Narragansett Wrote a 900-Permit Cap on Short-Term Rentals. It Has Never Taken Effect.

If you're touring a rental cottage in Narragansett this fall and the seller mentions "the permit conveys" or "there's a waitlist forming," which rule are they actually talking about? The one the town council passed in 2024, or the one the town currently enforces? These are not the same rule, and the gap between them is exactly where a buyer's underwriting can go wrong.

Narragansett has more short-term rentals than any other town in Rhode Island, a fact town officials have cited repeatedly while trying to regulate them. In May 2024, the town council approved an ordinance that would cap short-term rental permits at 1,100 for the year beginning that September, dropping to 1,000 in 2025 and 900 for the year beginning this month, as The Public's Radio reported. The ordinance also barred any rental shorter than seven nights. The Town of Narragansett's rental Q&A lists a $375 annual permit fee for resident owners, $750 for nonresidents, plus separate application and re-inspection fees.

The 900-permit cap has never gone into effect.

What's Actually Enforceable Right Now

A group of about 370 property owners calling itself Narragansett 2100 sued the town in July 2024, arguing the ordinance exceeded the town's authority under Rhode Island's Home Rule Amendment. Superior Court Judge Sarah Taft-Carter agreed with enough of that argument to grant a temporary restraining order and then a preliminary injunction in October 2024, and the Boston Globe covered the ruling as a real setback for the town. The court found two problems. First, the seven-night minimum likely conflicted with state law protecting an owner's right to advertise short-term rentals through hosting platforms. Second, and more procedural, the town had adopted the ordinance as a business regulation rather than following the public hearing and notice requirements the Zoning Enabling Act demands for anything that functions like a zoning change.

STR HUB's Narragansett guide says the injunction remains in effect. What remains enforceable in Narragansett today is a much older, much plainer requirement: the town's general rental registration. The Town of Narragansett's rental-registration page says every owner of a rental property, short-term or otherwise, must file or renew that registration by August 31 each year, and it runs from September 1 through the following August 31. The fee is $120 annually. There is no permit cap attached to it, no seven-night minimum, and no waitlist. It is the rule that's actually been governing supply in Narragansett for the past two years, not the one everyone quotes.

The Timeline Nobody Quotes in Full

The Narragansett Times reported that at the December 2025 meeting, Town Solicitor James Callaghan called the existing ordinance "not enforceable 'at this time'" and recommended the town start over by folding short-term rental rules into the zoning code instead of treating them as a business license. Not everyone in the room agreed with that read. Resident Gail Scowcroft pushed back, pointing to the outside law firm that drafted the original ordinance and arguing it was sound. Council President Alex Menzies said he had confidence the town could build momentum toward a fix. Nearly two years after the ordinance passed, the town is still deciding how to write a version that survives a courtroom.

Why the Vehicle Matters More Than the Goal

The lesson here isn't that Narragansett can't regulate short-term rentals. Courts elsewhere in the state have upheld similar goals when towns used a different legal tool. In 2025, a Rhode Island court upheld a special-use permit requirement in the town of Exeter precisely because it was framed as land use regulation rather than a licensing scheme layered on top of advertising rights. That's the same fix Callaghan is now recommending for Narragansett: rebuild the seven-night minimum and the permit cap as a zoning amendment, not a business ordinance, and it stands a much better chance of holding up.

If the town gets there, the rules you've read about online, the 900-permit ceiling, the seven-night floor, could eventually become real. They just aren't yet, and there's no published date for when that might change.

What This Means If You're Buying an Income Property

If you're evaluating a Narragansett property with the idea of running it as a short-term rental, a few specifics from this timeline should shape how you underwrite the deal.

1. An existing "STR permit" isn't a transferable asset right now. The permit system it would belong to has been enjoined since October 2024. If a seller frames a permit as scarce or valuable because of the declining cap, that scarcity doesn't currently exist in enforceable law.
2. The state registration doesn't transfer to a new registrant. The Rhode Island Department of State regulation says a new registrant must apply for a new registration if the registrant changes. If you buy a home with rental income history, you'll need to register fresh under your own name before you can legally list it, whether on Airbnb, Vrbo, or a similar platform.
3. The state layer is the one that's settled. The Rhode Island Department of Business Regulation says every short-term rental advertised on a hosting platform in Rhode Island must carry a registration. As of January 1, 2026, the Rhode Island Division of Taxation says a 5 percent tax applies to whole-home short-term rentals and the local hotel tax rose from 1 percent to 2 percent. Build both into your rental pro forma now. Unlike the town's ordinance, these aren't in limbo.
4. Check the town council's agenda before you waive contingencies. Because Narragansett is actively working toward a zoning-based rewrite, the terms that eventually take effect could differ from the 2024 version, arrive with less notice than a typical zoning change, and change the economics of a property you're mid-contract on. A quick call to the town clerk or your attorney during your due diligence period costs nothing and closes a real gap.

None of this means short-term renting in Narragansett is risky or discouraged. It means the rules that make headlines and the rules that govern your closing table aren't currently the same document, and conflating them is the kind of mistake that shows up in a pro forma months after you've already signed.

Frequently Asked Questions

Is short-term renting currently banned in Narragansett? No. The 2024 ordinance that would have imposed a seven-night minimum and declining permit cap is under injunction, and the 900-permit cap has never taken effect. Owners can operate short-term rentals as long as they meet the general registration requirement and applicable state rules.

Do I still need to register if my rental doesn't feel like an "Airbnb"? If a property is advertised on any third-party hosting platform for 30 nights or less, Rhode Island law requires a state DBR registration regardless of how you think of the listing. Narragansett's general rental registration applies separately to any rental property in town.

If I buy a property that already has strong short-term rental income, can I keep operating under the seller's state DBR registration? No. The state registration doesn't transfer to a new registrant. You'll need to file your own before you list the property.

Will the 900-permit cap eventually apply? It might, if the town succeeds in rewriting the ordinance as a zoning amendment along the lines the Exeter case validated. As of this writing there's no adopted timeline for when that would happen, so treat the current cap as aspirational rather than binding.

Rules that exist on paper but not in practice are exactly the kind of detail that gets lost between a listing photo and a closing table. If you're weighing a rental purchase in Narragansett and want a clear read on what's enforceable today versus what's still working its way through town hall, Fran Bidell has spent more than two decades untangling exactly this kind of local detail for coastal Rhode Island buyers. Let's Connect.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.