Rosenberg suggests House to blame for Airbnb inaction

SEN. STAN ROSENBERG chastised his fellow lawmakers on Thursday for dithering for years while the short-term rental industry embedded itself in the market and grew unencumbered by regulations and the lodging tax

“It’s not going away, technology is not going away,” said Rosenberg, who was part of a CommonWealth magazine Newsmakers panel discussing how Beacon Hill should regulate disruptive technologies. “States are having to move and move quickly and many have figured it out faster than we’re figuring it out. It’s incredible. Yet it takes three years for one of the few full-time legislatures in the country to come up with a solution…It’s not rocket science.”

While not directly pointing the finger at the House, Rosenberg cited two attempts by the Senate to pass measures extending the lodging tax to home-sharing apps such as Airbnb only to see the proposals die in conference committees when the two chambers met to hammer out differences. The measures, sponsored by Sen. Michael Rodrigues of Westport, were part of the economic development bill in 2016 and, later, the fiscal 2018 budget, where the provision was inserted by the Senate as a way to pay for an increase in the Earned Income Tax Credit.

Rosenberg also highlighted attempts by state Rep. Aaron Michlewitz, a Democrat from Boston’s North End who was also on the panel, to pass bills regulating the industry over the last three years only to see them languish in legislative committees without coming up for a vote.

When he first introduced a bill in 2014, Michlewitz said, few lawmakers had experience with or even knowledge of the home-sharing industry. He said short-term rentals were popular mainly in the state’s tourist and college areas because of the obvious need for rental space by visitors in those areas. Elsewhere, he said, few lawmakers were aware of the problem.

“Education is a component of this and that takes some time,” said Michlewitz, who is the House chair of the Joint Committee on Financial Services where the home-sharing bill currently sits. “I was getting educated much quicker than anybody else. Other than Boston, the Cape, and out in the Berkshires, many of my colleagues didn’t understand this issue.”

Rosenberg said the problem stemmed from “inertia” in the State House, in part because of a change in the legislative process that was designed to speed things up on Beacon Hill but instead has slowed bills down. Rosenberg said the change required bills to be reported out of committee in the last months of the two-year legislative session. He said “human nature” results in lawmakers waiting until the last minute to act on legislation. With the crunch of budget deliberations, he said, many bills are not acted upon.

The panel discussion, held at the offices of Mintz Levin in Boston’s Financial District, stemmed from recent CommonWealth stories that focused on Airbnb’s impact on housing in Boston and the drain of transportation companies such as Uber and Lyft on public transit. In addition to Rosenberg and Michlewitz, the panel included Airbnb’s director of public policy, Will Burns, and Ford Cavallari, chairman of the Alliance of Downtown Civic Organizations, an umbrella group of neighborhood associations.

The lack of action on short-term rental taxation and regulation is all the more surprising because all parties seem to agree it’s needed.

“There should be regulation,” said Burns of Airbnb. “Out of all the New England states, only Massachusetts doesn’t collect tax on short-term rentals. We believe our community should be paying the same taxes as hotels.”

Burns, a former Chicago alderman and Illinois state representative, acknowledged “these bills take forever to get through the legislature,” but said it was mind-boggling that when so many people with different agendas all agree there should be taxes, Bay State lawmakers still drag their feet.

He claimed some of the opposition comes from the lodging industry which, while ostensibly claiming Airbnb and other apps aren’t paying their fair share of taxes, lobbies against passage to keep the booking sites from being seen as legitimate competitors. He said that is especially true in high-tourist areas during peak times such as Fourth of July when “surge pricing” goes into effect.

“They really hate us because we cut into the nights where they can essentially gouge consumers,” he said.

Gov. Charlie Baker has urged the Legislature to send him a bill with taxes on home-sharing apps but has only voiced his support for a levy on people who rent their homes for more than 150 days a year. Nearly half of Airbnb listings in the Boston area are available for more than 150 days.

Another issue is the level of regulation, with different communities having different needs and approaches. Rosenberg said he is a proponent of “decentralizing” regulation, leaving a lot of the work to cities and towns.

“If you overregulate, you’re going to kill [the industry] and that’s not the intention,” he said.

Michlewitz, whose bill lays out a broad regulatory framework but leaves specific regulations up to cities and towns, said people in Boston are concerned about housing displacement, people in the Berkshires want taxes but little government oversight, and people on the Cape, who have a long history of renting out their properties without government interference, want things left the way they are.

Cavallari, the civic group chairman who lives in the North End, noted that the short-term rental growth in Boston came about because of a suspension of zoning laws by Boston officials. He said the absence of zoning oversight has contributed to the problem of units being removed from the housing stock, creating a shortage of affordable housing.

He was backed by a member of the audience, a Chinese immigrant, who said through an interpreter that she and her family lost their apartment when their Chinatown building was sold and the new owner converted the entire building into an Airbnb “hotel.” That was a large part of the focus of the CommonWealth story.

Burns pointed out that Boston’s growing success and the city’s income inequality were more to blame for the lack of affordable housing in the city than his company’s platform.

“We’re not the bogeyman here,” he said.

Cavallari said there’s also a danger that, absent regulations, many of the rental units don’t abide by health and safety codes. In a city where the Cocoanut Grove fire in 1942 resulted in the adoption of sweeping fire regulations adoptions, that should be paramount, he said.

“That is playing with fire, quite literally,” he said.