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Thursday, 11 February 2016 12:34

Illegal Housing – Next Door

City Starts to Move Against Airbnb Outbreak

SARATOGA SPRINGS – No neighborhood is immune. 

 

On any given day, hundreds of properties in the City of Saratoga Springs are listed on sites such as VRBO.com (which stands for Vacation Rental By Owner). VRBO had 198 Saratoga Springs area listings as of Monday, and the popular Airbnb.com site had over 300. These properties are being offered to people - individual rooms or up to an entire household - for short stays (one night or more). 

 

In a desirable tourist location such as Saratoga Springs, the popularity of having your family take over an entire house for a wedding, graduation, music festival, etc. is apparent. The only problem is that, according to the City Code – it is also illegal. 

 

As such, Saratoga Springs is but one example of a growing statewide, nationwide, and even international new market phenomenon rising out of the internet age: through these sites, property owners are finding it easy to list, and potential visitors have a larger universe of choices. Buyer meets seller, and everyone’s happy. So what’s the problem?

 

The problem is that housing used for this type of rental units is being offered in many city neighborhoods where only single or perhaps two-family homes (zoned urban residential or UR-1, 2, or 3) are permitted. Further, the length of guest stays, being frequently short-term – a few days or more – goes against the City Code, which specifies that in these neighborhoods a length of stay that is less than 30 days is considered “transient,” and can only be offered by licensed rooming houses, bed and breakfasts, and hotel/motels. (Note: the city code is crafted so as to specifically exempt track rentals and stays that are longer than 30 days for people vacationing, college students or similar longer-term arrangements).  

 

In Saratoga Springs, the City Code in this case exists not for the purpose of imposing an extra level of bureaucracy. Rather, it attempts to address legitimate concerns, which might be classified into three main areas – security, safety and economic. 

 

The security component: one big reason people buy homes in one/two family neighborhoods is so they will know who their neighbors are. In this context, there is also a public safety component, in that resources must be dedicated to areas all over the city, instead of centralized in a lesser number of places where licensed multi-unit short-term rental properties exist. 

 

The overall market condition regarding the outbreak of short-term rentals was brought to our attention by a reader, who we will call Cece. She owns a house in a quiet neighborhood in the Southeastern end of the city. Cece filed a formal complaint with the City’s Building Department last summer, and enlisted the aid of City Council members to help. In her complaint, she spoke about her neighbor engaging in short-term rentals and the impact on her neighborhood’s quality of life: 

 

“Have you ever tried to sleep with spotlights shining in your bedroom window? Have you ever gone to bed with the windows wide open… only to be inundated with cigarette or cigar smoke blowing into your sleeping quarters? How about drinking parties in the backyard after concerts? This wouldn’t happen if you knew your neighbors. But when the house next door is rented on VRBO at a two-night minimum, you never know who is going to be your neighbor. I live in a UR 2 residential zone, so this shouldn’t happen, right? Wrong. People/tourists do not always behave in the same manner as permanent residents.”

 

In this case, Cece received a response from Commissioner of Public Safety Chris Mathiesen, who was sympathetic. In an email, he wrote, “Private units in residential neighborhoods should not be able to be operated as de facto hotel rooms.  If the ordinance as presently written does not address this problem, we need to revise it so that these instances do not occur.  You are not the first person to complain about such imposition.”

 

Later, the City’s Building Department issued a ‘cease and desist’ letter to Cece’s neighbor. She is concerned that when next summer comes around she will have to cope with this again, though, as it is not clear what will be done to enforce the order should the neighbor violate it again. 

 

In truth, there are enforcement provisions that exist in the city code that are quite severe, calling for fines of up to $1,000/day in some cases. Yet, as Saratoga Springs officials struggle with several hundred potential violating properties, they said they were mindful that historically, judges have been reluctant to impose fines on property owners. Further complicating the problem is that the City’s Code Enforcement Department has just two people – with their other responsibilities, they have only been able to respond to complaints such as Cece’s, and are mindful about facing an accusation of selectively enforcing a code provision.  

 

This situation has recently changed. A committee comprised of Head Building Inspector Steve Shaw, Code Enforcers Dan Cogan and John Donnelly, City Attorneys Vincent J. DeLeonardis and Tony Izzo, and Deputy Mayor Joseph Ogden, has been meeting for months in an attempt to formulate a strategy about this issue. As a result last week, Cogan indicated the City has sent out a letter to about a dozen property owners (a sample has been obtained by Saratoga TODAY – see graphic) as a first step with an eye toward reaching out to all those who are in violation. Included with the letter that states the property owner is in violation, is a licensing package from the Accounts Department for them to become “legal” – conforming to the guidelines for a special use permit that would allow the owner to operate a short-term rental dwelling. 

 

There would be costs involved in doing this. The permits themselves are not expensive (Code Enforcer Dan Cogan said that it is $25/year for up to five rooms, $50 for up to 10), but in order to qualify for a permit there may be more substantial costs involved in bringing a given building up to the requirements that would be needed to pass a fire inspection for units of this type, as well as carrying extra insurance, and other items. “For us, the primary concern is the safety of the travelling public,” Cogan said. “We have other concerns – such as the impact on the quality of life in the neighborhood and making sure sales and room (bed) taxes are collected. But safety is by far the main priority. We hope the property owner’s contact us to work it out. ” 

 

The issue of lost sales and room taxes are a substantial issue nonetheless. The New York State Hospitality and Tourism Association’s President Jan Chesterton noted that nationwide, the hotel and lodging industry provides nearly 2 million jobs nationwide and supports $141.5 billion in annual business travel tax revenue for state and local governments. Chesterton has been representing the lodging and hospitality industry in a battle to get some State legislation to supplement and strengthen local governments’ efforts to grapple with this situation. “We want to level the playing field,” Chesterton said. A committee, of which Todd Garofano, president of the Saratoga Convention and Tourism Bureau is a member, has been educating members of the Legislature and has formulated several key points that they advocate should be part of a legal solution to the short-term online rental universe that they say are compromising consumer safety, endangering the character and security of residential neighborhoods, and avoiding their tax and regulatory obligations. 

 

These provisions include:

• hosts register and obtain a business license;

• short-term online companies are not facilitating illegal activity;

• all taxes are paid;

• basic health, safety and cleanliness standards are met;

• communities and residents of multi-unit buildings are not subject to a revolving door of strangers; 

• zoning laws and condominium, co-op, and apartment building rules are followed;

• illegal hotels do not continue to operate; and

• appropriate levels of insurance are in place to protect homeowners, guests and communities. 

 

Chesterton made it clear that safety was also her association’s top priority. “The biggest thing is assuring standardized inspections for all lodging facilities,” she said. “However, there is no doubt that the Capital Region is losing thousands of room/nights per year to these short-term rentals, with all the lost revenue associated with it.” Chesterton expressed confidence that “we will get something done in this legislative session,” which ends in June.

 

So, the battle lines have become more clearly drawn. This remains a story in process, which should prove to be interesting to see how it plays out locally. 

 

 

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