On Monday, February 7, at 11:30 a.m. in LOB Room 301-303, the Municipal & County Government Committee will hear HB 1307, clarifying the jurisdiction of the Housing Appeals Board. This bill modifies RSA 679:5 to allow the Housing Appeals Board to hear appeals only from planning boards, zoning boards of adjustment, building code boards of appeals, historic district commissions, and heritage commissions on applications for the development of housing. 

As we mentioned in Bulletin #2, the Housing Appeals Board was created to speedily decide housing-related appeals. Over its year of operation, however, it has decided several cases that originated from a source other than an appeal from a decision of a local land use board in a case related to housing. NHMA supports the legislative effort to more clearly define the scope of the Housing Appeals Board jurisdiction to appeals from final decisions of municipal land use boards on applications for the development of housing. Please contact the House Municipal & County Committee and your representatives and urge them to support this bill. 

On Tuesday of last week, the Senate Commerce Committee heard testimony on SB 249, which would prohibit municipalities from regulating or prohibiting the use of any building or structure— including a garage, barn, toolshed, or workshop—as a short-term rental business. In a hearing that spanned more than three hours, many realtors and individuals who identified themselves as “homeowners,” (many of whom do not live in New Hampshire) asked the Senate Commerce Committee to pass the bill to prohibit municipalities from restricting their short-term rental businesses. 

Opposing the bill were many local officials and others who do reside in the affected towns; they talked about the problems they have experienced as a result of the operation of short-term rentals. For example, officials from Laconia described the problems that city experienced with out-of-control properties before enacting an ordinance to regulate them. A former senator described a bus pulling up to a house near his home in Sunapee, and depositing 38 Harvard students for the weekend, and the predictable noise and trash problems that followed.  

Supporters of the bill dismissed these stories as evidence of “a few bad apples.” However, the hearing testimony disclosed that there are “bad apples” in plenty of other towns around the state, and even the hearing testimony just scratched the surface of the body of complaints we have heard from our members over the last few years.   

But the matter of bad apples v. good apples is not the crux of the issue for local officials trying to respond to the proliferation of short-term rentals. The real question is why, of the thousands of possible uses for a piece of property, a short-term rental should be the only one (other than tilling of soil and harvesting of crops) that is completely exempt from municipal zoning authority. Here are the answers offered by some supporting the bill: 

Prohibiting STRs is an unconstitutional taking of property. At least two people made this claim. It’s been almost 100 years since the U.S. Supreme Court ruled that zoning restrictions on the use of property that serve a legitimate public interest are not unconstitutional. This is not subject to serious debate. 

An STR is a residential use that can’t be treated differently from other residential uses. This has been an ongoing argument against any regulation of short-term rentals, and it is simply wrong. If you occasionally invite some friends over for dinner, you are making an ordinary use of your residence; but if you regularly serve meals to the public at your house and charge for it, you’re running a restaurant. Similarly, if you occasionally have a few overnight guests, that’s a normal residential use; but if you rent your house to a different group every night or every week, you’re running a hotel. It is treated as a business for meals and rooms tax purposes, federal and state income tax purposes, insurance purposes, and every other purpose. 

At one point, a supporter said that problems like “beer cans on the front yard” can happen even at residential homes that are not short-term rentals. Of course, no one would dispute that, but there is one significant difference: short term rentals have constant turnover of guests, and there is rarely a consistent on-site contact person for police or local officials to contact about recurring issues. Indeed, this is a requirement at least one municipality has adopted to ensure that short-term rental operators are not allowing their renters to disrupt residential communities. 

Restricting short-term rentals will jeopardize meals and rooms tax revenue. If this is the basis for the legislation, then there is no reason hotels, motels, bed & breakfasts, restaurants, bars, and night clubs should not also be exempt from zoning, because surely restricting those uses hurts tax revenue. A representative of the NH Bed & Breakfast Association testified about how patently unfair this legislation is to B&Bs and similar establishments, who all pay the M&R tax but also comply with other regulations, including zoning. 

Further, our members have reminded us that the municipal M&R distribution is based on residential population. As a result, a municipality where many residential properties are converted to short-term rentals will likely see a decrease in its M&R tax distribution. That decrease in revenue will be compounded by the increased costs associated with issues related to short-term rentals, including for police and fire. 

