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Narragansett, Rhode Island Short-Term Rental Regulation: A Guide For Airbnb Hosts

Narragansett, Rhode Island

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What are Short-Term Rental (Airbnb, VRBO) Regulations in Narragansett, Rhode Island?

Narragansett, a popular beachside community in Rhode Island, recently passed new regulations on short-term rentals like Airbnb and VRBO that have sparked controversy among property owners and residents. In May 2024, the Narragansett Town Council approved an ordinance that places significant restrictions on short-term rentals in an effort to address housing affordability and community concerns.

The key provisions of Narragansett's short-term rental ordinance include:

  • Prohibiting rentals of less than 7 consecutive nights
  • Capping the total number of short-term rental permits, decreasing from 1,100 in 2024 to 900 by 2026
  • Requiring hosts to maintain detailed records of renters
  • Defining a short-term rental as a unit rented for under 30 consecutive nights
  • Exempting hotels and similar establishments from the regulations

Starting a Short-Term Rental Business in Narragansett

Property owners looking to start a short-term rental business in Narragansett will need to navigate these new regulations carefully. The ordinance is set to take effect on September 1, 2024. Hosts will be required to obtain one of the limited number of short-term rental permits from the town and ensure their rentals meet the 7-night minimum stay requirement.

The Narragansett short-term rental ordinance has drawn criticism from many property owners who rely on rental income, as evidenced by discussions on forums like Reddit and BiggerPockets. Opponents argue the regulations will hurt the local seasonal economy and drive up long-term rental costs for students while doing little to improve housing affordability.

However, proponents believe the ordinance is necessary to preserve community character and prioritize housing for residents over vacationers. The Narragansett Town Council has emphasized they are not banning short-term rentals outright, but rather implementing common-sense regulations.

Property owners should review the full text of the ordinance and consult with local authorities to ensure compliance before starting or continuing to operate a short-term rental in Narragansett. With the right planning and adherence to the new rules, it is still possible to run a successful Airbnb or VRBO in this popular Rhode Island destination.

Short-Term Rental Licensing Requirements in Narragansett

To legally operate a short-term rental in Narragansett, property owners must obtain a rental registration permit from the town's Building Inspection Department. The requirements and process are as follows:

1. Complete the Rental Registration Application form, available on the Building Inspector's website.

2. Pay the required fee, which varies based on the type of dwelling:

  1. Single-family home: $200
  2. Two-family home: $300
  3. Three-family home: $400
  4. Four or more units: $500 plus $50 per unit

3. Provide a copy of the current RI Housing Maintainer's Certificate.

4. Submit a completed RI Residential Lease Agreement that complies with the town's rental ordinances, including the "Three Student" rule prohibiting more than 3 college students from occupying the same single-family dwelling.

5. Pass a rental housing inspection conducted by the Building Inspection Department.

Applications and required documents should be submitted to:

Narragansett Building Inspection Department
25 Fifth Avenue
Narragansett, RI 02882

The rental registration process typically takes 2-3 weeks from submission to approval, assuming all requirements are met and the property passes inspection.

Failure to obtain a valid rental registration permit before renting out a property can result in significant fines and penalties. Under Narragansett's updated short-term rental ordinance effective September 1, 2024, minor violations incur smaller fines, while major violations, such as operating without a permit, are subject to a $1,000 fine and revocation of the permit.

It's crucial for Narragansett property owners to familiarize themselves with the town's rental registration process and short-term rental regulations to avoid costly penalties and ensure compliance. By properly registering and following the rules, hosts can legally operate successful short-term rental businesses in this popular Rhode Island beach community.

