Thursday, September 2, 2021

Discussion time: Short-term rentals

housing

This past year, we’ve been reporting on the problems around affordable housing in the Adirondack region. At times, people have referred to it as a “crisis.”

Here are some recent examples:

In the Almanack, Alexis Subra wrote about her experience trying to find an apartment near her Saranac Lake job, only to end up in Schroon Lake. 

In the Explorer, Jamie Organski reports from Old Forge about the friction between landlords and locals around the proliferation of short-term rentals, as the town looks for ways to regulate rentals that cater to short stays.

And in May, we had this story in the Explorer that looked at the lack of affordable housing in Saranac Lake and Lake Placid. As part of that article, reporter Mike De Socio spoke with three women who shared their stories and experiences.

For this discussion, I’d like to focus in on short-term rentals and whether communities should play an active role in trying to reign them in, or let the market play itself out.

The question: “Should communities take steps to regulate short-term rentals?” 

Above photos from around Old Forge show plenty of “for rent” signs but the vast majority are advertising short-term, vacation rentals. Photos by Jamie Organski

Related Stories


Melissa is a journalist with experience as a reporter and editor with the Burlington Free Press, Ithaca Journal and Fairbanks Daily News-Miner. She worked as a communications specialist for the Adirondack North Country Association and runs her own New York State Women owned Business-Enterprise Bootstrap Communications, which includes digital marketing, strategy and design. She enjoys hiking, camping and other outdoors activities, and spending time with her husband, their twin daughters, and rescue animals -- two dogs and a cat.




15 Responses

  1. Boreas says:

    To me, it makes more sense for tourism-based communities to focus on building/providing more affordable, concentrated housing within the village limits rather than dictating what property owners should do with their property. Perhaps adjusting local taxes based on rental types and businesses catering to tourism would help re-adjust housing priorities. If localities want to attract tourism, they need to attract workers as well – and those workers need a place to live.

  2. Paul says:

    Seems to me you can’t just lump everything together. Lots of places in the Adirondacks are seasonal homes so they are not even options for year-round use. Why shackle these homeowners, in many cases just trying to keep up with the ridiculously high property taxes they are paying (in many cases for services they don’t even use – schools etc.) with regulations that really only should apply to genuine year-round rental options?

    As for the person working in SL and renting an apartment 114 miles away in Schroon Lake – did they try some of the closer more affordable options like Tupper Lake or even smaller towns like St. Regis Falls? It sounds like they took a place in Schroon because of some other connection to the town as opposed to just the affordability. This is an expensive commute.

  3. Zephyr says:

    There needs to be some thought put into how short-term rentals are regulated. I understand that in some cases these are important sources of income for local people, but today we see more and more they are investment properties first and foremost. That really changes the character of a neighborhood and community. I am seeing this firsthand in a place where every other home is being bought up and turned into short-term rentals that go for astronomical rates but then sit empty most of the off-season. Local workers are completely priced out of the rental market and if you strike up a conversation with anyone in the service industry you find they are commuting from 30-60 miles away. Even professionals have a hard time finding year-round rentals because many landlords kick them out each summer for the very lucrative summer season.

  4. Long Lake says:

    Let’s not cloud the real issue here! Short-term rentals are motels with missing in action owners that do not care what their customers are doing as long as they get payed. Personally our little community has lost that neighbor respecting neighbor decorum. You live on the edge come tourist season. What fresh new hell will be coming your way this year! Personal Examples; nosey drones invading your privacy or a rotating cast of renters that have NO vested interest in your community so they disrespect your neighborhood with their garbage thrown along the roads leading to and from said rental units. Yes, local elected officials need to hold owners of short term rental properties responsible for their seasonal rentals. Even if it has to be extra fees to cover road usage, garbage, police/ambulance, and any other expenses that stretch local resources to their limits.

    • Zephyr says:

      The previous owner of a rental property across the street from my house seemed to specialize in renting to criminals. Multiple tenants were arrested for crimes ranging from robbery, to drugs, to child molestation. The new owners have fixed the place up but continue to rent out to short-termers all summer long so that we never know who is there.

