Rep. Stanley Files Council Resolution to Raise $354K Annually for Affordable Housing

Rep. Stanley recently filed a City Council resolution studying the community impact fee (CIF) on short term rentals, hoping to raise funds for affordable housing initiatives to meet the increasing need for affordable homes for individuals and families in Waltham. The state’s short-term rental tax is currently six percent of a room rental charge while the CIF is three percent of a room-rental charge. Assuming the added CIF charge does not negatively impact travel or tourism, Waltham could expect an additional 50 percent revenue from short-term rentals. Therefore, if the CIF was fully implemented by Waltham in September 2021, the City would receive $354,265 annually in additional funding (up to 50%) which could then be allocated to affordable housing initiatives. View the Department of Revenue’s annual rooms tax revenues collected for Waltham for 2019, 2020 and 2021 thus far below.

Worksheet:

$5,060,931. FY’19 (Pre-Pandemic)

$4,520,810. FY’20 (Pandemic began in last quarter)

$483,263. FY’21 (1/2 of fiscal year totals During Pandemic)

The September quarter revenue figures for the same three fiscal years were:

$1,398,821. FY’19 (Pre-Pandemic)

$1,553,857.  FY’20 (3/4 YR Pre-Pandemic + included Short Term Rentals for 1st time)

$333,815. FY’21 (During Pandemic)

For the first time, DOR database separates hotel and short term rental LO Room Tax in Sept. FY’21 quarter:

$333,815 FY’21 Sept. Quarter (During Pandemic) Reflects Summer Travel

$ 87,430 – Short Term Rental LO Tax

$246,385 – Traditional Hotel Lodging LO Tax

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$333,815  (35% from Short Term Rental LO Tax / 65% from Traditional Hotel Lodging LO Tax)

$149,448 FY’21 December Quarter (During Pandemic) Reflects Fall Travel

$  18,708 -Short Term Rental LO Tax

$130,740 – Traditional Hotel Lodging LO Tax

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$149,448  (14% from Short Term Rental LO Tax / 86% from Traditional Hotel Lodging LO Tax)

• The Short Term Rental Tax is 6% of room rental charge. The Community Impact Fee (CIF) is a 3% room rental charge. Assuming the added CIF charge does not affect travel, Waltham could expect an additional 50% revenue on Short Term Rentals. Therefore, if the CIF was implemented fully in the Sept. FY’21 Quarter Waltham would have received $43,715 ($87,430 / 2 = $43,715) for affordable housing in that Pandemic quarter alone.

•  The Waltham Short Term Rental percentage of the room tax revenue collection was 35% and 14% for the only two quarters DOR-DLS separated out the percentages.

• Utilizing the lower 14% separation of total LO Room tax and the total collected in fiscal years ‘19 and ‘20, Waltham could bring in hundreds of thousands of dollars for affordable housing initiatives in a Post Pandemic World:

• $5,060,931 x 14% = $708,530 / 2 = $354,265 in CIF for Affordable Housing Annually.

• $4,520,810 X 14% = $632,913 / 2 = $316,456 in CIF for Affordable Housing Annually.