Required Documents for Narragansett Short-Term Rentals

To obtain a short-term rental permit in Narragansett, property owners must submit the following documents to the Building Inspection Department:

  1. Short-Term Rental Application Form: This form, available on the town's website, collects basic information about the property owner, the rental unit, and the intended use.
  2. Proof of Ownership: Applicants must provide a copy of the current deed or other legal document demonstrating ownership of the property.
  3. Floor Plan: A detailed floor plan of the rental unit, including room dimensions, egress windows, and smoke/carbon monoxide detector locations, is required to ensure compliance with safety codes.
  4. Parking Plan: Applicants must submit a site plan showing the location and number of available off-street parking spaces for renters.
  5. Proof of Insurance: Property owners must provide a certificate of insurance demonstrating liability coverage of at least $500,000 for the rental unit.
  6. RI Housing Maintainer's Certificate: This state-issued certificate, obtained through the RI Department of Business Regulation, verifies that the property owner or their agent is authorized to maintain and manage the rental property.
  7. Narragansett Renter's Notice: Owners must provide a copy of the town's Renter's Notice, signed by the owner, which outlines the rules and regulations for short-term rentals in Narragansett.
  8. Application Fee: A non-refundable application fee, set at $200 for the 2024-2025 fiscal year, must be submitted with the application.

These documents serve to ensure that short-term rental properties in Narragansett are safe, well-maintained, and operated in compliance with local regulations. By gathering and submitting these required materials, property owners can successfully navigate the short-term rental permit process and legally operate their rental business in the town.

Narragansett Short-Term Rental Taxes

Short-term rental operators in Narragansett are subject to several state and local taxes. It's important for hosts to understand their tax obligations and comply with all filing and payment requirements. The main taxes that apply to short-term rentals in Narragansett are:

Rhode Island Sales Tax: Short-term rentals are subject to the 7% state sales tax on the listing price, including any cleaning fees, for stays of 30 nights or less. This tax applies to all types of short-term rentals, including entire homes, apartments, and individual rooms.

Rhode Island Hotel Tax:

  1. The 5% statewide hotel tax applies only to the rental of individual private or shared rooms in a host's home for 30 nights or less. It does not apply to the rental of an entire dwelling unit.
  2. An additional 1% local hotel tax also applies to all short-term rentals of 30 nights or less, including both room rentals and whole-home rentals.

Narragansett short-term rental hosts are responsible for registering with the Rhode Island Division of Taxation, collecting the applicable taxes from guests, and filing regular tax returns. Platforms like Airbnb and Vrbo are required to collect and remit these taxes on behalf of hosts.

Tax Deductions and Write-Offs

Short-term rental operators in Narragansett may be able to deduct certain expenses to reduce their taxable rental income. Some common deductible expenses include:

  1. Mortgage interest
  2. Property taxes
  3. Rental insurance
  4. Utilities
  5. Cleaning and maintenance costs
  6. Repairs and supplies
  7. Depreciation of the rental property

Hosts should keep detailed records of all rental income and expenses and consult with a tax professional to ensure they are properly tracking and claiming allowable deductions. By understanding their tax obligations and taking advantage of available write-offs, Narragansett short-term rental operators can run a compliant and profitable business.

Rhode Island Wide Short-Term Rental Rules

In addition to Narragansett's local short-term rental regulations, hosts must also comply with state-level requirements in Rhode Island. These statewide rules apply to all short-term rental operators, regardless of the municipality in which their property is located.

As of January 4, 2022, all short-term rental properties listed on third-party websites like Airbnb and Vrbo must be registered with the Rhode Island Department of Business Regulation. Hosts are required to provide specific information for an online database maintained by the state, including:

  1. The property owner's name and address
  2. Contact information for the owner or a designated representative
  3. The address of the short-term rental property
  4. The number of rooms for rent

Failure to register a short-term rental property can result in escalating fines:

  1. $250 for the first 30 days of non-compliance
  2. $500 for 31-60 days of non-compliance
  3. $1,000 for more than 60 days of non-compliance

The Department of Business Regulation is authorized to create additional rules and regulations to enforce the registration law and may charge a fee for property owners registering their short-term rentals.

