City Council STR Ordinance

In August 2024, Gloucester’s City Council passed a sweeping short-term rental ordinance. Despite questions raised by industry experts and residents, the Council moved forward with amendments that may not have been fully evaluated for their long-term impact on Gloucester’s economy.

In moving quickly with this decision, the Council may have overlooked the complexities of the issue and the potential benefits a strong short-term rental industry brings to local businesses. As a result, both residents and hosts will face the effects once the ordinance takes effect on January 1, 2025.

Learn about key components of the ordinance below.

  • Short-term rentals in non-primary residences are limited to 120 days per year. Primary residences can be rented for up to six months, while shared units (with the owner present) may be rented year-round.

  • Existing short-term rentals registered with the Massachusetts Department of Revenue are temporarily exempt from some of the ordinance's new restrictions. These exemptions expire after three years, after which all properties must comply with the new rules.

  • All short-term rentals must register annually with Gloucester's Inspectional Services Department. The fee is $100 for shared residential units, $150 for primary residences, and $300 for non-primary residences.

  • Corporate ownership of short-term rentals is prohibited. LLCs, trusts, or S corporations may own properties as long as all members are individuals. Only one property per operator can be registered as a short-term rental, restricting multi-property listings.

  • The ordinance imposes strict penalties for non-compliance. Properties that receive three or more violations within a six-month period may be ineligible to operate as short-term rentals for six months. Each violation is subject to a $400 fine per occurrence, with each day of non-compliance counting as a separate offense.

  • The ordinance limits occupancy to two guests per bedroom, with an additional two guests for the unit. Septic systems must comply with deeded occupancy limits.

  • Hosts must display the following information in their rental units.

    • Trash Disposal Information: Clear instructions and schedules for trash and recycling.

    • Parking Regulations: Information on local parking rules, including resident-only restrictions and snow emergencies.

    • Noise Ordinance: Information on Gloucester's noise regulations.

    • Safety Information: Display the location of fire exits, extinguishers, and gas shut-off valves.

    • Contact Information: A 24/7 contact number for the host or agent must be clearly displayed.

-42%

Expected Loss in Revenue Per Listing

After Grandfathering Period Ends 

(see footnote 1)

What can we do today?

  • Organize and amplify the voice of Gloucester’s short-term rental community by joining GTAG.

    Together, we advocate for balanced, fair regulations that protect our rights as hosts while ensuring Gloucester’s tourism industry thrives. By working as a united front, we not only safeguard our businesses but also support the local economy, creating jobs and sustaining the vibrant culture that makes our city special.

  • Reach out to City Council to share your thoughts on how the new STR ordinance impacts you and the community.

    See below to find members of the city council.

  • Talk to fellow hosts and local businesses—like cleaners, maintenance teams, and restaurants—about the importance of supporting a balanced STR market. Raising awareness with those directly impacted strengthens our collective impact and helps protect the local economy.

  • Feel free to reach out to Allie at allie@gloucestertourismadvocacygroup.com or call (978) 212-9775.

    As fellow hosts, we understand the concerns these new regulations bring and are here to help you navigate this changing landscape. Let’s work together to find solutions and keep our businesses thriving.

Gloucester City Council

  • Tony Gross

    Council President

    Email

  • Jason Grow

    Councilor at Large

    Email

  • Val Gilman

    Councilor at Large

    Email

  • Jeff Worthley

    Councilor at Large

    Email

  • Scott Memhard

    Ward I Councilor | East

    Email

  • Dylan Benson

    Ward II Councilor | Downtown

    Email

  • Marjorie Grace

    Ward III Councilor | Downtown

    Email

  • Frank Margiotta

    Ward IV Councilor | Northeast

    Email

  • Sean Nolan

    Ward V Councilor | West

    Email

Questions to ask our City Councilors

    • What data supports the need for additional regulations?

    • What research backs the claim that Airbnbs are negatively impacting the housing market?

    • How will the new regulations be evaluated for their effectiveness in addressing housing or community concerns?

    • What steps were taken to consider the positive economic impact short-term rentals have on local businesses and tourism?

    • What specific performance indicators will you use to evaluate their impact?

    • When do you plan to revisit or reassess the effectiveness of these regulations?

    • Why do Airbnbs pay higher taxes than hotels in Gloucester?

    • Why has the growth in Airbnb and VRBO listings remained flat since pre-COVID, according to AirDNA data?

    • How do you plan to ensure that short-term rental regulations don’t negatively impact Gloucester’s tourism and small businesses?

    • What evidence supports the claim that short-term rentals disrupt the residential character or livability of neighborhoods?

    • How will restricting short-term rentals improve quality of life without negatively impacting local tourism and small businesses?

    • What measures are in place to balance these rules with Gloucester’s need for a strong tourism industry?

    • How specifically do these regulations enhance the health and safety of guests and residents beyond existing standards?

Sources and Data

1. Source: AirDNA. The 42% loss in rental revenue is based on an analysis of average ADR (Average Daily Rate) and occupancy rates for short-term rentals in Gloucester as of November 2024. Data reflects historical averages provided by AirDNA.

Without restrictions, an average short-term rental listing generates $73,735 annually, assuming Gloucester’s average ADR of $370 and an average occupancy rate of 52% over a full year. This revenue includes cleaning fees.

Under the 120-day limit, operators would likely choose to focus on high-demand months (May through October) to maximize revenue. However, they would need to reduce the number of days rented in May by 5 to comply with the 120-day cap. Optimized operations during this period would increase the ADR to $412 and occupancy to 68%, resulting in annual revenue of $42,826. This represents a 42% reduction in revenue, even with operations concentrated during peak demand.