Falmouth municipal officials are moving forward with proposals to update the town’s short-term rental ordinance with new requirements that include an annual fee, emergency contact and proof of insurance.

Since 2022, Falmouth’s short-term rental ordinance has tightened restrictions on homeowners seeking to rent out all or a portion of their units for a period of less than 30 days, introducing a registration program to monitor, record and assess the impact of short-term rentals within the town.

On Wednesday, Feb. 5, the town held a forum to update residents on the requirements of the registration program, collect comments from the public on the ordinance as a whole, and provide data on the presence of short-term rentals in Falmouth. Collecting comments completes one of the Ordinance Committee’s steps in reviewing its policy, which is also a priority outlined in the town’s 2024-2025 Work Plan.

Assistant Town Manager Maggie Edson presented the major points of the ordinance:

• owners must register their rental with the town, an annual requirement with a $300 fee;

• owners need to designate an emergency contact person who can quickly address conditions of the unit and behavior of guests;

• and owners must provide a certificate of insurance, either self-owned or through a housing rental platform such as Airbnb or Vrbo. Renting without a valid registration incurs a fine of $1,000 per day for the first offense, increasing to a charge of $1,500 per day for additional offenses, and a $500 penalty for violating any other categories of the ordinance.

The ordinance, through its registration program, has equipped the town with the ability to track the volume of short-term rentals. As of Jan. 31, there were 80 active rental units in Falmouth. Since the beginning of the year, residents have submitted 60 rental applications, accruing $17,700 in registration fee revenue.

Edson explained that a majority of that revenue has covered the annual cost of Host Compliance, the software that Falmouth and many municipalities use to implement and monitor short-term rentals.

Along with rental data, Edson presented some preliminary community feedback.

“Staff do not hear many complaints about specific units in terms of parties, people being loud or traffic,” Edson said, acknowledging that those disturbances are most likely occurring but not reflected in direct comments to town officials. But she said that feedback from residents in multiple neighborhoods may prompt the town to amend the ordinance to address emerging issues within renting pockets of Falmouth.

“The residents of Highland Lake are working really hard on water quality and they have expressed concern that there might be more people staying at these units than they have the septic capacity for,” she said.

Additionally, Edson said that several members of the Flats neighborhood, also known as the Falmouth Foreside area, noted that rental capacity is becoming too dense, affecting the “neighborhood feeling” of the community.

Attendees provided feedback to the town in breakout groups, mirroring popular points of support and concern that many small towns face with an increased bump in short-term rentals. Residents noted that short-term rentals provide an important revenue for many, supplementing a regular income and helping meet mortgage payments. Another supporting point noted that these types of rentals offer lodging options for visitors in the area which has a limited amount of hotels.

But feedback also expressed that short-term rentals remove homes from the market which could be used for year-round residents or workforce housing. In addition, some residents worry that the high density of short-term rentals strips away an important identity and feel of the otherwise year-round neighborhoods.

“At this time we do not have any next-step plans,” Edson said.

All comments from the forum will be collected and conveyed to the Ordinance Committee at its next meeting, she said.