In terms of taxes, Rhode Island short-term rental hosts must register with the Rhode Island Division of Taxation, collect the applicable lodging taxes from guests, file regular tax returns, and remit the taxes to the state. The taxes that apply include:

  1. 7% state sales tax on the listing price for stays of 30 nights or less
  2. 5% statewide hotel tax on individual room rentals of 30 nights or less
  3. 1% local hotel tax on all short-term rentals of 30 nights or less

Platforms like Airbnb and Vrbo are required to collect and remit these taxes on behalf of hosts in Rhode Island.

While complying with these statewide registration and tax requirements, Narragansett short-term rental hosts must also adhere to the town's specific ordinances regulating issues like permit caps, minimum stay lengths, occupancy limits, and more. Understanding the interplay between state and local rules is crucial for operating a successful and compliant short-term rental business in Narragansett.

Does Narragansett Strictly Enforce STR Rules?

Based on discussions among property owners and residents on forums like Reddit and BiggerPockets, Narragansett appears to be taking an increasingly strict stance on short-term rental regulations. The town council's recent passage of an ordinance placing significant restrictions on STRs, including a 7-night minimum stay requirement and a cap on total permits, suggests a clear intent to crack down on the industry.

Many locals argue that Narragansett is becoming less Airbnb-friendly compared to other beach communities, with the new rules making it harder for hosts to operate profitably. The ordinance has sparked controversy, with opponents claiming it will hurt the seasonal economy and drive up long-term rental costs without improving housing affordability.

Despite the regulations, some hosts continue to operate STRs in Narragansett, either grandfathered in under previous rules or willing to risk fines and penalties. However, the general consensus among property owners is that the town is actively enforcing the new ordinance and making it increasingly difficult to run a compliant short-term rental business.

Compared to more Airbnb-friendly cities, Narragansett seems to be prioritizing community concerns and housing for residents over the interests of STR operators. While hosts may still find ways to navigate the rules, the overall regulatory environment appears unfavorable to the growth of short-term rentals in the town.

In conclusion, based on the prevailing sentiment expressed by property owners and residents online, Narragansett is not particularly Airbnb-friendly and is strictly enforcing its new short-term rental regulations. Hosts looking to operate in the town should carefully weigh the risks and challenges posed by the local ordinances before investing in or continuing to run an STR property.

How to Start a Short-Term Rental Business in Narragansett

Starting a short-term rental business in Narragansett requires careful planning and adherence to the town's regulations. Here are the steps to get started:

  1. Determine eligibility: Check if your property is eligible for an STR permit under Narragansett's zoning laws. As of September 1, 2024, STRs must be rented for a minimum of 7 consecutive nights.
  2. Prepare your property: Ensure your rental unit meets all building, fire, and safety codes. Install smoke and carbon monoxide detectors, provide adequate means of egress, and verify your property has the required number of parking spaces. Consider making upgrades to make your property more attractive to guests.
  3. Obtain insurance: Purchase a general liability insurance policy with a minimum coverage of $1,000,000 to protect yourself and your property. Provide proof of insurance when applying for your STR permit.
  4. Register with the state: Register your STR with the Rhode Island Department of Business Regulation if you plan to list on platforms like Airbnb or Vrbo. Failure to register can result in fines.
  5. Apply for a Narragansett STR permit: Submit an online application to the Building Official, pay the required fees ($425 for residents, $850 for non-residents), and provide all necessary information, including host details, property specifications, and local representative contact information.
  6. Schedule inspections: Once your application is submitted, schedule building and fire code inspections to ensure compliance. Address any issues promptly to avoid delays in receiving your permit.
  7. Prepare for operation: Develop a comprehensive rental agreement, set competitive rates, and create a welcoming environment for guests. Consider hiring a reputable property management company to handle day-to-day operations and guest communication.
  8. Market your property: List your STR on popular vacation rental platforms and create an attractive listing with high-quality photos and detailed descriptions. Utilize social media and targeted advertising to reach potential guests.

