Short-Term Rental Regulations

Issues Addressed:
Housing Costs Housing Options

What is it?

Online markets for overnight and short-term homestays (such as AirBNB and VRBO) have grown exponentially over the past decade, particularly in prosperous urban areas, tourist destinations, and near economic anchors that draw in visitors (like universities). As short-term rentals (STRs) have taken up a small but significant share of housing in some areas, the growth in the cost of long-term housing has risen considerably. Although there is no one cause for the rapidly increasing cost of housing, there is a growing body of evidence that suggests that the growth of STRs has fueled some of the price increases in some places. There is a growing concern in these STR-heavy markets that neighborhoods are slowly being turned into hotels, especially as the country faces a housing shortage generally.

Cities and towns can restrict STRs under state law. A growing number of communities, particularly in the mountains and along the seacoast, have done so in recent years. By 2022, over thirty cities and towns in the State had adopted some form of regulations restricting STRs.  Many simply amended the Zoning Ordinance and added a definition and a new use category; some communities have required owner occupancy of a building with an STR; a number of municipalities also clarified the process for review. Some municipalities are allowing maximum occupants per room, maximum nights rented per year, fees for registration and inspection, and other restrictions.

STRs can take many forms. For example, they can be owner-occupied (where the owner rents a room or accessory dwelling for extra income). They can also be seasonal rentals by “snowbird” owners. They can also be owned by professional STR operators, who buy homes (sometimes many homes) for the express purpose of converting them to STRs. (The latter was increasingly common in the late 2010s and early 2020s, though that business model is becoming more difficult with increasing regulations, competition from the hotel industry, and higher interest rates.) Homes can operate as STRs sporadically or full-time. 

There is not, however, one definition that is mandated and communities are mostly free to define STRs as they choose in their zoning ordinance. Your community may want to regulate all, some, or none of the variants of STRs, but it should consider as many variables as possible in its regulations, in order to prevent bad actors from gaming the regulations.

How can it help?

STR regulations can…

  • Limit the conversion of long-term housing stock to hotel uses via STRs.
  • Target certain areas over others for STR uses.
  • Protect neighborhoods from the negative impacts of STRs and absentee landlords.
  • Establish clarity for both homeowners and professional STR operators, including thresholds for when an accessory STR in a person’s home becomes a regulated STR.
  • Establish consistent treatment for different types of lodging uses in zoning.
  • Increase local Meals and Rooms Tax revenue from STRs that may otherwise fly under the radar.
  • Increase demand for traditional hotel developments, which will reduce pressure on the long-term housing market, have a greater local economic impact, and can revitalize underinvested areas in your community.

Getting Started

  1. Evaluate the impact of STRs in your community. Look on major STR provider websites to view active listings, collecting data over several months and removing duplicate listings. Via this data, assess whether STRs have a significant presence in your community, where they are located, and what the potential draws are for STR tenants. Speak with STR providers to learn about the local STR business models and customers. Decide whether regulation is necessary.
  2. If undertaking a master plan, include your evaluation in the plan and recommend STR regulations if needed.
  3. Conduct an audit of current regulations to determine where STRs are allowed in your city or town, how hotel lodging is defined generally, and whether the current market is complying with these regulations.
  4. Hold a public engagement process to gain input on what types of STR operations should be allowed (if any) and what types should be regulated as hotel uses (if any).
  5. Draft an ordinance that amends zoning to clearly define an STR, set thresholds for regulation, set a process for permitting and review, and set any additional restrictions on STR operators (e.g., owner-occupancy).
  6. Establish a system of registering and monitoring STR operations in your community.


  • There are many arguments STR operators make to claim regulation is illegal, though lawmakers and courts have tended to find those arguments unconvincing. Authority to make regulatory distinctions between long-term and short-term lodging are already embedded in state law, which makes the distinction in RSA 48-A and RSA 78-A, which addresses housing standards and lodging taxation, respectively.
  • For many communities outside of prosperous urban and tourist markets, STRs are not occupying a significant part of the housing stock. In those cases, STR regulation is unlikely to impact the housing market.
  • For NH Meals and Rooms Tax purposes, a room or home is considered an STR if it has tenancies of less than 185 days. This may be a convenient standard to set as the difference between a long-term residence and an STR. Some communities, especially in college towns with many student rentals, may find this definition will not work for them.
  • Treat an STR as you would other commercial uses for lodging, similar to a hotel. As such, they would require site plan review, unless exempted, and may require other local approvals depending upon the regulations.
  • Owner-occupied STRs are less likely to cause problems for the community.
  • Consider adopting additional (non-zoning) STR regulations to minimize impact on abutters (quiet hours, number of vehicles, etc.).
  • For communities with many seasonal residents, STR regulation will not likely return seasonally vacant units to the long-term market.
  • Consistent enforcement of STR regulations is key to achieving your community’s outcomes.