Registry will be made available to relevant municipalities
  • This information will also be made available to the public, while protecting an individual host’s personal information.
  • DOR will be charged with maintaining the registry similar to how the Department handles hotel room listings.
  • Host/Occupant Categories
  • Three Different categories of Hosts or Occupants
  • Residential Hosts
  • Unit must be the host’s primary residence.
  • Cannot rent out unit more than 60 days per year.
  • Commercial Hosts
  • Hosts who rent out units for more than 60 days per year and/or rent out multiple units for short-term rental usage.
  • Professionally Managed Hosts
  • Business entities (Corporate housing and other similar renters) or individuals that have a rental management system in place to oversee the properties.
  • Units offered for rent must be for a minimum of 5 nights or more.
  • Taxes
  • Residential Occupants
  • 4% to the State
  • Local Option of no more than 5% to cities or towns.
  • Commercial Occupants
  • 8% to the State
  • Local Option of no more than 10% to cities and towns
  • Half of the local money from this category must be earmarked for medium and low-income housing initiatives.
  • Business Occupants
  • 5.7% to the State
  • Local Option of no more than 6% to cities and towns.

  • Health & Safety Standards
  • All units must undergo an annual inspections conducted by the municipality.
  • If City or town opts into the tax portion of the bill they must set up framework to conduct health & safety inspections
  • Units must be inspected 30 days after being registered with DOR. If unit is not inspected in 30 days the unit may be rented on a temporary basis.
  • Hosts must make renters aware of the location of all fire extinguishers, gas shut off valves, fire exits, and pull fire alarms in the unit.
  • Hosts must also ensure that the units being offered for short-term rental usage are in good standing and up to code on all electrical, plumbing, fire, health, housing, or other relevant local codes.
  • Insurance
  • $1 Million minimum coverage for all units
  • Hosts who have homeowners, renters, or other similar types of insurance must notify their provider that their units are being used as a Short-Term rental.
  • Homeowners Insurers may exclude coverage for units that are being used as a Short-Term Rental.
  • Local Options
  • Various local options for the relevant cities and towns can regulate Short-Term Rentals
  • Limiting hosts to only renting out their primary or permanent residence.
  • Putting a limit on the number of days per year that a host can use a unit for short-term rental usage.
  • Requiring Commercial and/or Business Occupants to obtain a business license from the City of Town before they can offer a unit up for short-term rental usage.