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Committee backs adoption of state-local option to charge 3% short-term rental community impact fee
Summary
The Committee on Legislative Matters voted April 15 to recommend acceptance of two state statutory options (M.G.L. c.64G, §§3DA and 3DB) that would let Somerville impose a 3% community impact fee on short-term rentals, both professionally managed units and certain owner-occupied two- and three-family dwellings.
The Committee on Legislative Matters on April 15 voted to recommend that the City of Somerville accept two state statutory options that allow municipalities to levy a community impact fee on short-term rentals.
The first measure, acceptance of Massachusetts General Laws chapter 64G, section 3DA, would permit the city to impose a 3% community impact fee on "professionally managed" short-term rental units. The second measure, section 3DB, would permit charging the same 3% fee on short-term rentals in two- or three-family dwellings that include the operator's primary residence. The committee’s recommendation follows the city’s existing limits on short-term rentals in local ordinance: the fee would apply only where the city’s ordinance allows the rental activity.
Director Serina Singh and Assistant City Solicitor Jason Peeks answered questions about administration mechanics. Director Singh noted the Department of Revenue will collect the fee and distribute proceeds to municipalities quarterly; the city finance director provided an attached memo estimating likely revenues and restrictions on uses of the fund.
Why it matters: The local-option fee is intended to offset community impacts of short-term rentals and is limited by state law in how funds may be used. Acceptance gives Somerville another tool to mitigate pressure on the long-term rental market, within the limits set by the city's short-term rental ordinance.
Vote: The committee voted by roll call to recommend approval of both items. Roll-call votes were recorded as: Councilor Shazo — yes; Councilor Mbah — yes; Councilor Ewingampen — yes; Councilor Scott — yes; Councilor Davis — yes. The committee’s recommendation will be transmitted to the full City Council for final action.
Next steps: If the City Council accepts the items, the Department of Revenue will collect and remit the 3% fee on applicable rentals; staff flagged a separate finance memo estimating projected revenues and statutory constraints on uses of funds.
