Worcester Business Journal

10 Worcester Business Journal • July 18, 2016 www.wbjournal.com that apply to Airbnb and spearheading the creation of those that could regulate short-term rentals in Worcester. The council requested specifically that mem- bers of the city look into restricting rental through the service to commer- cially-zoned areas and require people looking to list their homes to get a license with the city. Business support Worcester Regional Chamber of Commerce President and CEO Timothy Murray said the city council is prompt- ing good discussions and asking fair questions around Airbnb. While the council has taken steps recently that have not been the most business friendly – such as increasing the gap in the property tax rates paid by businesses and residents – he said there are serious questions about Airbnb operators that need to be address. "Technology is changing everything in every sector of our lives, but if some- one is abusing Airbnb in that they are encroaching on the residential feel of a neighborhood, the city council is well within their right to see if they are com- plying… with the laws on the books," Murray said. Even Uber, another disruptive tech- nology aimed at matching drivers with passengers, is not adverse to regulation, said Cathy Zhou, Uber's New England expansion general manager. However, the company would greatly prefer to see statewide regulation as opposed to a collection of local ordi- nances. With a network of local regula- tions, things would become very com- plicated very quickly, especially for a transportation service, she said. "We are really supportive with regula- tion. We specifically think having a statewide framework is important," said Zhou. "Having a framework that gives riders and drivers clarity across the state would be a positive outcome." Regulations and legal action Airbnb did not respond to multiple requests for comment on these potential regulations but has made public state- ments in regard to regulations put for- ward by San Francisco. The company stated in a blog post on the organization's AirbnbAction website that there is a need for policies to protect the city's housing stock and ensure collection of hotel taxes but also enable residents to make use of the service. However, despite these diplomatic words, in response to tightening regula- tions requiring the company prove to the city that renters have registered with San Francisco before displaying their ads online, the company has sued the city in federal court. "This is an unprecedented step for Airbnb, and one we do not take lightly, but we believe it's the best way to protect our community of hosts and guests," the company stated in the blog post. Above all, none of the Worcester city officials want- ed to create regulations that would lead to a court case. In June, it was announced the city would have to pay $2.1 million in a civil rights lawsuit against the police department and a number of other cases have come down against the city in the last few years. "I don't want anymore liti- gation," District 5 City Councilor Gary Rosen, who proposed regulating Airbnb, said. "The taxpayers can't afford to pay for cases we lose." A glass slipper That all leaves the city looking for the perfect regulation that will protect neighborhoods while allowing people to continue to rent out their homes, all while not running afoul of Airbnb's legal department. For instance, Councilor Bergman cannot see these rentals being regulated just to commercial zones, where they would be competing with the city's cur- rent crop of 845 hotels. While an addi- tional 360 rooms are set to come online by 2017, this still marks a huge shortfall compared to communities such as Providence that has just under 2,300 rooms as of last year. With around 300 Airbnb listings in and around Worcester at any time, these listings are clearly filling a need, Bergman said. However, he said the laws must catch up with the new technology and maintain the residential flavor of neighbor- hoods the short-term rentals are taking place in. Additional resources would likely be required if the city were to actually enforce regu- lations surrounding Airbnb, Wilson said. Currently there are five inspectors responsible for housing complaints, as well as construction-related and all other inspections. Even with the proper resources, track- ing short-term rentals would be diffi- cult, she said. "Monday is going to be different than Tuesday or Wednesday or Thursday, and then by the time you need to bring that in front of a court, it is going to be very different in terms of the number of people that are there," Wilson said. In addition, WRRB says the city should renegotiate the volume-discount park- ing-rate agreements it has with large downtown organizations – like the U.S. Postal Service, the Hilton Garden Inn and Peter Pan Bus Lines – that take up 79 percent of available spaces. "Parking rate increases are inevitable. In order to make them palatable, the key is to show direct impact – through an enterprise account that requires that parking revenues will support parking improvements – and to offer viable alter- natives with differently priced, accessible options throughout the downtown," said WRRB Executive Director Timothy McGourthy, in an email to WBJ. Out of balance WRRB's recommendations are very similar to what the city Department of Public Works & Parks – which oversees a portion of the parking operations – has been saying publicly and what a separate city-sponsored report recom- mended in 2013, said DPWP Commissioner Paul Moosey. Rates have been artificially low, and it is time to bring the system back into bal- ance, Moosey said. DPWP has proposed a five-year plan to the city council to raise rates incrementally, where rates go up about $1 per year, although only the first year of that plan has been approved. "If you want a modern, clean parking structure, rates have to be adjusted," Moosey said. Murray said the parking-rate increases have to be part of a calibrated, incremen- tal plan, and city officials need to be wary of creating sticker shock for organizations used to cheap downtown parking. With these below-market rates, down- town parkers are essentially being subsi- dized by city taxpayers, said George Russell, District 3 city councilor. "We need to ask users to pay their fair share," Russell said. Moreover, the city is going to revisit all the existing volume-discount rates with downtown organizations, Moosey said. "As existing agreements expire, we want to bring them to a more competi- tive and current rate structure," Moosey said. "[City Manager Edward Augustus] doesn't think we should be giving these big discounted deals [to business]...They have been too generous." City budgets for both fiscal 2016 and 2017 slate $3.7 million and $3.8 million, respectively, for the parking system but that does not include any funding for necessary capital maintenance. The WRRB report suggests the city needs to budget about $450,000 annually for basic garage maintenance. Downtown experience The rate increase issue also goes to the improving the overall visitor experience to downtown, raising garage maintenance and appearance as part of the discussion. "I know and have heard from people that have come into downtown that if their first experience is of a garage in disrepair with poor signage and lighting [that] could be...negative...and create a bad perception...as part of their trip, which we don't want to do," Murray said. Having an improved user experience includes having more aesthetically pleas- ing facilities and better signage to direct visitors on where to go, Murray said. The city council has approved a $12-million loan for the DPWD to start infrastructure repair work in 2017. Of that loan, $10 million is slated for the 67-year-old Pearl-Elm garage while the remainder will go toward fire system and stair repairs at the Federal Plaza and Major Taylor garages. Political winds While the parking rates can be increased without any changes to the current city parking management struc- ture, the key recommendation from both WRRB and the 2013 study is an overhaul of parking administration where a division with dedicated funding makes all the key decisions. Currently, parking responsibilities are split among eight different organizations – from the city council setting rates to the DPWP for maintenance to Hartford- based LAZ Parking for garage staffing – and this lack of one decision-maker leaves a lack of direction for not only issues like rates and maintenance, but The price of parking Regulating Airbnb down to earth >> Continued from Page 1 >> Continued from Page 1 City Manager Edward Augustus will oversee the creation of Worcester 's Airbnb regulations. The Pearl-Elm garage, which was first built in 1949, is scheduled to receive $10 million worth of reno- vations, under a $12-million loan the city council approved for better parking infrastructure. P H O T O / M A T T W R I G H T

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