Compliance problems with a state registry of short-term vacation rentals are reigniting debate over the program that went into effect last year despite a veto from Gov. Daniel J. McKee.
A trio of Newport area lawmakers in a Jan. 25 statement lightly admonished the hundreds of Newport property owners still missing from the state list a month after the deadline for them to register their rental properties.
“There are clearly some more issues here,” said Rep. Lauren H. Carson, D-Newport. Carson sponsored the bill requiring property owners who rent their homes through websites such as Airbnb Inc. and VRBO to register with the state.
The law, which was passed in a veto override by the General Assembly in early 2022, comes amid growing noise complaints and safety concerns, including a fatal stabbing at a party held at a Newport short-term rental in 2021. The online registry aims to help neighbors and law enforcement get in touch with rental property owners when problems arise by keeping a public list of names and addresses.
About 3,000 short-term rental owners signed up with the state by the Dec. 31 deadline. That’s about two-thirds of the short-term rental homes in Rhode Island, according to the analytics website AirDNA.
Elizabeth Dwyer, interim director at the R.I. Department of Business Regulation, which oversees the registry, said in an emailed statement that regulators were “encouraged” by the initial “high rates of compliance.”
But in Newport, 33% of the estimated 821 active rentals have registered, which has Carson concerned. She hoped public reminders would spur people to register their properties.
The reminders would be helpful for those who don’t know the registry exists, said Evan Smith, CEO and president of Discover Newport. Many of the short-term rentals in Newport are owned by people who don’t live in the state and are unaware of the new law, Smith said.
But others are avoiding the registry on purpose – perhaps because they don’t want to pay the $50 application fee or deal with the paperwork, as critics such as McKee warned.
“I think some people are just waiting it out, thinking it might disappear,” Smith said.
DBR hasn’t started fining rental owners who have not signed up, although the law lets regulators charge $250 beginning Jan. 31, escalating to $1,000 a month. Dwyer said the department is working with lawmakers to “determine best practices for ensuring compliance moving forward.”
Even if the agency starts imposing fines, the amount is inconsequential compared with the $500-a-day average daily rate for a Newport rental in 2022, according to Newport Mayor Xaykham Khamsyvoravong.
“The penalties have to be substantial enough to actually attract the attention of homeowners,” he said.
Confusion over the existence of multiple registries may also be causing problems: Newport maintains a separate list of short-term rentals and charges up to $1,000 a day for anyone with an illegal short-term rental. The city’s registry had more than 550 rentals last year, and about 350 applications were received for 2023, according to Khamsyvoravong.
Smith thought the state needed more than fines to make rental owners comply. Just like any other business owner risks losing their business license if they don’t fill out the proper paperwork, short-term rental property owners should be taken off websites such as Airbnb if they don’t sign up for the state registry, according to Smith.
“There should be no special exceptions; this is a business like any other,” Smith said.
The Rhode Island Hospitality Association is working with lawmakers on legislation aimed at making the registry “easier to access and navigate,” Dale Venturini, association CEO and president, said in an emailed statement. She declined to share more information, saying the bill isn’t fully written.
