Mayor breaks tie to approve short-term rental rules

LACONIA — Over the objections of several people who run short-term rentals, the City Council imposed new regulations on that industry Monday, including a controversial owner-occupancy requirement.

Mayor Ed Engler broke a 3-3 tie to give final passage to the regulations, which require inspection, registration and fees.

Those living in The Weirs will be able to offer their property for short-term rental. It will be banned elsewhere in the city unless the owner lives on the premises for at least 150 days per year.

Councilors carved out an exception to the ban for those who operate summer seasonal dwelling units.

They also agreed to have city attorneys review a possible amendment suggested by Engler to allow people to appeal the ban to the Zoning Board of Adjustment.

Under that suggestion, the board would be able to grant exceptions to the ban under certain criteria, including that the property had been used for short-term rentals for at least 10 years or that such use includes a general community benefit “that rises considerably above the financial well being of the applicant.”

Councilors also agreed to consider that the 10-year standard could be reduced.

Councilor David Bownes voted against the regulatory scheme, calling it “Draconian.” Councilors Andrew Hosmer and Mark Haynes were in opposition because they wanted the vote delayed until the amendment suggested by Engler clears legal review.

Regulations recommended by the city Planning Board did not have the owner-occupancy requirement. It was added at the suggestion of Engler over concerns that absentee owners were buying up properties for short-term rental, reducing housing stock for permanent residents.

Several members of the public, including businessman Reuben Bassett and Winnipesaukee Playhouse founder Neil Pankhurst, spoke against the regulations, saying that short-term rentals are good for the tourism economy and that people should have the flexibility to use their property for this purpose if they so choose.

Bassett is an owner in Local Eatery, Burrito Me and Wayfarer Coffee Roasters and is a commercial real estate agent.

“My fear is that this piece of legislation is an illusion, that you think that you are going to preserve your year-round residents and year-round population by this legislation, and it’s not true,” he said.

“There are other areas you need to be focusing on. This is an area that does bring money into the community and brings people we do want to have here.”

Pankhurst owns a five-bedroom home in Laconia that is used by actors and crew members during the summer theater season and is rented out on a short-term basis the rest of the year. He spoke of the importance of tourism.

“I feel this is not any more an industrial town or a manufacturing town,” Pankhurst said. “We have one mill across the way where the architect of the Winnipesaukee Playhouse has offices. My education director lives in another mill.

“Most of the manufacturing that used to happen here has been replaced by other things, and one of the things is tourism. It would be foolish to buck against that trend and say ‘I don’t want tourism here.’”

He said out-of-town investors are not as big a factor in the short-term rental industry locally as some have made them out to be.

"My research and my talking to people would suggest to the contrary,” said Pankhurst, who lives in Meredith. “Most live pretty locally, myself included. Either they have been properties that have been in their household for many, many years or they have come down through the generations.”

Paula Hiuser asked if any statistics have been compiled to back up the notion that short-term rentals are damaging the fabric of the community by reducing housing stock that could otherwise be occupied by families or new residents.

Mayor Engler said he doesn’t have statistics.

“What I can tell you is that it would not take a great period of time of online research to come to the conclusions that many, many cities across the United States have expressed the exact same concerns that members of this City Council have in terms of destroying the fabric of the community by taking housing stock primarily that is already in short supply,” he said.

Engler said Boston city officials recently passed a short-term rental ordinance similar to the one drafted in Laconia.

Dorothy Duff spoke in favor of the regulations.

“You want employment to come here, you want jobs to come here, but there’s no place they can afford to live,” she said.

Previous zoning ordinances prohibited short-term rentals in most of the city, but the prohibition was generally not enforced.

Under the new ordinance, short-term lodging is defined as a unit that is rented out from one to 14 days at a time. Registration to offer a property for short-term rental is required with the city, with renewal every two years. A fire and code enforcement inspection is also required.