Tips for success:

  • Stay informed about changes to Narragansett's STR regulations and adapt your business accordingly.
  • Provide exceptional customer service to encourage positive reviews and repeat bookings.
  • Maintain open communication with neighbors to address any concerns and foster good relationships.
  • Keep detailed records of all income and expenses for tax purposes and legal compliance.
  • Regularly inspect and maintain your property to ensure guest satisfaction and prevent costly repairs.

By following these steps and prioritizing compliance with Narragansett's STR regulations, you can build a successful and sustainable short-term rental business in this popular Rhode Island beach community.

Who to Contact in Narragansett about Short-Term Rental Regulations and Zoning?

For questions about Narragansett's short-term rental regulations, permits, and zoning, contact:

Narragansett Building Inspection Department
25 Fifth Avenue
Narragansett, RI 02882
Phone: (401) 782-0619

You can also find information and application forms on the Building Inspection Department's website:

https://www.narragansettri.gov/82/Rental-Registration

For additional questions, reach out to Narragansett's Building Official, Wayne Pimental, at (401) 782-0619.

Local host communities can provide valuable support and information for navigating Narragansett's short-term rental landscape:

  • Join the "Rhode Island Airbnb Hosts" Facebook group to connect with hosts in your area, discuss local regulations, and share experiences.
    https://www.facebook.com/groups/1628695257158870/
  • Participate in the Airbnb Community Center's Rhode Island forum to ask questions and learn from seasoned hosts.
    https://community.withairbnb.com/t5/Rhode-Island/ct-p/Rhode-Island
  • Check out the Narragansett 2100 guide, "Best Practices for Landlords," for tips on successfully managing rentals in the town.
    https://narragansett2100.com/images/PDFs/BestPracticesForLandlords_-_2023.pdf
  • Follow local news outlets like The Narragansett Times and Patch Narragansett-South Kingstown for updates on short-term rental regulations and ordinances.
    https://www.narragansett-times.com/
    https://patch.com/rhode-island/narragansett

By staying connected with local authorities and engaged with the Narragansett hosting community, you can ensure you have the most up-to-date information on short-term rental rules and successfully operate your Airbnb or Vrbo property in compliance with town regulations.

What Do Airbnb Hosts in Narragansett on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions in Narragansett-focused threads on Reddit and BiggerPockets, many short-term rental hosts are frustrated with the town's increasingly strict regulations. Here are some key takeaways from local hosts:

In a Reddit thread about Narragansett's 2024 ordinance banning rentals under 7 days, hosts argued the rules will hurt the seasonal economy and drive up costs without improving affordability. One commenter noted: "It seems like their ultimate goal is to eliminate all rentals unless you rent year round."

Narragansett hosts on Reddit feel the town council is catering to a small group of NIMBYs rather than the majority. In response to the 7-day minimum rule, a host wrote: "If the entire town is supposedly in favor of it, then it should be voted on in November."

On BiggerPockets, a prospective investor asked about Narragansett's STR laws, concerned about buying a property only to have it restricted. The lack of replies with definitive answers suggests even experienced hosts are unsure how regulations will evolve.

A Reddit thread on Narragansett banning duplexes to preserve "town character" drew ire from hosts and residents. One lamented: "What its turned into now is a parody of what Narragansett used to be...its a overpriced joke of a town."

Hosts argue Narragansett's anti-STR rules, along with limits on unrelated occupants, are making it unaffordable for both year-round families and seasonal tenants. A former resident shared: "I would have loved to settle in Narragansett instead, but the town won't implement policies that lead to community and a somewhat normal housing market."

The prevailing sentiment among Airbnb hosts is that Narragansett's regulations unfairly target STRs and seem designed to eliminate all but year-round rentals. Many feel the town's efforts to restrict short-term rentals will ultimately backfire, harming the local economy and eroding community character. However, hosts also acknowledge the challenging and uncertain regulatory landscape makes investing in Narragansett STRs an increasingly risky proposition.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.

⚡️
Reveal your property’s rental profitability

Buy this property and list it on Airbnb.