Vrb-no: City looks to up short-term rental regulation resources amid Gale Avenue complaints

LACONIA — Gale Avenue is a short, residential road connecting Pleasant Street to the shores of Lake Winnisquam. It’s just blocks from downtown, steps from the waterfront, and a stroll from Pleasant Street School.

The things that make Gale Avenue a great place to live, however, also make it a great place to stay.

The home was sold last year for over $500,000, and has since been listed on the short-term-rental platform Vrbo, which is similar to Airbnb. After neighbor complaints brought the property onto its radar, the city’s planning department found that the property owner neither has nor qualifies for a short-term lodging permit. 

Efforts to bring the owner into compliance with city code have stressed the city’s ability to enforce zoning violations, and complaints about the property also embody how short-term rentals can both fuel the local housing crisis and unsettle neighborhoods. 

This friction coincides with a move by the city to up its enforcement capacity for short-term lodging regulations. This puts into action officials’ stance that short-term rentals aren't just a problem to city residents because they can be disruptive, but because the booming market poses a real threat to the availability of accessibly priced, year-round homes and apartments in an already desolate market.

The city enacted its current short-term lodging ordinance in late 2019. To get a permit, applicants must be an owner-occupant of the property, defined by the ordinance as someone who makes the property their legal domicile and stays there at least 150 days a year. The ordinance creates exceptions for properties that are in specific zoning areas and that are seasonal rentals of fewer than 1,400 square feet. The cost is $250, and $10 per abutter, for a two-year permit.

The new rules were divisive: some business owners asserted that short-term rentals are a vital part of the local tourism economy, and other critics felt that owners should have the flexibility to do as they please with their property. 

Then-Mayor Ed Engler advocated for the owner-occupant requirement to be included in the ordinance out of concern that out-of-towners seeking investment opportunities would take away key housing supply. 

Before it was sold last August to Granite State PPS, part of a real-estate investment company called Posh Property Solutions, 65 Gale Ave. was a family home. Until recently it could be booked through the rental platform Vrbo for around $315 per night. The listing — which owners took down early this week — boasted five bedrooms with space for 16 adults and described the property as a “large luxurious home perfect for family or group gatherings.”

Jon Steenbergen, registered with the Secretary of State’s Office as a principal of Granite State PPS, did not respond to interview requests for this story. Steenbergen’s Facebook page states he is from Concord and lives in Laconia. A previously rejected business registration with the state for Granite State PPS uses a Texas address, and the current registration, with a business status of “good standing” uses 65 Gale Ave.

According to city Planning Director Dean Trefethen, the owners have “maybe been up here five or six days since they bought it in August.” 

Posh Property Solutions’ Facebook page, which describes itself as “a diversified real estate investment and management company,” includes posts about 65 Gale in addition to its other short- and long-term rentals in Florida, Georgia, Kansas, Massachusetts, Oklahoma and Texas.

At a Jan. 9 city council meeting, neighbors pleaded with the city to take action. They described loud noise lasting late into the night, cars overflowing from the driveway and parked illegally on the street and incorrect trash disposal. 

Billy Smith, whose home abuts 65 Gale, had been supporting his late husband Larry in hospice care at home, and told councilors how guests' gatherings lasting into the early hours of the morning had tarnished the quiet that made their neighborhood a preferable hospice location.

“Larry’s medical condition had him confined to the house. ... His quality of life suffered because of who we thought were neighbors,” Smith said. “Now I find out it was Airbnb customers with an absentee landlord.”

According to Trefethen, the city has issued about 90 short-term lodging permits. Through his own research, he has identified “somewhere between 150 and 175” listings on various online platforms, excluding those by motels and other commercial lodging businesses.

As with most ineligible properties that face city enforcement efforts, 65 Gale came to Trefethen’s attention because of neighbor complaints.

When the city learns that a property owner is renting short term without a permit, Trefethen said, the first step is to reach out and help owners look into whether they might be eligible for one. Trefethen estimated that about half of listings without permits would be eligible if they applied.

If property owners don’t take steps to rectify their violation, the city will issue a letter stating the penalty is a fine of $275 per day and begin tallying those fines.

An amendment to the city ordinance added in 2020 allows the Zoning Board of Appeals to grant exceptions for applicants in cases where the property has been used as short-term rental since before 2014 — predating the Airbnb boom — or if the owner can show that their short-term rental “includes a general community benefit that rises above the financial gains of the applicant.”

Steenbergen has a ZBA hearing on Feb. 21. While the ZBA has granted such appeals before, Trefethen described two cases similar to 65 Gale that came to the ZBA in recent months. Both were denied.

ZBA appeals include public hearings, Trefethen said, where “the adverse history with neighbors will come out,” making “a general community benefit” difficult to prove.

“I don’t see a way they will qualify,” Trefethen said. The property was not rented out by its past owners, is in a residentially zoned neighborhood and is not owner-occupied.

To actually collect the fines and enforce the ordinance, however, the city needs a court ruling. 

Courts can either side with the city, allowing it to collect some or all of the accrued fines and prohibit the listing, or it can side with the applicant, either because they do qualify or because the city didn’t follow the correct enforcement process. 

But with the persisting, pandemic-related court backlog, such rulings can take months, Trefethen said. In the meantime, most listings continue to operate.

Though few in number, there are other ways for neighbors to seek action against noncompliant vacation rentals.

Rental platforms, including both Airbnb and Vrbo, have taken steps to self-regulate, prohibiting hosts from marketing properties as party houses and threatening to remove listings if owners and guests don’t follow their community policies. Vrbo’s Stay Neighborly Program, similar to one at Airbnb, also requires hosts to have the appropriate licenses and permissions to list their properties.

Neighbors who complain to the online platforms about guest or host behaviors or about a listing's legal status may trigger action — which can impact not only a single listing, but the ability for that host to use the platform at all.

Real estate agents can play a preventative role, avoiding situations where a new owner finds themselves in violation of local ordinances. 

Agents have a responsibility to make sure buyers angling for the short-term market don’t purchase something that can’t legally be used for that purpose, Frank Roche, owner of Roche Realty Group, said in an interview.

“We tell [agents] that all the time,” Roche said. This obligation is especially important, he continued, because “there’s a new wave of buyers looking at real estate purely from an investment standpoint and with the goal of doing short-term rentals.” State, towns and even local HOAs all have their own rules about them, he said, and both agents and buyers should inform themselves.

The city is preparing to take bids from software vendors that assist municipalities with identifying violators, a service cities across the country have already employed.

The city’s ordinance has, so far, “done what we wanted it to do pretty well,”  Trefethen said. Requiring owners to get permission facilitates education by the city about their responsibilities as hosts and has helped resolve situations where neighbors complained. Additionally, the regulation has helped return some residences to the rental market: more than one owner unable to get a short-term permit has pivoted to renting long-term, according to Trefethen. But because of the resources it takes to implement these rules large-scale, properties without complaints from neighbors can fly under the radar. 

By turning enforcement onto all noncompliant properties, not just those with complaints, it takes the onus off neighbors to identify violators, Mayor Andrew Hosmer said. Upping resources will also better execute the ordinance’s intention to preserve neighborhood character and housing supply.

This is something the city had been considering, Hosmer said, but public pleas to the council underscored the necessity of better enforcement.

“It’s become apparent that this is having a significant impact on people’s quality of life,” Hosmer said in an interview. 

The city poured resources into developing and revisiting this policy, which clearly outlines the appropriate places for these rentals, he continued, and “to see someone so flagrant is a cause for concern.” 

“If we’re going to have these regulations in place," Hosmer said, "we have to enforce them."