At the recent candidate forum, the mayor offered a common but utterly specious ground for opposing a 2.5 percent tax on short-term rentals: It would amount to “taxing 14 percent of our gross domestic product here in order to fund something that really all of us should be paying for,” he declared. “I continue to favor a broad-based sales tax.”
First, the argument is wrong-headed. Short-term rentals aren’t just an arbitrary chunk of our “gross domestic product,” they are a big cause of our housing problem. Our long-term rental market has been decimated as units have been removed and rented on Airbnb instead. Real estate agents rake it in by selling units to investors who earn their return on Airbnb. And the losers, locals who work here and can no longer live here. The exploding short-term rental market is a big source of the problem, so taxing short-term rentals makes good sense.
Second, the sales tax idea is just the latest bright shiny object to distract from the real change we need. The mayor parrots local real estate agents who oppose a tax that affects their market by dangling a sales tax instead. But a sales tax is not targeted at the problem the way a short-term rental tax is. And sales taxes are inherently regressive. Low-income folks spend a huge chunk of their income on taxable purchases, while rich people spend a much lower portion of their income on purchases subject to the local sales tax. For those reasons, a sales tax will not and should not happen. It’s just a distraction aimed at maintaining the unsustainable status quo.
And that’s the critical point: The status quo must change. “The definition of insanity is continuing to do the same thing over and over and expecting different results.” We know that the town’s existing approach has not worked. True, the town has built some new units over the years, but that has not come close to counteracting the effect of skyrocketing property values and Airbnb returns. The housing crisis has continued to drive our locals out of town in large numbers, leaving employers unable to hire. Families are chased out by the dark windows of second homes and the profits earned by converting units to short-term rental. And the character slowly drains from the town we love.
If we continue doing what we have been doing, we will see the same result. If we are going to change the situation, we have to change it. I plan to vote for 300, and I hope you will, too.