At the City Council meeting on Tuesday, May 28, Councilors unanimously approved a measure that would charge a 3 percent Community Impact Fee to the operators of short-term rentals in the City of Everett, including those using Airbnb and other rental booking sites.
It will go into effect July 1.
The fee is part of the Short-Term Rental Ordinance approved by the Council earlier this year. Councilors were given the option to impose between 1 percent and 3 percent in the Community Impact Fee, and they chose the maximum.
Operators of short-term rentals will be assessed the 3 percent fee paid directly to the Department of Revenue (DOR) in the form of an excise on the total rental revenue. The State will then give that back to the City on a quarterly basis and Councilors voted that the fee go toward affordable housing and infrastructure. This fee is on top of the 6 percent Occupancy Excise that short-term rental operators are already paying to the DOR as of March 4.
A short-term rental is defined as any stay under 31 consecutive days and would not apply to month-to-month leases or leases over one month. However, the Community Impact Fee is only applicable to rentals that are managed through a registered booking agent.
In addition to the 3 percent fee, the new ordinance requires that all short-term rental properties managed through a booking site be fully licensed just like any other business. Rental operators must apply for a license with the City, pay for said license, and have the license approved by the City Clerk in order to operate legally.
This went into effect on March 4 when it was signed by the Mayor.
“If they are in operation without a license, they will receive a cease and desist order,” said City Clerk Sergio Cornelio. “Please be sure you have all the licenses needed.”
He added that rental owners who continue to operate without a license will be subject to fines.
The new ordinance comes amid a surge of local rentals being listed on booking sites like Airbnb and Vrbo ahead of the opening of Encore Boston Harbor this summer.
“We have to do this. We have a ton of Airbnbs,” said Councilwoman Rosa DiFlorio. “With the growth coming with the casino, [they] are going to be more popular.”
Platforms like Airbnb and Vrbo allow homeowners to rent out rooms in their home or units in their building to guests for short-term stays. Residents are hoping to take advantage of the coming tidal wave of out-of-town visitors who want to use the casino but don’t want to pay a premium to stay at the Encore hotel, where, according to its Chief Communications Officer Michael Weaver, rooms will start at $645 per night.
A quick Airbnb search of rentals available in Everett yields a smattering of options on the streets surrounding Broadway and beyond. They range in price from $29 per night for an entire three-bedroom apartment on Marie Avenue, to $350 per night for a six-bedroom, ten-bed house on Summit Avenue. Some posters tout their proximity to the casino in their listings as a way to entice possible guests.
In order to make the public aware of the new rental requirements, the City plans to release announcements on Everett Community Television as well as take out ads in the local papers.
Clerk Cornelio admitted that it would take a lot of legwork to acquaint the community to the new laws.
“It’s a slow process,” he allowed. “No one’s had the licensing before. We’re trying to move forward as proactively as we can.”
The Clerk also added that he and his team are using sites like Airbnb to identify unlicensed short-term rentals in the city and to reach out to their operators.