Chatham Hikes Short-term Rental Fee For Second Time

CHATHAM – Short-term rental owners will see higher fees when they renew their registration with the town next year.

 The select board Sept. 29 voted to raise the fee to $325 effective Jan. 1. It was the second time in two months that officials raised the registration fee; it was hiked from $50 to $200 in August. Based on the number of short-term rentals (STR) currently registered with the town, the higher fee will cover the approximately $281,000 annual cost of the program, which includes administration and inspections.

 Chatham and other local towns are wrestling with getting a handle on the number of STRs, requiring registration and annual safety inspections. There is widespread concern that STRs are supplanting year-round rentals and causing disruption to neighborhoods because of overcrowding.

 Several alternative fee structures were discussed by the board, including a charge based on the number of bedrooms in a rental. Out of the 901 rentals registered with the health department, which oversees the STR registration program, 41 percent, or 372, have three bedrooms, while 25 percent have four bedrooms. A smaller number have one, two and five bedrooms, and there are a scattering of rentals with six to 10 bedrooms.

 A sliding scale based on the number of bedrooms would be “unique to Massachusetts and Cape Cod,” said Natural Resources Director Greg Berman. “There’s somewhat of a risk being a groundbreaker like that,” he said.

 Nonetheless, the town could take that tack, said Town Counsel Jason Talerman. A “reasonable nexus” for charging a higher fee for more bedrooms is needed, but he suggested more bedrooms would likely require a higher level of inspections which could justify the higher fee.

 Chair Jeffrey Dykens favored charging $100 per bedroom, but vice chair Cory Metters said a single higher fee would be more efficient and help cover costs if pending state legislation requiring additional inspections for STRs is approved.

 The higher fee is “a drop in the bucket” for STR owners, Metters said. “No one’s going to give a hoot.”

 A fee of $350, however, would “bring in more than I’m comfortable with,” said board member Dean Nicastro. An analysis by the town estimated annual revenue from a $350 fee based on the current number of registered STRs would be $315,350, about $30,000 more than the estimated costs of the program. A $325 fee would generate $292,825 in revenue, closer to the operating costs. Towns are not supposed to charge fees higher than the overall cost of a particular service. Talerman said since the number of registered STRs is likely to grow — the town’s figures are lower than the number registered with the state — and will thus require more inspections and administration, the higher revenue is justified.

 The board unanimously approved the $325 annual registration fee. 

 The board plans to discuss adopting a new general bylaw governing STRs later this month.

 Meanwhile, the health board continues to fine STR owners that fail to register with the town. On Sept. 28, the board voted to institute $200 a day fines on rentals located on Sam Ryder Road, Cedar Swamp Lane and Pine Drive. All were notified by regular mail and registered mail of their failure to register, according to Short-term Rental Administrator/Inspector Karen Chimwaza.