  5. JB says:

    The short-term rental, the villa, the chalet, the bed and breakfast, and now the AirBnB, have been replacing the inn, the motel, and the hotel with increasing speed as society becomes more physically and virtually connected, enabling the middle class of developed and democratic nations to live the fantasy of the noble lifestyle for a small fee. Yet, only now, as technology has finally propelled non-traditional transient lodging towards critical mass, has even the most rudimentary discussion emerged about regulating this industry that continues to operate in the shadows. Those discussions have been heated and regulations have been slow to come, with powerful and influential groups clashing heads and a patchwork of legal systems struggling to define and control a disruptive industry that operates in intermediate gray areas.

    For one, the rights of the private property owner in the United States are arguably stronger than the rights of the business owner, and there is no consensus as to the classification of the short-term lessor. This creates a myriad of regulatory problems for governments, from zoning to fire and safety codes to tax collection. Consider the “right to rent” affirmed by the courts (Thompson on Real Property) and the difficulties thereby created in passing restrictive short-term rental regulations; the many state appellate decisions that limit zoning regulations which specifically target short-term rentals (FGL & L Property Corp. v. City of Rye [N.Y.], Gangemi v. Zoning Board of Appeals of Town of Fairfield [Conn.], etc.); and the Fourth Amendment and its federal implications for localities seeking to conduct inspections of short-term rental properties (Camara v. Municipal Court, See v. City of Seattle, etc.). Now, with the proliferation of short-term rentals spurred by internet-based companies, enforcement is made even more difficult by federal laws protecting such internet companies from being forced to disclose information to localities (see Stored Communication Act and the federal injunction against New York City’s law seeking information from internet-based lodging companies to assist in its crackdown against illegal leases [https://www.nytimes.com/2019/01/03/nyregion/nyc-airbnb-rentals.html]; and the Communications Decency Act and AirBnB’s lawsuit against New York State’s law enabling the imposition of fines against the authors of listings for noncompliant rentals [https://www.nytimes.com/2016/10/22/technology/new-york-passes-law-airbnb.html]). Thus, not only is the deck stacked against localities and even states hoping to reign in short-term rentals, by virtue of legal tradition and the lack of a consistently definable target upon which to focus enforcement efforts, but the entry of multi-billion-dollar corporations into the equation, and their ensuing aggressive legal campaigns against any regulation, has created a vicious cycle leading to the rapid escalation of the problems associated with transient lodging.

    For the past decade, the front line in the fight between the proponents of short-term rentals and longer term residents has been in larger cities throughout the world. In those places, the exploding cost of rent and housing, argue city councils, city planners and academics, has been exacerbated acutely by the proliferation of short-term rentals, in particular those associated with internet-based companies. In addition to being difficulting to regulate on all fronts–zoning, taxation, safety–these types of rentals have been consistently demonstrated to increase housing costs by removing long-term housing stock from the market–one estimate posites that for every 0.5% reduction in rent supply, rent increases by 1% (https://therealdeal.com/2015/10/14/how-much-does-airbnb-impact-nyc-rents/).

    The incentive for owners to rent on a short-term basis is obvious: transiently occupied units command a higher per-night price than long-term units. Often, the industry tries to paint the picture that the benefits from increasing short-term accomodations outweigh the harms in two ways: the “little guy” homeowner can earn much needed income, and the community as a whole reaps increased tourist revenue. However, there are strong indications that both of these conclusions are flawed. For one, It has been demonstrated that in many “AirBnB hotspots”, typically about one-third of all listings are controlled by a disproportionately small minority of commercial, multiple property owners (https://www.mcgill.ca/newsroom/files/newsroom/channels/attach/airbnb-report.pdf, https://web.archive.org/web/20210206130321/https://ag.ny.gov/pdfs/Airbnb%20report.pdf). Often, these properties are essential run as “illegal hotels”. In a 2014 report, the New York State Attorney General investigated such units, terming them as “commercial units” if they were rented on a short-term basis for at least 182 days per year; one analysis found that between 8 to 17 percent of all listings in New York City met that definition for “commercial” units during the study period (https://therealdeal.com/2015/10/14/how-much-does-airbnb-impact-nyc-rents/). Secondly, even setting aside the demonstrable negative effects upon local residents brought by short-term rentals, from rising rent (https://www.dropbox.com/s/u4s1fcync2gseyl/AirBnB_Report%20FINAL.docx?dl=0), to gentrification, to noise and quality of life issues, to violent crime (https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0253315), the argument for the economic benefit derived from the increased tourism opportunity brought by short-term rentals to both local communities and visitors alike are arguably overstated: only 4 percent or less of surveyed respondents in multiple studies have indicated that the lack of short-term rentals in a given location would cause them to abandon travel plans; economic benefit calculations of this type of accommodation do not take into account the displacement of traditional lodging revenue; and short-term rentals are sufficiently difficult to tax that localities may forgo considerable revenue as short-term rentals proliferate (https://www.epi.org/publication/the-economic-costs-and-benefits-of-airbnb-no-reason-for-local-policymakers-to-let-airbnb-bypass-tax-or-regulatory-obligations/).

