The serviced apartment model plays a significant role in Boston, Massachusetts. A city with numerous higher education institutions, it is renowned for its medical facilities and famous events such as the Boston Marathon and the Head of the Charles Regatta. Serviced apartments play a vital and expanding role in the city’s hospitality sector.
Kama Cicero, Founder and Owner of STARS of Boston (Short Term Apartment Rental Solutions) specialises in providing serviced apartments for those coming to the city for medical reasons. Both patients and medical personnel – especially nurses. The company also provides a service for a range of guests coming to the city for a variety of reasons and who require both short- and long-term stays.
Lately, though, the regulatory environment that serviced apartment operators have had to negotiate has been complex. Kama does not contest that there were problems with short-term lets contributing to anti-social behaviour in neighbourhoods; but says that these were due to improper oversight by hosts, “We had a lot of investors coming in and buying up properties, throwing some furniture in, and then not having anyone on site, nor were they vetting people.”
Those designing the regulations, she says, could have made a distinction between these sorts of short-term lets and those rented out on a professional basis with adequate and professional management.
Boston legislation enacted in 2019
Under the new Boston legislation enacted in 2019, as well as submission to a property register, serviced apartments in the professional sector became subject to a minimum 30-day stay. Kama was initially pessimistic about how her business model would be affected, saying, “When the regulations came into effect, we thought it was over.”[i]
Kama cites a lack of knowledge about the serviced apartment sector in those making the new regulations and notes the lobbying power of larger hotels who were granted licences to operate both short and extended stays, when other professional operators of serviced apartments were not. There is also frustration around the argument that the proliferation of short-term rents was causing affordable housing to be absent from the market.
Kama notes that when these properties went back on the market after the regulations tightened, they were not properties that fell in the affordable housing bracket. There is also an occupancy tax for a stay of under 30 days of 5.7%, which is now levied on the guest. As Kama says, for those coming to Boston for treatment or to work this represents an additional burden. When the thirty-day rule came into effect, STARS of Boston made the decision to keep all their units and moved to the thirty-day model.
Then came the pandemic
Starting from March 2020, STARS of Boston were able to house medical personnel, providing an invaluable service for nurses and other professionals who were able to stay long-term in serviced apartments.
Now, despite initial misgivings, Kama says the thirty-day plus model does allow her to take advantage of operational efficiencies, and that in some cases this model can be more profitable than short stays.
However, Kama would like to be able to offer both lengths of stay, as guests require both options. Hospital patients for example, are often unable to gauge how long their stay will be, either short or long, and they often bring family. Shorter stays than thirty days are required by those visiting universities or sightseeing with family and wanting to self-cater.
In all, the situation in Boston has been frustrating for operators such as STARS of Boston, who want to offer both long- and short-term serviced accommodation but find themselves unable to do so at the present time.Access Full White Paper
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