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Home / Business / Cape Cod vacation rentals have an unexpectedly slow summer

Cape Cod vacation rentals have an unexpectedly slow summer

"Usually I'm fully let," she said. "I think people are staying away."

The last-minute deals and vacancies may be a boon to Zauderer in late summer. Some property owners in Cape Cod attribute an unexpectedly slow summer to an annoying pair of unwanted arrivals: sharks and taxes.

Since last summer, when the first deadly shark attack took place in Massachusetts, the sharks have blocked beaches and alerted the swimmers. Taxes issued last winter took their first bite on July 1

, charging for the first time in Massachusetts hotel taxes on summer house rents, raising the already high rates by 12.45 to 14.45 percent.

  Great White Sharks at Lighthouse Beach in Chatham.
A sign warns beach-goers of the presence of white sharks at Lighthouse Beach in Chatham. (Julia Cumes for the Boston Globe / File 2015)

The Cape Cod Chamber of Commerce acknowledges that the market is declining, although there is still no data for June to know how bad it is. But the hotel room rents – with unchanged taxes – have fallen this year by about 5 percent, said the director of the chamber, Wendy K. Northcross, which noted how unusual that is. "Over the last ten years, they have grown compared to the previous year," she said.

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Northcross suspects that there are other factors in play that go beyond the sticker shock of new taxes: a wet, boring spring and an overabundance of rental properties on the market.

"The weather was not our friend," she said, an understatement for a part of the state where last week two rare tornadoes had blown.

And sharks are of course not good for the marketing of beach holidays. For safety reasons, swimming on several beaches in the Cape was temporarily suspended last week, and before Truro witnesses reported that a shark had seen a gruesome "burst of blood" when a seal had been swallowed.

But the sharks did not come to Harwich – these were the tornadoes – so Cahalane is not sure why her house is being overlooked for the first time in two decades. She stays in her parents' house during the summer, while vacationers use their home.

  The Cape Sands Inn at Yarmouth lost its roof last week's tornadoes.
The Cape Sands Inn in Yarmouth has lost its roof in last week's tornado. [19659006] (JOHN TLUMACKI / GLOBE STAFF / File)

Some real estate owners blame the new taxes for deterring vacationers – and ask if policymakers have considered all sorts of implications for the locals Wellfleet are the politicians, who levied the tax of 12.45 percent on short-term rentals for individuals' homes that are only trying to rent their summer home for a few weeks in the summer, "said Wellfleet real estate owner John Salsberg.

Massachusetts Short-Term Rentals Law was signed in December 2018 by Governor Charlie Baker. The bill was aimed at Airbnb profiteers and matched the control panel with hotels where tourists were already paying the visitor's tax. The law applies to every house that is rented for more than two weeks a year. There is no difference between a real estate company that leases dozens of properties and a year-round resident who leaves her home for the summer to earn rental income.

  A jetty in Falmouth as pictured in August 2014.
A jetty in Falmouth, as pictured in August 2014. (David L. Ryan / Globe Staff)

The tax was supported by the Chamber of Commerce and covers several levels: Legislators from Cape Cod have tackled a levy on funding to improve water quality, and some Cape Towns simultaneously lifted their local Property tax.

Each rental is subject to the state-imposed 5.7% accommodation tax, a 2.75% Water Fund tax and a local tax of either 4 or 6%.

This increased rental rates by 12.45 percent in Chatham, Dennis, Eastham, Falmouth, Harwich, Truro and Wellfleet and by 14.45 percent in Barnstable, Bourne, Brewster, Mashpee, Orleans, Provincetown and Yarmouth.

So a weekly rent for a house in Yarmouth that once cost $ 4,000 a week now costs $ 4,578.

  The Nauset Lighthouse in Eastham at dusk on May 22nd.
The Nauset Lighthouse in Eastham at dusk on May 22nd. [Nathan Klima for The Boston Globe]

Some property owners tried to mitigate the blow to tenants by lowering their rental fees. Salsberg, who owns a home on Lieutenant Island in Wellfleet with his wife and friends, cut his tax rate by 12.45 percent before the start of the season.

But his beach house with a huge deck and a wide view is still open week – and in the last week of August, even after he had discounted the price by a further 23 percent.

He estimates they lost $ 10,000 for the summer. "I would have paid the state income tax on that," he said. "All it does is hurt people like myself and tenants who are looking for a way to only be in a house by increasing their costs." whose one-week rental started technically in June. Reservations booked before the beginning of 2019 were also excluded this year.

  The head of the beach Meadow in Truro, as pictured in August 2018.
The head of the beach Meadow in Truro, as pictured in August 2018. (David L. Ryan / Globe Staff)

Stephen Giatrelis still has holes in the calendar for his luxury home on the waters of Hyannis. Even after cutting the $ 5,000 (pre-tax) tax rate to $ 4,000 a week, he was unable to hire his current tenant until Wednesday last week. And in August he still has vacancies.

"I do not know if everyone is afraid of the sharks or the taxes or what," said Giatrelis.

Typically, the house is booked for seven weeks. So far this year it has only been booked for four people.

"I've heard from all the other friends who own property that they are not there again this year," said Giatrelis, a developer and developer living in Mashpee.

Senator Julian Cyr – a Democrat who represents the Cape, grew up in the hospitality industry and has family relationships with the rental industry – said it was too early to figure out the reason for the weakness in the market. [19659002] "I think it's too early to say if there's a deciding factor," Cyr said. "I think, since these are short-term leases, we've never had a rental tax, we're out of taxes and have a tax on it, I'm sure there's a little shock."

He also noted that with the increasing ease and popularity of online sites, from Vrbo to WeNeedAVacation.com, more homeowners have been trying their luck to rent out their real estate, and some homeowners may be losing with all of the new competition.

"The Tax will definitely force the owners to work on, rebuild or at least update their properties when they rent out, "said Cape realtor Joe Baker," People are buying them because they have all these shows on TV There are a lot of people who think it's fast-paced. "

  The low tide at Cape Cod Bay provided some relief to beachcombers in Provincetown in August 2018 [19659041] The low tide at Cape Cod Bay offered some relief to beachgoers in Provincetown in August 2018. </span><span class= (Stan Grossfeld / Globe Staff)

Northcross, the chamber chief, noted that the Cape is experiencing rapid growth in short-term rental units recorded.

"It's doubled in three years," she said. "So we could look at the supply versus demand."

And despite the hype, she thinks the real estate and economic trends are probably more to blame than the sharks. In May, she said, her organization conducted independent focus groups to assess whether Cape visitors were kept away from the fear of sharks. Nobody said yes, she said; Instead, they said they would limit themselves to hip-deep seawater. In addition, hotel bookings are also declining elsewhere in Massachusetts – from Plymouth over the islands to Berkshires, she said.

] "Obviously some consumer behavior is changed," she said, "because the Berkshires are down and they have no sharks."

  White Crest Beach in Wellfleet as pictured in July 2014.
White Crest beach in Wellfleet as pictured in July 2014. (Joanne Rathe / Globe Staff / File)

Stephanie Ebbert is available at [email protected] Follow her on Twitter @StephanieEbbert.

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