Orleans Ponders Rental Registration Fee

ORLEANS – Orleans is one of the only towns on the Cape to not charge a fee for short-term and year-round rentals. But that could soon change.

 The select board on March 12 discussed assessing a fee for rental registration. But there’s still much in the way of details that needs sorting out, including whether or not to bring an article to May’s annual town meeting.

 Voters at the annual town meeting in May 2023 passed a rental registration bylaw that requires all owners, year-round and seasonal, to fill out a short registration form in order to rent their properties.

 Elizabeth Jenkins, the town’s assistant director of planning and community development, told the select board March 12 that there are 319 short-term rentals currently registered with the town, as well as an additional 58 year-round properties. Records on file with the county say there are 529 short-term rentals in town, while the Massachusetts Department of Revenue says there are 745 short-term rentals.

 A list of the number of short-term rentals on the Cape and Islands by town presented to the select board showed Orleans to be near the middle. But while almost all other towns assess a fee to register rental properties, Orleans does not.

 “Basically every community on Cape Cod and its surrounding areas [has] a more comprehensive short-term and/or all-rental registration program that is charging a fee that allows for enforcement and inspection,” Jenkins said.

 By comparison, both Chatham and Harwich assess a $50 rental registration fee, and Chatham is considering raising theirs to $150. Brewster has had discussions on establishing a registration program and fee for rentals, but currently nothing is in place. Jenkins suggested a $350 fee for short-term rentals and a fee of roughly $100 for all other rentals in town. 

Looking at last year’s short-term rental revenue, Jenkins said that the average rental in town made $11,413 in August during the peak of summer, while rentals made an average of $48,297 for the year.

 “If we’re looking at a $350 registration fee, that’s very in line with other towns and I don’t think places a burden on those homeowners,” Jenkins said.

 Another way of generating revenue could come through the assessment of a community impact fee, similar to one in place for marijuana establishments. Capped at 3 percent, the impact fee would allocate 35 percent of revenue toward “affordable housing or local infrastructure projects.” Jenkins said Falmouth, Provincetown, Wellfleet and Truro have each adopted the impact fee relative to rental registration.

 But there is still much more for town officials to consider, including whether or not the fee should be assessed to all rentals in town or just seasonal ones. It also remains to be seen if the town wants to establish an owner’s duty of compliance, require identification of a responsible individual for each rental, require a fee for a rental certificate and require proof of that certificate when a rental is advertised.

 There’s also the question of who will assume responsibility of enforcing rental compliance. Town Manager Kim Newman said that if compliance is governed through existing board of health regulations, then an article will not have to be drafted for town meeting in May. Running enforcement through the board of health is a common approach in many communities, she said. But she said that the health board has voiced its desire to see the responsibility for regulating rentals put elsewhere.

“That’s a deeper conversation we have to have as part of the town meeting cycle,” she said.

Citing the fatal fire on Route 6A in February 2023 in which a six-year-old boy was killed, Kevin Galligan said that the job of enforcement may need to extend beyond just health officials.

“That wasn’t just a board of health compliance issue,” he said. “As I understand it…there were structural changes made without permit that restricted access or egress. The board of health is not going to handle that.”

Jenkins spoke in support of a system in which a hybrid building and health inspector is charged with carrying out inspections. When issues are detected, a broader team of officials would be charged with adding assistance.

“That is how Barnstable and Provincetown are both doing it,” she said.

Andrea Reed of the select board also said she favored a “multi-pronged” approach to inspections and enforcement. Newman, meanwhile, said conversations around how best to bring forward any proposed fee and system for enforcement will be ongoing in the coming weeks.

“We would like action on it in some way for May,” she said. “What that action is is undetermined at this time. But we want to keep it topical so people know it’s being considered.”