Freedom, New Hampshire's Short-Term Rental Battle Heads to Housing Appeals Board

The idyllic town of Freedom, New Hampshire, known for its picturesque views of Ossipee Lake, is the latest community to grapple with regulating short-term vacation rentals. A dispute over Freedom's short-term rental ordinance is now heading to the New Hampshire Housing Appeals Board in a case that could have implications across the state.

At the center of the legal battle are Freedom residents James and Susan Cotter, who own a lakefront A-frame they rent out to vacationers. The Cotters argue that their short-term rental use existed before Freedom enacted strict limits in March 2022, so should be grandfathered. But the town claims the couple hasn't proven sufficient prior rental days to qualify for grandfathering.

The Background

In March 2022, Freedom passed an ordinance restricting short-term rentals to a maximum of 90 days per year. The rules require owners to get conditional use permits for rentals but allow grandfathering for those who can show prior annual rental use exceeding 90 days.

The Cotters, who rent their 3-bedroom home on VRBO and have done so for years, were sent a cease-and-desist letter from the town soon after the new law passed. They appealed to the Zoning Board of Adjustment, arguing the property lies in an area where short-term rentals were permitted by right before the law change. The ZBA upheld the selectmen's decision that the Cotters need a permit.

Now the Cotters are taking their fight to the state, aided by the Mt. Washington Valley Association for Responsible Vacation Rentals. The group contends Freedom lacks authority to limit rental days for a legal residential use. It aims to fund a legal challenge that could reverberate across New Hampshire.

The Legal Arguments

The Cotters have appealed the ZBA decision to the Housing Appeals Board. Their attorney argues that the ZBA made errors in upholding the selectmen's 90-day rental threshold for grandfathering. He says there is no basis in state law for municipalities to cap short-term rental days.

The town, however, maintains it has a right to regulate short-term rentals to protect community needs. Its attorney points to a state Supreme Court decision affirming towns can regulate rentals, though bans go too far. The town claims the Cotters simply failed to prove sufficient prior short-term rental use in any calendar year to qualify for grandfathering protection.

At issue is how Freedom defines "dwelling unit" in its zoning rules and whether that effectively allowed short-term rentals before the recent law change. Also disputed is whether the 90-day rental limit itself is legally sound. The Housing Appeals Board will consider if the ZBA acted reasonably and legally. Its decision could clarify how much power towns have when it comes to restricting owner rights.

The Bigger Picture

The Freedom dispute reflects larger tensions as idyllic New England towns try balancing community character and housing availability with the rise of Airbnb-style rentals. Lucrative short-term renting has exploded, alarming some residents. However, limiting owners' rental activity raises thorny issues around property rights.

For now, Freedom aims to chart a middle ground - allowing modest short-term rental activity but curbing expansion that could disrupt community needs. However, groups like the one backing the Cotters may force a reckoning on just how far towns can go in limiting a historically accepted residential use. The Housing Appeals Board could soon provide important guidance shaping short-term rental regulation far beyond Freedom.