Stonington select board hears short-term rental ‘retool’ proposal – Penobscot Bay Press

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STONINGTON—At a regular meeting on February 5, the Stonington select board heard from Morgan Eaton, owner of The Island Agency Real Estate, who proposed specific changes to the short-term rental ordinance adopted at Town Meeting last year.

“I’ve done a lot of research in speaking to folks in other areas that have implemented short-term rental ordinances, and I have some ideas for how we can fine tune this,” Eaton began.

In general, Eaton says that the current short-term rental ordinance is failing on two counts: it prevents new short-term rentals, and it hasn’t encouraged new year-round rentals. Instead, Eaton said a “wealthier class of buyers” was buying up Stonington properties and not renting them at all, leaving them empty most of the year.

“They’re just sitting, they’re dark. They’re not people who are using it week to week or month to month,” Eaton said.

“It’s not a huge problem yet,” she continued, “but I see it being a much larger problem as we get a few years into this.”

To encourage new year-round housing, Eaton felt it was important to let the short-term rental market grow with guardrails that keep out “speculative buyers” who buy property solely to make a profit with short-term rentals.

“I was on this committee, and I’m in favor of a lot of the covenants in here, but it was a big ordinance without a lot of conversation,” she said. “I’m just suggesting a little retool.”

Changes big and small

Eaton’s written proposal, presented to the board, consisted of two changes to existing articles and one wholly new article.

First, Eaton proposed “abolishing or reworking” the “1,000-foot clause,” which states that a short-term rental not owned by a year-round resident must be 1,000 feet away from another such short-term rental.

“It’s almost insurmountable,” she said. “You’re essentially not getting any new rentals on the books unless they’re owned by Stonington residents. Stonington residents, for the most part, already have their rentals registered, so what we have is likely what we’re going to have.”

In its place, Eaton suggested regulating rental property through a one-to-three ratio of year-round to short-term rentals. If one year-round rental is registered in Stonington, then three short-term rentals may also be registered.

Short-term rental registration, she proposed, would be first come, first served, with permits issued based on a roster of applicants.

“I can’t promise it will work, but I promise it will produce more rentals than we have now on a year-round basis,” she said.

Eaton’s other proposed change would apply to “grandfathered rentals,” which are defined by the current ordinance as short-term rentals “in operation any time one year before December 31, 2022.”

To get grandfathered in, according to the ordinance adopted last year, the property owner must provide evidence that “the property was used for short-term rental purposes at some time during the one year prior to Dec. 31, 2022.” If a property owner dies, “relative(s)” may inherit the short-term rental permit along with the property.

Eaton said the law excludes those who inherit property that has not previously been a short-term rental.

“If your kids want to rent [your house] out in the future and it wasn’t rented previously, do you want to prevent that from happening?” she asked.

Instead, Eaton proposes changing the criteria for a grandfathered property to being “owned by the current owner prior to 03/06/2023 (when the ordinance went into effect).” Inheriting parties would use ownership date, not previous use as a short-term rental, to register their property as “grandfathered.”

Finally, Eaton proposes a new clause to regulate the use of “seasonal uninsulated cottages.”

To be considered for a permit, cottages would have to be built “prior to March 6, 2023” and be “uninhabitable (not insulated, plumbing freezes if not winterized) during the colder months.”

In the written proposal Eaton gave to the select board during the meeting, she stated that the new clause “does not reduce the housing inventory and adds to the local economy to have these homes rented, if the owner is not using them for the full warmer season.”

Board response

After Eaton finished her explanations, Town Manager Kathleen Billings, Economic Development Director Linda Nelson and members of the select board commented on her proposal.

Board member Evelyn Duncan said she was open to changing things but said “we don’t have enough total history to be able to say ‘Okay, that isn’t working.’”

“I just want a little bit more time under this current ordinance,” she said.

Nelson defended the current ordinance. “Our priorities are to have as much workforce housing as possible and have it be as locally owned as possible.”

Since the ordinance went into effect, Nelson said the town has had 72 short-term rentals registered as non-owner occupied or not owned by a Stonington resident, and 33 registered as owner-occupied or locally owned.

“That’s the imbalance that we’re trying to change,” Nelson said.

Of the 144 registered rentals in Stonington, Nelson said there are only 39 year-round rentals. Agreeing with Duncan, she added that the ordinance “needs to be watched for a reasonable amount of time” before changes are made.

Billings, too, thinks that it is too early to judge the current ordinance. She said the “dark houses” Eaton mentioned in her proposal “have always been there.”

With the already small number of houses in Stonington and the ever-rising price of land, Billings said that the current short-term rental ordinance was “trying to work towards some sort of balance” between short- and long-term rental properties.

“It appears to be a good, strong ordinance,” she said. “If it wasn’t, they’d be blowing holes in it in superior court all over the place.”

Select board chair Richard Larrabee commented, “My problem with this whole thing is that this is a working waterfront, and there’s no houses for any workers.”

When he looks out the back door of his Stonington residence, Larrabee said, “I look up the hill, and there’s three lights on.”

Before turning to other matters, the board thanked Eaton for her presentation.

“I feel good presenting this to you, knowing who my audience is,” Eaton said, before asking the board to “give it serious consideration.”

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