Narragansett halts short-term rental regulations after landlords file lawsuit

Judge Allows Newport to Ban Short-Term Rentals in Residential Zones Under Zoning Ordinance

NARRAGANSETT − Is the city breaking state law by limiting the number of short-term rentals?

A group of property owners believe that’s the case and have filed a lawsuit against the city seeking to invalidate the new rental licensing ordinance and halt enforcement until a judge determines whether it is legal.

Currently, the city resolution on issuing licenses, adopted on May 6 and scheduled to come into force on August 1, has been suspended at least until September 16 based on an agreement between the city and the people suing it.

At a hearing on September 16, both sides will discuss whether a temporary injunction stopping the enforcement of the order until its legality is determined should be granted or lifted.

Stephen Lapatin, an attorney representing the Narragansett 2100 property owners group, said it’s possible the judge will issue a ruling on his own, but they likely will have to wait a while for a written decision because the issues are so complex.

The city has the authority to regulate short-term rentals, but by limiting the number of rentals through a licensing system, the city violated the state Constitution and precedent dating back to the 1960s, Lapatin said.

A lawyer representing the city in the dispute, Michael DeSisto, said he was not authorized to speak and referred questions to city attorney Mark Davis.

Davis had not responded to a request for comment by the time the newspaper went to press.

For more on the current state of short-term rental regulations, check out reporter Patrick Anderson’s in-depth analysis, including this analysis of Narragansett.

Licensing is a state matter

Lapatin said he believes landowners have the best chance of winning because the city is trying to create a licensing system that would limit the number of licenses available, which is not a right granted to municipalities under the “Home Rule Amendment” to the state constitution.

Precedent dictates that only the state has the authority to issue licenses. By limiting the number of short-term rental permits available, Narragansett has encroached on state-controlled territory, creating a system similar to the limited number of liquor licenses that can be issued, Lapatin said.

“Our position is that it is unconstitutional,” he said. “Theoretically, they could dress it up however they want, but even if it is a licensing ordinance in zoning laws or business laws, it is still unconstitutional.”

A judge initially dismissed a challenge to Newport’s strict short-term rental laws, which prohibit rentals in residential zones, finding that the city has the right to regulate such rentals through its zoning ordinances.

In his opinion, the heart of the problem is the limitation on the number of licenses.

“I don’t know how they could limit the number of licenses and not make it a licensing ordinance,” he said. “I don’t think that’s possible.”

What is the Narragansett Ordinance?

The Narragansett ordinance establishes a short-term rental licensing system and sets the maximum number of licenses issued at 1,100 in the first year, then decreases by 100 each year until it reaches 900 in 2026.

In the lawsuit, Lapatin wrote that the ordinance would allow city officials to set any number of licenses issued in 2027.

The regulation also states that:

All rentals must be a minimum of seven days.
Rental properties cannot be used for events such as weddings, banquets, stag/hen parties or corporate events.
It is prohibited to use or store boats on the premises of rented properties (property owners have the right to do so).
Licenses will be awarded on a first-come, first-served basis.
Registration of premises rented on a short-term basis by owners would be possible one week before registration of premises rented by non-owners.
Short-term rentals will need to be inspected by a city building inspector and firefighter.
New applications will need to be submitted each year.
Bedrooms must be at least 70 square feet to be rented, or 120 square feet if shared by two people.
Each rental requires one off-street parking space per bedroom, or two even for a one-bedroom unit.
Each parking space must be 20 feet long by 10 feet wide and cannot be grass. (For properties with five or more bedrooms, each off-street parking space must be 300 square feet or at least 90,000 square feet of parking area.)
A shed, trailer, garage, tent or tree house cannot be used as part of the rental.

Narragansett 2100 spokesman George Nonis said owners of short-term rental properties, including those who rent for a few weeks a year, want the flexibility in the spring and fall to rent for less than seven days to accommodate weddings, off-season vacations and families coming for University of Rhode Island events, such as graduations.

The latest precedent for short-term rentals comes in Newport, where the city banned short-term rentals in residential zones and required owners to obtain special use permits.

The difference between Newport and Narragansett is twofold: Newport implemented the ban as part of its zoning ordinance and did not create a limited number of licenses.

Recent changes in state law have moved special use permits from giving municipalities the discretion to deny a permit to requiring approval if they meet specific requirements set forth in the ordinance.

Judge William Carnes Jr. ruled that a relatively new state law prohibiting municipalities from preventing homeowners from listing rentals on online platforms does not prevent a ban on short-term rentals under state zoning laws.

Narragansett didn’t go as far as Cumberland, which banned all short-term rentals in the city under the auspices of its zoning ordinance, according to The Valley Breeze. State law prohibits cities and towns from blocking homeowners from listing their homes on online rental platforms.

Reducing Short-Term Rentals in the Wider Context of Housing

To Nonis, the effort to limit the number of short-term rentals in Narragansett is part of a plan to drive out anyone who isn’t part of the “elite” — people who can afford to own property in the city.

“They want to be an elite city and let someone else worry about the housing crisis,” Nonis said.

Nonis said the City Council’s current actions are “part of a big puzzle because they want to be an elite city.”

In meetings about short-term rentals, students and the city’s housing shortage, there is rarely, if ever, mention of owners of second-home vacation homes in the city.

Narragansett is making a concerted effort to make it harder to build or live in the town, based on the theory that not enough families live there or can afford to buy in Narragansett. (The entire state is in a housing crisis, not just Narragansett.) Nonis said all of these problems are tied to the desire to be an “elite town”:

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Contact reporter Wheeler Cowperthwaite at [email protected] or follow him on Twitter @WheelerReporter.