Short-term rentals are expanding in CT. Their impact on housing availability concerns residents.

Yahoo

31-03-2025

A Connecticut state representative has heard from more than 100 of his constituents in Groton and Stonington expressing their concerns about the rise of short-term rentals and their impact on neighborhoods, availability of housing and quality of life.
In response, State Rep. Aundré Bumgardner, D-Groton, has co-sponsored 'An Act Establishing a State Short-term Rental Registry and Authorizing an Optional Municipal Supplemental Tax on Short-term Rentals,' which took another step forward this past week during a Finance, Revenue and Bonding Committee hearing on March 24.
Bumgardner said the proposed legislation, also known as HB-07238, will create a short-term rental registry maintained by the Department of Revenue Services and reduce administrative burdens on local governments.
It will allow communities such as Groton and Stonington to 'opt into a local supplemental tax (up to 2.75%) on STRs, with revenue directed to local housing initiatives, including deposits into an affordable housing trust fund, require short-term rental platforms like Airbnb and VRBO to collect and remit taxes and report revenue by municipality, giving towns better tools to track activity and enforce local regulations,' Bumgardner said.
'As a member of the Groton Town Council, I worked closely on this issue, and I've continued to carry that work with me to the legislature,' he added. 'In 2023, I proudly co-sponsored legislation that explicitly gave municipalities the authority to regulate STRs through local ordinances — an important clarification that empowered towns to act,' Bumgardner said.
Bumgardner said in recent years, the Town of Groton Planning & Zoning Commission passed regulations restricting short-term rentals including requiring permits and limiting rentals to certain residential zones. Noank, a fire district with independent zoning authority and political subdivision of the Town of Groton, banned short-term rentals entirely.
'Groton, like most municipalities, is in the midst of a housing crisis, both in terms of availability and affordability,' Groton Town Manager John Burt stated in written testimony. 'I strongly support the ability for local municipalities to create a supplemental tax on short-term rentals, which could be used to combat the housing crisis by increasing the supply of housing for renters and prospective homeowners. Additionally, this would create a more level playing field with hotel operators.'
'The Town of Stonington pursued regulation through its ordinance, supported by the framework we established in 2023 legislation,' Bumgardner added. 'I believe these decisions should remain in the hands of our local communities, as Groton and Stonington have demonstrated through thoughtful public processes.'
Among the biggest supporters are those in the lodging business, such as hotels and bed and breakfasts. Several members of the industry voiced support for the proposed bill.
Victor Antico, the owner of Holiday Inn Express in Vernon, believes this bill 'is a necessary step toward creating a fair and equitable lodging marketplace while ensuring transparency, tax compliance, and consumer safety.'
'For too long, hotels, inns, and bed and breakfasts have been subject to strict regulations, including health and safety inspections, licensing fees and the full remittance of state and local occupancy taxes,' Antico said. 'Meanwhile, short-term rental operators who compete directly for guests have operated with minimal oversight. This has created an unlevel playing field that places traditional lodging establishments at a disadvantage. Bill No. 7238 addresses this imbalance by requiring short-term rentals to meet the same registration and tax obligations as hotels and other licensed lodging providers.'
Alan Miller, the general manager of Sheraton Hartford Hotel at Bradley Airport, is a strong proponent of the bill
'By passing Raised Bill No. 7238, the Connecticut General Assembly will take a meaningful step toward modernizing lodging regulations, protecting consumers and ensuring tax fairness across all accommodation providers,' Miller said. 'I urge you to support this legislation and create a more balanced and competitive hospitality industry.'
Ryan Albers, the senior manager of government affairs of the Asian American Hotel Owners Association, said his organization was also in ardent support of the bill.
'Hotels, inns, and bed & breakfasts have long been subject to strict regulations, including health and safety inspections, licensing fees, and the full remittance of state and local occupancy taxes,' Albers said. 'Meanwhile, short-term rental operators—who compete directly for guests—have operated with minimal oversight. This has created an uneven playing field that places traditional lodging establishments at a disadvantage. Bill No. 7238 addresses this imbalance by requiring short-term rentals to meet the same registration and tax obligations as hotels and other licensed lodging providers.'
One of the highest-profile opponents of the bill is Mark D. Boughton, the Connecticut Department of Revenue Services commissioner.
'After careful review, the Department of Revenue Services opposes this legislation as drafted due to the significant administrative and fiscal burden that would be created for the agency,' Boughton said. 'The legislation as proposed creates additional enforcement responsibilities, which has the potential to take us away from our core function of collecting and administering taxes. In addition, this legislation would result in significant administrative costs, including but not limited to additional staffing.'
David Haberfeld, a Bristol-based real estate investor and entrepreneur, runs Haberfeld Enterprises. He owns 11 short-term rentals and manages four others. He also opposes the proposed law.
'It's more overregulation and it's a double tax because short-term rental hosts already pay taxes to Airbnb and VRBO and we already pay taxes on our income. It's like a double tax which is always inappropriate if you ask me,' Haberfeld said.
As far as the registration part of the proposed law, Haberfeld said short-term rentals shouldn't be handled any differently than long-term rentals.
'The registration is so someone can reach out when there is a problem like a party,' Haberfeld said. 'I'm not going to say it's not an issue, but it's barely an issue. But it's what they think they have to combat. … we discourage parties, but Airbnb hosts are the victims of parties, we are not proponents or the cause of them. The guest is the person who has the party. They want to have this so if there are too many complaints they can shut you down.'
Bumgardner said the bill is still in the beginning stages, but the public hearing was a big step. He initially raised this concept two years ago and didn't get a hearing.
Bumgardner said he spoke with a representative from Airbnb recently who said said they would not oppose a registry, 'which I was shocked by,' Bumgardner said. 'I'm not anti-Airbnb, it's another tool in our municipality.
'Airbnb said they would like to be involved in the process and as someone who is passing legislation, it's good to give someone a seat at the table,' Bumgardner said. 'I believe when you follow that process and bring as many people as you can to the table, you have a better bill.'