Short Term Rental Crisis: First the Cape While Other Towns Might Be Next.

While Cape Cod is a hot vacation spot for the rich and famous, it's becoming increasingly challenging for year-round residents and seasonal workers to find affordable housing. The median home price has skyrocketed by nearly 80 percent since 2010, outpacing inflation and making life tough for locals and business owners.

The surge in housing prices is a combination of factors from a lack of supply to resistance to development. But there's another culprit in the mix: the rise of short-term rentals through companies like Airbnb and VRBO. Early on, housing advocates worried that Airbnb would attract investors who snatch up homes, driving prices even higher and leaving fewer options for long-term residents. Turns out, they were correct and in a place like Cape Cod, where the population swells in the summer, the impact is hard to ignore. Many homes have been converted into short-term rentals and left empty much of the time.

While the Cape has always had its fair share of part-time residents renting out their second homes, platforms like Airbnb have made it more attractive for investors, coupled with slower housing development… all while building permits issued have decreased significantly over the years, leaving fewer options for affordable housing.

Lawmakers could step in and find ways to regulate short-term rentals more efficiently, so they don't disrupt the housing market but ultimately, encouraging more development, especially of multi-family housing for local residents and lower-wage workers, is crucial. The housing crisis isn't just a concept; it's projected that Cape Cod will lose nearly 1,000 households with incomes under $100,000 by 2026 due to unaffordability.

This housing crunch is affecting businesses as well, as the shortage of workers who can't afford housing leads to labor issues. It's vital for lawmakers to strike a balance between providing lodging for tourists while limiting the growth of short-term rentals that inflate housing costs. Targeting big management companies that operate like hotels but avoid the same regulations might be a good starting point.

In 2018, the Legislature took a positive step by taxing short-term rentals and using the revenue for wastewater infrastructure improvements. Still, the problem persisted, especially with the surge in seasonally occupied homes post-COVID-19. Raising taxes on additional properties rented out on a short-term basis, particularly targeting big investors, could be another helpful measure.

Of course, limiting Airbnb's impact won't magically solve the housing crisis. The real issue is the lack of housing supply. More than 80 percent of Cape Cod's housing consists of single-family homes, with nearly 40 percent only seasonally occupied. Unless we curb short-term rentals, the supply problem for year-round residents and seasonal workers will only worsen. It's time for lawmakers to take action and find creative solutions to ensure Cape Cod remains a vibrant community for everyone.