SALEM — A broad set of rules governing short-term rentals like Airbnb in Salem passed City Council Thursday night, with rules due to take effect in April.

Under the rules, short-term rentals would be prohibited in residential single-family (R1) zones, bringing them in line with lodging houses and bed and breakfasts, which are also prohibited in R1 zones. They'd be allowed in other residential zones like two-family (R2) with $100 registration fees and fines also passed Thursday night.

Now, the City Council will meet with the Planning Board on Monday, Sept. 17, on whether existing short-term rentals without property owners living on-site would be grandfathered into the policy. 

City officials have been working on rules governing short-term rentals, like property owners marketing rooms on Airbnb, for several months. Airbnb reported last year that Salem hosts collected $400,000 in October alone, with nearly $100,000 brought in on Halloween itself. But neighbors living near the rentals have complained of the nuisances brought by continuous "tenant" turnaround and lack of oversight of those tenants.

Salem's ordinance changes allow for short-term rentals in two categories: owner-occupied units, like an available room in a home where the property owner lives; and owner-adjacent units, such as a property owner with a two-family home renting out one part while living in the other.

Non-owner-occupied units, specifically those where property owners don't live on-site, are prohibited under the ordinance. That change was designed to curtail developers from buying residential property and converting every room to a short-term rental unit, but non-owner-occupied units that existed before the ordinance was filed in July would be grandfathered and allowed via a special permit. 

But as councilors debated proposals in committee, the idea of grandfathering those units became a sticking point. Along the way, a $100 registration fee requirement was also added for residents wanting to host short-term rentals, according to assistant city solicitor Vickie Caldwell.

Along the way, the proposals picked up opposition from Airbnb and an area realtors association, according to Caldwell.

"They're not keen on this," Caldwell said. "Nobody is against regulation and registration, but the realtor's association and Airbnb made a strong pitch."

In a letter sent to Mayor Kim Driscoll on Sept. 5, Airbnb public policy team member Andrew Kalloch described the rules as "a byzantine system with complicated rules, some of which jeopardize the financial security and privacy of resident hosts and others which may conflict with decades-old federal law."

"Moreover, the new proposal is wholly unnecessary, as Salem already has a law on the books that creates a simple registration and inspection system for resident hosts, giving the city a window into (short-term rental) activity and ensuring that rentals are safe for all users," Kalloch wrote. "We urge you and the Council to set this deeply problematic proposal aside and embrace models that have proven to be effective in mid-sized cities like Salem."

Speaking during the meeting, Ward 5 City Councilor Josh Turiel acknowledged the rules aren't popular with renters. But at the same time, "the investor, short-term rental market is not really a market I want to service in this community."

"The problem we have, and we've had for some time, is the escalating cost of rentals," Turiel said. "The market here is hot. It's almost too hot, and it's great if you want to sell your home — but that's the only time it's great."

The City Council ultimately set a date of April 15, 2019 for the rules to take effect. That was done to allow property owners to prepare for the changes, as well as property owners who have already booked rooms to go through those bookings uninterrupted.

The joint public hearing digging into grandfathering non-owner-occupied rentals will be held in the City Council chambers, on the second floor of City Hall at 93 Washington St., on Monday, Sept. 17 at 6:30 p.m.

Contact Salem reporter Dustin Luca at 978-338-2523 or Follow him on Facebook at or on Twitter @DustinLucaSN.