Northampton mayor proposes new fee for short-term housing rentals

  • Northampton City Hall FILE PHOTO

Staff Writer
Published: 3/12/2019 3:03:05 PM

NORTHAMPTON – A City Council subcommittee will hold a public forum next Monday on a proposal for the city to adopt a fee on short-term housing rentals.

The option to adopt the fee is the result of the bill that became state law in December that subjects short-term rentals to state and local excise taxes. It also put in the requirement that all short-term rentals must register with the state.

The meeting of the Committee on Community Resources will take place from 7 to 9 p.m. in the Council Chambers of the Pulchaski Municipal Building.

The proposal was introduced to the council by Mayor David Narkewicz, and would adopt a 3-percent community impact fee for short-term rentals that are professionally managed.

“It’s not everybody who has an Airbnb unit,” the mayor said.

The fee would be paid to the city monthly by the operator and would apply to the total amount of rent collected for each transfer of occupancy.

Narkewicz said that short-term rentals, such as those facilitated through the website AirBnb, were previously an area not covered by the state’s tax code. Taxes and community impact fees on the short-term rentals will come into effect on July 1, although short term rentals that are rented out for 14 days or less will not be subject to taxation.

Narkewicz said that while the local excise tax automatically applies to short-term rentals, communities must choose whether or not to assess the community impact fee.

Narkewicz said that the purpose of the fee is to mitigate the impact of short-term rentals on the rental market, as he said that there have been studies and analyses that show that short-term rentals can impact the cost and availability of rental housing.

While the law mandates that at least 35 percent of a community impact fee must go to support affordable housing or infrastructure, the mayor said that the 3 percent fee he is proposing would reserve 100 percent of the money collected to support affordable housing projects in the city.

“The city has a long and proud history of trying to support affordable housing,” Narkewicz said.

As for how much money the city may collect, Narkewicz said it is not known at the time. He also raised the possibility that having to register with the state may mean that some people may choose to exit the short-term rental business.

Bera Dunau can be reached at bdunau@gazettenet.com.




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