    But the problems associated short-term rentals will not remain largely confined to major cities for long, if that is even still the case. As many cities throughout the world crack down on short-term rentals, putting their considerable resources towards regulating a slippery industry and fighting major corporations and lobbying groups, investors large and small, joined by AirBnB-type companies, have begun focusing their efforts towards exurban and rural areas. Particularly concerning is that AirBnB’s largest domestic marketplace is New York City–just a stone’s throw away from the Adirondacks. Combine that fact with the increasing scrutiny imposed by New York City regulators upon short-term lessors and the mass exodus from cities hard hit by COVID-19 (https://www.cnbc.com/2020/08/06/rural-airbnb-bookings-are-surging-as-vacationers-look-to-escape-the-coronavirus.html), and it is not surprising that Adirondack hamlets are now being inundated with short-term rentals.

    Problematically, the housing supply in Adirondack hamlets are limited by virtue of their location–surrounded by restrictively-zoned Rural Use areas and Forest Preserve–yet these towns are historically reliant on the revenue generated by traditional hotels and lodges that need housing for a vulnerable workforce. As Park hamlets fill in with short-term rentals, towns and counties simply do not have the funding to effectively prevent negative impacts the local residents, infrastructure, and the surrounding environment. Essex County’s recent redistribution of occupancy tax revenue from ROOST towards towns is symbolically a step in the right direction, but it will do little to address the problems discussed here, especially given that such revenues are likely to be used to fund more tourism marketing. Even if local towns put those funds towards conducting impact studies, crafting restrictive short-term rental regulations and enforcing them, or incentivizing workforce housing, these towns would not have sufficient financial resources to face head-on these issues that even the largest cities in America continue to grapple with.

    And yet, even more importantly, towns and counties do not have the resources and sway to withstand the inevitable legal challenges that would follow any short-term rental regulations. Barring federal intervention, which seems unlikely, the State needs to shift its legislative efforts concerning this issue towards Upstate rather than simply protecting New York City. Illustrative of the focus on the City would be the current State Law to address the problem: the Multiple Dwelling Law, which prohibits short-term rentals for less than 30 days at a time in buildings with more than three units without the concurrent presence of the owner (https://www1.nyc.gov/assets/buildings/pdf/MultipleDwellingLaw.pdf). While it is very progressive for any state to have such restrictive regulations, or any statewide short-term rental regulations at all, this law does not address the short-term renting of single-family homes, which are so common in the Adirondack region. Interestingly, I believe that this law grants to localities the authority to pass local transient rental ordinances that are more restrictive than the Multiple Dwelling Law, in contrast to states like Arizona that have banned any such local ordinances, or others that do not explicitly mention local authority in any meaningful way. Thus, although smaller entities lack the resources to fight the ensuing enforcement and legal challenges that local regulations would bring, that is not to say that we cannot address the problem on dual fronts: in addition to a more targeted statewide unified legal landscape, with guidance and support from the State, local towns may actually be capable of enacting and enforcing their own regulations. In fact, one approach that may be particularly well-suited for restrictively-zoned Adirondack towns is that taken by the similarly space-limited consolidated city and county of Honolulu, Hawaii (being located on a small island), which sets an explicit hard-limit on the total number of short-term rentals allowed within its borders (http://www4.honolulu.gov/docushare/dsweb/Get/Document-238205/BILL089(18)%2c%20CD2%20190607.pdf). Nonetheless, in the face of change, perhaps the greatest challenge of all for Adirondack communities will be one of perception and attitude: upstate has long been the wastebasket of state-sponsored crony capitalism, as opposed to a bastion of the residential rights that are given such high priority downstate. That needs to change.

