Senate Bill 249 is an "all or nothing" proposition that seeks to ban any further restriction of short-term rentals by all municipalities in this state. This strips away the legal right of local communities to regulate its use of local land and may not be legal under current New Hampshire enabling statutes and case law and may impair property values.
The purpose of zoning is to enable a municipality or city to regulate how its land is utilized and to address issues such as: commercial vs. residential use, the number of people who may occupy a dwelling, the types of dwellings, the size of lots and the purpose of the lots.
The first important legal case to challenge a community’s right to zone was Village of Euclid v. Ambler Realty Co., which went to the U.S. Supreme Court in 1926 and questioned whether a community had the legal right to restrict how land was utilized for commercial or residential purposes.
The Supreme Court determined that zoning was a legitimate delegation of state police powers under the Constitution to support the health, safety and well-being of local communities. It reasoned that separating industrial development from residential development was a good thing to both promote public safety and support property values of residential communities where people generally want a safe and quiet environment in which to raise their families.
Since that time, every state (including New Hampshire) has enabling legislation that empowers its municipalities to regulate its own land to support the nature and character of its communities.
The economy of New Hampshire is significantly driven by tourism. Every year, over 12 million tourists visit our state and spend over $6 billion. Whereas the national average of second homeowners in the United States is 5.5 percent, the percentage of second homeowners in New Hampshire is almost double that (only Vermont and Maine are higher).
In addition, second home ownership has skyrocketed under COVID as affluent urban dwellers seek to find safer havens in which to raise their families made possible by an era of increasing tele-commuting and tele-work. Finally, many second homeowners purchased their homes to serve as investment properties and relied on the fact that few municipalities prohibited them from doing so. Thus, second homeowners and short-term rentals are also an important part of our economy.
One of the significant purposes of intelligent zoning is its impact on property values. Courts have long recognized that when property owners rely on critical characteristics of its community such as commercial use, noise, congestion, traffic, crime, etc., and those expectations are undermined, it can have a profound impact on property values.
Imagine college fraternities/sororities moving into a quiet residential community and having 24/7 parties with loud music, noise and traffic. Hence, courts don’t allow commercial development in residential communities or large multi-family dwellings in single-family zoned lots or noisy fraternities/sororities in quiet family areas.
People choose areas to live in based on local characteristics, and those are as important to them as the nature of their own private land.
The middle road here is neither the wholesale acceptance nor banning of short-term rentals but rather the more nuanced and intelligent regulation of them. Communities have long regulated noise, congestion, land use, property use and occupancy limits, and there is no reason why this cannot be done for the use of primary and secondary homes as short-term rentals.
There is a wholesale movement in the New Hampshire Legislature to strip away community rights in the name of individual rights, and this can have a long-lasting and destructive impact on the ability of communities to regulate the kind of communities they want to be.
This issue requires a statewide task force and not a knee-jerk bill that may or may not meet legal muster.
Let’s treat this complex issue with the nuance and care it deserves.
Jon Burroughs lives in Glen.