Short-Term Rental Regulations Case Studies

Issues Addressed:
Housing Costs Housing Options

Hanover, NH

In 2020, after considerable study of the STR market and example regulatory mechanisms, the Town of Hanover decided to regulate STRs. The Town distinguishes between hosted STRs, where the owner is present on the premises through the rental, and unhosted STRs, where the owner is not present. STRs may not be operated by investors (the STR must be the owner’s principal residence), and unhosted STRs are not permitted in ADUs. STRs must be registered with the Town. The STR regulations, though passed in 2020, became active with the adoption of broad rental regulations in 2022.

Boston, MA

Boston passed STR regulations in 2019, allowing them under certain conditions. It recognizes three classes: limited share rentals (where a spare bedroom in the operator’s home is the STR), home share rentals (where the home the operator occupies is sometimes a STR), or owner-adjacent rentals (where another unit in a duplex or triplex the operator owns and lives in is an STR). All STRs must be in owner-occupied buildings and cannot exist in buildings with more than three units. STRs must register with the city and pay a fee. The estimated number of STRs in Boston decreased from roughly 6,000 before the regulations to 841 in 2021.
A screenshot from Boston’s online guide to its STR regulations.

San Diego, CA

San Diego recently passed STR regulations with the goal of limiting STRs to 1% of the total housing stock. Similar to Boston, San Diego recognizes multiple classes of STRs based on characteristics of the home and rental practices. San Diego’s tiers are partly based on the number of days rented, with fewer restrictions on owner-occupants who rent their home for less than 20 days, intermediate restrictions for owner-occupants who rent their home for more than 20 days but still live there most of the time, and significant restrictions on full-time STRs. STR operators must apply for a license, and a limited number of licenses are granted on a lottery basis. City of San Diego, “Short-Term Residential Occupancy (STRO),”

Portsmouth, NH

The City of Portsmouth passed a local ADU ordinance in 2017, which allows attached and detached ADUs by Conditional Use permit across many of its zoning districts. ADUs may be no larger than 750 square feet in most cases. Either the primary home or 12 Accessory Dwelling Units (ADUs) the ADU must be occupied by the property owner, and this must be verified annually. Since the law’s passage, 31 ADUs have been permitted and 25 have begun construction. The City’s Planning Board has considered ways to simplify permitting, as one estimate places a price tag of $20,000 to $30,000 in permitting costs alone. Several amendments have been proposed to the ADU law, with the stated aim to make ADU production easier.
  • City of Portsmouth, “Land Use and Zoning Regulations” 
  • Portsmouth Herald, “Accessory dwelling units in Portsmouth: 'Easiest' housing solution or is it too late?” (November 29, 2022)
  • Portsmouth Herald, “As popularity of accessory dwelling units grows, Portsmouth looks to simplify permitting” (July 26, 2022)

Conway, NH

A case currently before the NH Supreme Court is a challenge to the Town of Conway’s requirement that STRs must be owner occupied.