New Hampshire House committee votes to shut the door on short-rental bill

Panel votes 17-2 to send measure to interim study, heeding municipalities

Short Term Rental Photo

The NH House Municipal and County Government Committee on Monday voted to recommend sending to interim study a bill to loosen localities’ restrictions on short-term rental properties, essentially putting off any legislation on the issue for this session. The recommendation to essentially put off any action on the measure until it can be further studied passed by a vote of 17-2. The bill had been passed by the full Senate in February on a voice vote.

Senate Bill 249 would forbid municipalities from prohibiting or restricting the use or of any single-family or two-family building as a short-term rental regardless of its location.

As introduced, SB 249 would have also prohibited municipalities from regulating the use of vacation and short-term rentals. However, the Senate Commerce Committee amended the bill to authorize municipalities “to generally regulate parking, noise, safety, health, sanitation, or other related municipal ordinances” as well as to register and inspect these properties and charge a reasonable fee for doing so.

Before voting on the bill, the committee adopted on an 18-1 vote an amendment offered by Rep. Karen Umberger, R-Kearsarge, to exempt the Kearsarge Lighting Precinct, where she resides, from the bill.

The bill, sponsored by Sen. Harold French, R-Franklin, was supported by the NH Association of Realtors together with property owners offering short-term rentals. Opponents of the bill included the NH Municipal Association, city and town officials, permanent and seasonal residents and bed and breakfast operators.

‘Big meddling in local affairs’

Opponents of the bill claim it represents an unprecedented preemption of municipal zoning authority.

Margaret Byrnes, executive director of the Municipal Association, said the bill preempts the zoning authority vested in municipalities by state law and provides short-term rentals an exemption granted only to the tilling of soil and harvesting of crops.

In committee, this argument was echoed by Rep. Laurel Stavis, D-Lebanon, who called the bill “a big meddling in local affairs, and that is not something we do in New Hampshire.”

Rep. Latha Mangipudi, D-Nashua, said, “My inbox was filled with opposition to this bill.”

And Rep. Joseph Guthrie, R-Hampstead, expressed opposition to the principle of the bill.

Last week, Gov. Chris Sununu also expressed misgivings about the measure, saying he was “afraid of the long-term implications” of it. “And I don’t like telling towns what they can and can’t do. If you are going to believe in local control, then you believe in local control. And anything that bans the towns from having flexibility, that’s going down the wrong path.”

Two towns — Bedford and Seabrook — have prohibited short-term rentals and at least another 26 have restricted them, usually to particular zones or owner-occupied units and often both.

Bob Quinn, CEO of the NH Realtors Association, told the committee “the principle we’re trying to protect is private property rights” and suggested SB 249 expanded the authority of municipalities to regulate short-term rentals. Without the bill, he said, litigious property owners would prevail in the courts, stripping municipalities of that authority.

Court cases

Short-term rentals have been the subject of two recent court decisions — Town of Conway v. Scott Kudrick and Working Stiff Partners v. City of Portsmouth — which, while seemingly contradictory, indicate that control of short-term rentals rests squarely with municipal zoning authority.

The town of Conway sought to prohibit Kudrick from offering three properties as short-term rentals in a residential zone, claiming the use is confined to owner-occupied units. The ordinance prescribes that if short-term rental units meet the definition of a residential dwelling unit by providing “complete and independent living facilities” — most importantly kitchens — they need not be owner-occupied to operate in residential zones. “Transient accommodations,” on the other hand, defined as living quarters without kitchens, must be owner-occupied in those zones.

Ruling against the town, Judge Amy Ignatius of Carroll County Superior Court found that Kudrick’s units met the ordinance’s definition of a residential dwelling unit and were intended to be used for a residential, not commercial, purpose. She stressed that the definition makes no reference to the identity of the occupants or the duration of their stay. Conway has appealed the decision to the NH Supreme Court.

In 2019, the Supreme Court ruled in favor of the city of Portsmouth and against a limited liability company, whose owners sought to use the property adjacent to their primary home in a residential zone for short term rentals. In defining a residential dwelling unit, the Portsmouth ordinance expressly specifies, “This use shall not be deemed to include such transient occupancies as hotels, motels, rooming or boarding houses.”

Quinn suggested the Conway decision, particularly Ignatius’s finding that short-term rentals represent a residential not commercial use, has wide application. However, the judge herself noted that “rulings often depend on the particular language of a municipality’s ordinance.”

The issue posed by short-term rentals, she noted, “is a question that cries out for legislative direction, based on statewide policies. Until such a legislative policy determination is made or until municipalities adopt new ordinances that clearly address this new form of residential rental, the Court will make decisions based on the language of the ordinances in effect, even if the results vary from one municipality to the next.”

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