The New Hampshire Supreme Court Rules Against Short-Term Rentals In Portsmouth Residential District
By Jonathan M. Boutin
October 3, 2019
In a highly-anticipated decision, the New Hampshire Supreme Court has ruled that a property used for short-term rentals constituted a transient use and was therefore prohibited in one of Portsmouth’s residential districts. The case, Working Stiff Partners, LLC v. City of Portsmouth, has attracted considerable attention as municipalities struggle with enacting regulatory measures to address the surge in short-term rentals around the state. The property at issue is a four-bedroom house, in which the owners did not reside, but advertised for short-term rentals on AirBnb. The property is located in Portsmouth’s General Residence A (GRA) district, where single-family and two-family dwellings are allowed. Hotels, motels and boarding houses, on the other hand, are expressly forbidden. The City issued a cease and desist order, which the property owners unsuccessfully appealed to the Zoning Board and then the Superior Court. Before the Supreme Court, the property owners argued, among other things, that the property was a single-family dwelling (a permitted use in the GRA District) because, unlike hotels, motels and other transient uses, the property had independent cooking and bathing facilities. The Court disagreed, focusing on the property’s use, not on its physical characteristics. The Court concluded that providing short-term rentals to paying guests on a daily basis is inconsistent with the Ordinance’s definition of a dwelling unit, regardless of whether the property also provided its guests with independent living facilities. As such, the Court upheld the lower court’s ruling that the using the property for short-term rentals was not allowed in the GRA district.
The Court’s opinion in Working Stiff Partners will likely have statewide implications for online rental platforms like AirBnb and VRBO. Despite its prevalence, short-term rentals are still a relatively new phenomenon, and New Hampshire cities and towns (as well as private home owners’ and condominium associations) are still learning how to navigate this new reality. At a minimum, this ruling could have a chilling effect on the short-term rental industry across the state as municipalities refer to it as a guide to prohibit short-term rentals in residential or similarly restrictive zones.