Threading The Short Term Rental Needle

from 'The Boro & Towne News Vol II, No 4 APR 20-28 2021'

Our reporting shows that the number of short term rentals, or “STRs” have doubled over the last three years. There is no sign that it is letting up. When a landlord can rent a property to a family for a year at $1800 a month, or make that much in a week as a short term vacation rental, the reason is obvious.

STRs are a significant segment of the local tourism economy. They provide a benefit by expanding the range of vacation opportunities and expanding the market of travelers interested in the Poconos. Local home owners leverage the STR income to re-purpose older vacant properties, and to pay for maintenance, upgrades and deferred costs of local residential properties.

The vast majority of owners operate their rentals without a problem. But everywhere they appear, so do complaints about excessive noise, parking, litter, security issues, public safety, and trespass. The transitory nature of STR guests makes enforcement of nuisance laws against them difficult and ineffective in curbing the problem long-term. Our communities have been struggling to craft an effective response which balances benefits against the negative experiences. Some have hit, and some, like Mount Pocono, have missed.

Five years after passing a very restrictive ordinance, the borough has lost one legal challenge, and is in court with two more - one of which is the winner of the first case. They have succeeded in registering only STRs in the 3-square mile hamlet. Neither of which was voluntarily sought, but came about only after a notice of violation. And, disruptive party houses continuing to disturb the peace in the borough. Mount Pocono labors under a failed approach.

Coolbaugh Township labors also - to keep up with the success of its STR ordinance. This week the township reports receiving voluntary permit applications from around 90% of the estimated 400 short term rentals in the town.

The reasons for the difference in effectiveness isn’t that hard to figure out. Coolbaugh did not try to regulate the short term rental market -- it leaves it to the property owner to figure out where to locate a successful rental. Instead, Coolbaugh regulates the harm from bad STRs. Securing a permit in Coolbaugh requires proof of the basics - adequate space, sewer, water, and parking for the number of guests proposed. Beyond that, the township places the onus of being a ‘good neighbor’ on the owner. Too much noise, nudity, trash, or traffic, and the owner is fined. Too many fines, and the owner is out of business. With $50-60 thousand or more in annual income on the line, STR owners have an incentive to make sure their guests keep it civil.

Mount Pocono tries to regulate the market. They restrict STRs to commercial zones and to one low-density residential zone; they also superimposed a half-acre minimum lot size to further winnow out homeowners. Instead of focus on correcting the problems caused by irresponsible STR owners, the borough punishes the vast majority of good owners by drastically limiting where the rentals can exist. Cynics might say the council members simply eliminated their own neighborhoods from eligibility.

The better approach is to regulate the conduct which disrupts the residential character of a neighborhood. A vacation rental by itself does not, by definition, change the residential character of a street. It is when the occupants lack respect for their neighbors, when they impeded traffic of public works by parking on the street, when they have noisy all-night parties, when they let their trash blow into neighboring yards or the street -- that’s when they are impacting the neighborhood. That’s the conduct which needs regulating.

The owner needs to be a target - not only the 8 or 10 college kids that will go back to New Jersey on Monday. By holding the owner responsible, the town acts within its legitimate police power and actually starts to solve problems.

Who the owner is also makes a difference. A permanent or long-term resident offering a room or two in their own home to businesses people or vacationers should not be swept into the definition of STR. The Poconos has a long history of so-called ‘boarding’ or ‘lodging’ homes in which the owner or manager is a permanent resident, living on the premises when the guests are there. Owner-occupied properties are never a problem.

When towns like Coolbaugh take the smart approach, they improve their neighborhoods, and help bring in those big visitor dollars for their local restaurants, convenience stores, gas stations, retail shops, and all the parts of the Poconos economy reliant, directly or indirectly, on those travelers. But when they turn their backs on local history by trying to strangle the private vacation market, they do nothing to improve their neighborhoods, or help local businesses survive.

Instead of solving problems, a town creates them with overly-restrictive limitations bearing no rational relationship to the harms created by the tiny minority of irresponsible owners. This is why, after five years, Mount Pocono does not have a single short-term rental operating under a voluntarily-obtained permit; and, in only six months, Coolbaugh has hundreds of permit applications.

Time will tell from which experience Tobyhanna will take its lessons.