Municipal officials are properly situated to understand the issues and needs related to short term rentals, and to address the same through local zoning and regulatory processes, after public hearings and, in most New Hampshire municipalities, town meeting action to adopt any applicable ordinances or regulations. Municipal officials continue to voice the need to pass reasonable regulations to respond to the needs of their residents, including permitting short-term rentals in certain zones, requiring registration and particular inspection requirements, or permitting short-term rentals through special exceptions or conditional use permits to ensure appropriate protections for the community. Notably, none of the municipalities where short-term rentals have been a significant issue have tried to prohibit them; instead, they are working to allow them under appropriate conditions. 

Municipal officials and year-round residents have also drawn a distinction between owner-occupied short-term rentals—i.e., homes occupied by the property owner for most of the year—and short-term rentals owned by investors or out-of-state investment companies that are used purely as income-generating commercial businesses. The latter create most of the issues for residents and local officials. Businesses are not typically permitted in residential neighborhoods, and other businesses have on-site staff to manage issues and ensure compliance with rules and local requirements. But SB 249 would not allow municipalities to regulate investor-owned properties any more than owner-occupied rental properties. 

An amendment was offered during the hearing, which represented a small step in the right direction, by removing the prohibition on “regulating” short term rentals. However, the amendment still would not allow a municipality to prohibit the use of any building or structure as a short-term rental, based on classification, use, or even occupancy—among other issues. 

The Committee has not yet voted on SB 249, but it may do so as early as this coming Tuesday. We encourage all local officials to speak with their senators about the impact of the bill. 

On Wednesday, the Senate Ways and Means Committee heard testimony on SB 379, establishing the solid waste management fund and establishing a solid waste disposal surcharge. This is very similar to 2020’s SB 629, which had its path through the legislature disrupted due to COVID-19. An amendment to the bill was offered at the hearing. Our position has remained the same through the various iterations of the bill: support it with the very important caveat that the funding to municipalities remains in the bill. 

The bill is not perfect, but it is an important first step to dealing with our state’s solid waste crisis. Current projections see New Hampshire running out of landfill capacity within the next decade, and prior work by the legislature revealed that New Hampshire needs to pursue various options – more recycling, composting, source reduction, and probably expanded landfill capacity – in order to avert the crisis. NHMA wants to help find a solution because we know that the costs will be astronomical if one isn’t found, but we know that no one solution alone will solve the problem. 

The hearing allowed a number of interested parties to testify to the fact that implementing many of the solutions will require a good deal of technical knowledge, and we heard from several witnesses how critical state-level support from the New Hampshire Department of Environmental Services (DES) will be in formulating and implementing knowledge. Unfortunately, DES currently only has one position dedicated to and filled for solid waste issues, and it simply isn’t possible for one person to provide the amount of technical support that is needed in addition to take all the actions that the state is required to take under various provisions in state and federal law. 

While we are hopeful that funding provision of the bill will stay and provide additional funds to allow some small steps to be taken in the right direction, asking for funding on an off-budget year is not usually likely to succeed. Nevertheless, the policies implemented by the bill even without the funding would allow the state to begin to take preliminary action on solid waste and to prepare for the possibility of an infusion of federal dollars thanks to the passage of the recent federal infrastructure bill.

NHMA’s biennial legislative policy process is getting underway. As a first step, we are recruiting volunteers to serve on our three legislative policy committees. These committees will review legislative policy proposals submitted by local officials and make recommendations on those policies, which will go to the NHMA Legislative Policy Conference in September. 

If you are a municipal official and are interested in serving on one of the policy committees, please contact the Government Affairs staff at 603-224-7447 or governmentaffairs@nhmunicipal.org. 

Each of the committees deals with a different set of municipal issues. The committees and their subject areas are as follows: 

• Finance and Revenue – budgeting, revenue, tax exemptions, current use, assessing, tax collection, retirement issues, education funding. 

• General Administration and Governance – elections, Right-to-Know Law, labor, town meeting, charters, welfare, public safety. 

• Infrastructure, Development, and Land Use – solid/hazardous waste, transportation, land use, technology, environmental regulation, housing, utilities, code enforcement, economic development. 

When you contact us, please indicate your first and second choices for a committee assignment. We will do our best to accommodate everyone’s first choice, but we do need to achieve approximately equal membership among the committees. We hope to have 15-20 members on each committee. 

There will be an organizational meeting for all committees on Friday, April 1. After that, each committee will meet separately as many times as necessary to review the policy proposals assigned to it—typically three to five meetings, all held on either a Monday or Friday, between early April and the end of May.