NEWPORT, R.I. (WPRI) — About 30 million tourists come from all over the world to stay in the Ocean State each year, and many people choose to stay in short-term rentals. Short-term rental advocates estimate those visitors spend about $23 million on food and drinks in local restaurants alone, bringing dollars that flow throughout the Rhode Island economy. Critics, however, argue the bourgeoning hospitality sector is putting pressure on housing availability amid a crisis that's demanding an ever-expanding toll of taxpayer dollars. The debate over the short-term rental market is especially heated in Newport, where Mayor Xay Khamsyvoravong said 3.5 million visitors come through his community of 25,000 people each year. "Newport is taking a careful look at how we strike the right balance of maintaining this place as a home for the people that make it such a sincere and genuine location that people love coming to visit," Khamsyvoravong said. "But also ensuring that it has that balance, that it needs to continue being a functional community." About 60% of people who live in Newport are renters, and Khamsyvoravong said outside investors have been scooping up Newport properties for rentals -- making it difficult for people to find an affordable place to live in the city. Newport is one of several communities in the state that's implementing local regulations related to the short-term rental market. The city has specific regulations depending on what area of the city the short-term rental property is located. For example, short-term rentals in residential zones must last at least 30 days unless the home is the owner's primary residence. Owner-occupied properties can rent up to two rooms to no more than four people. The city also rolled out its own short-term rental registry, which is similar to the state's registry. Khamsyvoravong said the local registry has allowed the city to crack down on homeowners or developers who don't register their properties. "This past year, since March, we have issued 115 violations," Khamsyvoravong said. "We now are at the point where we have to employ a person full-time, just to help us deal with the compliance of short-term rentals." Landlords are required by law to register their short-term rental property with municipalities that have their own registries. The R.I. Department of Business Regulation (DBR) oversees the state's registry. Khamsyvoravong said city officials are finding discrepancies in the data when comparing the local numbers to the state's registry. "You have the state registry, which has about 685 units, that it reflects in Newport," he said. "And then you have the city's registry, which is about half of that." Newport also tracks down landlords who are not complying with the registry. In some cases, landlords face fines, and some are taken to court. According to a spokesperson from DBR, the state has not fined a single landlord for not complying with the state's registry, since the Department wasn't given any resources to help enforce the law. State Representative Lauren Carson, a Newport Democrat, has been working with other lawmakers on a commission that has been studying the effects of short-term rentals since 2023. "The expansion of this industry has really caught municipal and state governments and county governments, some places, really by surprise," Carson said. She said the state is playing catch-up to many municipalities that already have their own short-term rental regulations in place. "There's about ten municipalities that have ordinances," Carson said. "It's sort of like a mishmash of things." Carson said she hopes to create a statewide framework for municipalities to follow to help with regulations. She said the commission is looking into whether or not to tax short-term rentals like hotels in the state, which pay a 5% hotel tax. "My opinion is that they really are businesses," Carson said. "The platform themselves, Airbnb, Vrbo, they are businesses." Sarah Guernelli ([email protected]) is the consumer investigative reporter for 12 News. Connect with her on Twitter and on Facebook. Close Thanks for signing up! Watch for us in your inbox. Subscribe Now Special Coverage & Notices SIGN UP NOW