  6. Zephyr says:

    According to a TU article Hamilton County lost 10% of its housing units in the latest census, and it looks like other rural counties in the Adirondacks lost housing units too. Where have they gone? I imagine a short-term rental unit still counts as a “housing unit.” https://www.timesunion.com/news/article/These-New-York-counties-have-less-housing-now-16431741.php

    • JB says:

      Zephyr, I try to follow this type of thing pretty closely, so thanks for the article! I thought that it was interesting that the Schoharie County Board of Supervisors Chair had said that they had seen a doubling of the number of building permits since the Census reference date and a pretty surprising increase in registered voters. That mirrors what I have seen driving the major state highways running through the Park. The lights are on, lawns are mowed, and heavy machinery is present around dozens and dozens of houses that have been vacant for as long as I have known about them, and new houses are now sprouting up–but Spring of 2020 this was not the case. Only in the past 12 months or so, during the great “construction boom”, did that trend really start.

      As far as my previous comment, I will add that I do not think that all short-term rental owners are having a negative impact–I know of some that are very responsible. But there are some unscrupulous people whom I also know of who are trying to cash in on the trends, renting many properties to vacationers with little care for the community and little regulation to limit them. Opinionated as I am, I guess I was trying to hopefully agnostically highlight how complex the issue is and particularly how difficult of a knot to untangle is the Park housing situation. Statistics about housing vacancy in the notoriously unconventional and untimely 2020 Census should similarly be looked towards with a critical eye–it takes multiple decades of vacancy, not just one, for a house to fall into sufficient disrepair to receive the mark of condemnation of the “X” on the windows and doors.

      • Zephyr says:

        If I understand the term “housing unit” correctly it means a structure that is used for housing. Doesn’t have to be occupied or used, just available to be occupied or used. So where did 10% of the housing units in Hamilton County go?

        • JB says:

          The Times Union article seems to be talking about a statistic that matches what you describe–“housing unit” count as the total count of vacant or occupied separate living quarters:
          “Housing Unit. A housing unit is a house, an apartment, a group of rooms, or a single room occupied or intended for occupancy as separate living quarters. Separate living quarters are those in which the occupants do not live and eat with other persons in the structure and which have direct access from the outside of the building or through a common hall. For vacant units, the criteria of separateness and direct access are applied to the intended occupants whenever possible. If the information cannot be obtained, the criteria are applied to the previous occupants.Tents and boats are excluded if vacant, used for business, or used for extra sleeping space or vacations. Vacant seasonal/migratory mobile homes are included in the count of vacant seasonal/migratory housing units. Living quarters of the following types are excluded from the housing unit inventory: Dormitories, bunkhouses, and barracks; quarters in predominantly transient hotels, motels, and the like, except those occupied by persons who consider the hotel their usual place of residence; quarters in institutions, general hospitals, and military installations except those occupied by staff members or resident employees who have separate living arrangements.”

          Your question: Where did they go? The article you cited seems to assume that they predominantly fell into disrepair and were subsequently condemned or, more rarely, multi-unit buildings were consolidated into single-family dwellings. My point is that, barring natural disasters, housing takes many, many years to become permanently uninhabitable; it is only the foreclosure institutions, town inspectors and census data-crunchers that can officially count a house as condemned, effectively overnight. This is not to say that your article was not high-quality. There is even mention of a similar concern about data-collection methodology as mine, as there should be–in fact, we should be weary of any publication, academic or otherwise, that does not examine methodology when drawing conclusions from statistical datasets as large as the Decennial Census. Honestly, I’m surprised that some of these smaller nonprofit corporations, like the one mainly highlighted by the article, are able to so confidently make heads or tails of the new Census data this early on, since it is in a pretty obscure format as of right now.

  7. Vanessa Banti Vanessa B says:

    Flatly: yeah, something should be done about this. I agree with Boreas that taxing for the explicit purpose of building affordable (actually affordable) housing is an option. All summer in the Lake Placid area I’ve been hearing about tourism worker shortages. But I’ve also seen ads for jobs paying well below 15 per hour. And in my own search for year-round rentals, almost nothing has appeared outside of the Plattsburgh area.

    Certainly the vast majority of us tourists are not criminals – but as I’ve written elsewhere, we also functionally cannot really contribute to a community in a meaningful way and of course this is a bummer. So yeah, I think some sort of thoughtful regulation is necessary and will help everyone – even short term renters, who will not get tenets in places that are not attractive to visitors.

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *