Common Misconceptions
The most difficult problem so far seems to be in defining the short term rental problem(s) we are to solve since there has been no data that points to the extent to which STRs cause or contribute to state-wide or municipal problems in Rhode Island. Here are some myths about STR's that are commonly discussed :
MYTH: STR owners are all out-of-town investors or corporate developers.
REALITY: The majority of short term rental owners are individuals who live or regularly reside at their properties in Rhode Island. Over 80% of Rhode Island STR owners operate just 1 or 2 rentals. These folks generally rent short term to help pay their RI property taxes, save for their kids’ college education or other big life expenses, supplement their retirement income, or cover other living expenses.
MYTH: Short term rentals are causing housing shortages in Rhode Island.
REALITY: Contrary to popular belief, short term rentals are not the cause of housing shortages in Rhode Island. Many of the rentals are primary homes for the owners, and many of them have been vacation homes for decades. Short term rentals make up less than 1% of all housing stock in Rhode Island.The real cause of the housing shortage is a lack of new development and the increasing demand for housing. Rhode Island has ranked last in the nation in recent years for annual housing production per capita.
MYTH: Short term rentals in Rhode Island don't pay taxes.
REALITY: Short term rentals in Rhode Island pay several taxes, including occupancy tax, hotel tax, sales tax, real estate taxes, and rental income tax. Short term rental platforms like Airbnb and VRBO collect and remit occupancy and sales taxes on behalf of the owners to the state of Rhode Island.
MYTH: Short-term rentals compete with hotels.
REALITY: Short-term rentals actually allow more visitors to come to Rhode Island, offering an affordable and safe option for families who cannot afford multiple hotel rooms. They also allow people to visit communities throughout RI that don't have hotels or have limited accommodations. They provide flexible and comfortable accommodations for travelers of all kinds. Short-term rentals provide a unique and personalized experience for visitors, and help to diversify the local economy. They also enable local businesses to reach a broader audience, while providing an additional source of income to Rhode Island residents.
MYTH: Short term rentals are a nuisance for neighbors.
REALITY: There is actually little to no evidence of this in Rhode Island. In fact, short term rentals have been found to be quieter than long term rentals. Additionally, owners of short term rentals often maintain good relationships with their neighbors and take steps to improve the quality of their homes. This can create a welcoming environment for neighbors and their families to visit.
MYTH: Short-term rentals are a burden on communities.
REALITY: Short-term rentals actually create jobs for local landscapers, cleaners, and other service providers. They stimulate the local economy, and improve the appearance of the property where they are located. These benefits can have a positive impact on the community, which is why our non-profit organization is advocating for the responsible and reasonable regulation of short term rentals.
MYTH: Short term rentals cause a rise in housing prices.
REALITY: This is not the case in Rhode Island. For example, in Burrillville, RI the median listing price has increased 165% over 5 years and the town only has 5 short-term rentals. Narragansett, RI has increased 63% over the same amount of time and has the most short-term rentals in the state. Short term rentals do not correlate to the rise in housing prices in Rhode Island.
MYTH: Cities and towns are not allowed to regulate short term rentals.
REALITY: Any municipality in RI can regulate and create rules for short term rentals. Warwick, Middletown, and Narragansett have all set their own rules and regulations for short term rentals, just to name a few. Each town in Rhode Island is unique, so what works in one area may not work in another. It is important for these municipalities to work with the stake holders and their constituents to create reasonable regulation.