ITHACA, N.Y.—The Town of Ithaca’s new short-term rental (STR) legislation goes into effect April 1 and will limit the number of unhosted nights permitted to owners who rent their homes to others, often through Airbnb or another similar service.
At its 2021 year-end meeting, the Town of Ithaca board passed the new regulations unanimously, despite the plentiful public comments opposing them. Previously to this legislation rental nights were not capped. The new limitations allow unhosted properties just 29 nights per year and unhosted lakefront properties 245 nights per year.
Property owners are limited to two operating permits and must apply for them by July 1. Permits will be issued upon completion of inspections that meet all the requirements laid out in the Town of Ithaca’s Local Law No. 16 in Chapter 270, Zoning, of the Town of Ithaca Code.
The legislation’s intent is to minimize issues like noise, trash and traffic in neighborhoods to protect the permanent residents and their properties, protect affordability for long-term renters and owners as well as the “welfare of the community and of persons occupying short-term rentals,” the actual effect of the new limitations isn’t so positive, according to current Airbnb and VRBO owners.
Nick Helmholdt, tourism planning director for Tompkins County, said he doesn’t think the restrictions will impact tourism and that he believes the changes are “really excellent” ways to improve the health and safety of permanent residents and their neighborhoods as well as anyone staying in short-term rentals.
Property owners within the Town of Ithaca have been operating their STRs for years, and some rely on the income from properties they list year-round. Others, like snowbirds, only rent their houses out for the winter, which even then far exceeds the 29 days now permitted.
Chelsea Benson owns a property on South Hill that she has been operating as an Airbnb since 2019, primarily catering to prospective students and their families visiting Ithaca College and Cornell University during the off-season and to families of tourists during the summer.
Though her rental doesn’t face the restriction of rentable nights, since it’s attached to her primary residence, Benson is moving away from STRs to long-term rentals, in part because of the new legislation.
“In 2019, we booked 115 nights out, and 2020 was weird because of the pandemic but we booked 112,” she said. “In 2021, we had 121 booked and an occupancy rate of 86%. In the slower seasons, we were basically only renting out the weekends because it’s attached to our home.”
One of the benefits of operating an STR is the flexible schedule, though Benson noted that it is still a lot of work in terms of cleaning and being reachable should a problem arise.
Though Benson wouldn’t be affected by legislation’s reduction of rentable nights, she would have to limit her listing to two guests instead of the previous four due to the air mattress families utilized in the living room. “A lot of families took advantage of that because the bedroom separated the living room and it was a really inexpensive way for families to lodge,” she said.
The reduction in nights is only part of the reason Benson is moving into long-term renting.
“We wanted to make some changes to the suite and had to go through code enforcement to get the permit to make those changes, and short-term renting is a lot of work, especially being available all the time for your guests. It’s also kind of tiring to be reviewed constantly,” she said with a laugh.
Benson said she is concerned for snowbirds and anyone who doesn’t live adjacent to their rental property. “It really is going to hurt tourism a lot, and we’re not making a huge amount of money off it, but I don’t know what other people will do if their rental isn’t set up for long-term.”
Bill Goodman, Ithaca’s deputy town supervisor, said that it would take evidence of harm being done to a large number of residents for amendments to be considered in the future. “Normally, we let a law go into effect and see what consequences it has that might be unintended. If there’s any unintended consequences, then we might consider making an amendment.”
Craig Dunham and Megan Shay, who have been renting their home out on Airbnb for about five years now while they go south for the winter, are now permitted zero days under the new STR legislation as they spend one more day in Florida than they do in Ithaca.
While Dunham, who was a vocal critic of the law when it was being discussed, says he doesn’t believe the intent of the new restrictions are malicious, he is disappointed in the Town of Ithaca board’s decision to pass the legislation without taking snowbirds into consideration — “By the time we got involved, the board was fed up and wanted to get on with it.”
Dunham said that he and Shay are evaluating legal options with the help of an attorney who specializes in zoning, though he’s not sure what the outcome will be. “We pretty much are feeling like we won’t be able to do short-term rentals and what that means to us is that we’ll try to do long-term rentals when we have a chunk of time, but there’s no good way to find long-term rentals.” He also expects their house to sit empty for large chunks of time, which he thinks is counterproductive to what the goal was with the new restrictions.
Units offered as STRs as of April 1 are required to apply for permits before July 1. Stays already on the books are grandfathered in and are allowed to occur as booked through the end of September.
Goodman said he and the board don’t think these changes will affect the general housing stock. “I believe we addressed the housing situation in Ithaca is to build more units, not to worry about what happens to a couple of people who have the resources to let a place sit vacant for a number of months.”
Tom Knipe, deputy director of economic development for the City of Ithaca, presented statistics regarding STRs at the Planning and Economic Development Committee Meeting (PEDC) on March 16, as the city mulls its own set of potential regulations.
“In thinking about crafting policy objectives for regulation it’s important to understand the benefits as well as some potential negative implications,” he said in the meeting, listing the benefits as increased overall tourism, increased income for residents, increased room tax and increased lodging supply without building additional hotels.
Knipe’s possible negative concerns included impacts on housing supply and affordability as well as the formal lodging industry (hotels), impact on the health and wellbeing of local neighborhoods and their residents.
“I think it’s important we’re clear on different types of listings, there is no one definition for a short-term rental as a property. Is it a whole unit? Or a private room? Is it in full-time use or part-time use? Probably most of the properties in the City of Ithaca that are rented out as short-term rentals are an occasional use, meaning they’re probably occupied most of the time by a long-term tenant who vacates their home for Cornell graduation, for example,” he said.
Knipe also discussed New York State’s proposed STR legislation that’s been on the books for “several years now” and would require hosts to have insurance, enact penalties for violations between $1,000 and $25,000, would require hosting platforms like VRBO and Airbnb to collect state sales tax and local occupancy tax and exempt hosts who rent for fewer than 14 days a year from all taxes, among others.
Knipe also said that he thinks the proposed policy objectives take a “balanced approach” that allow the community to accrue some of the benefits while mitigating some of the negative impacts. (The full PEDC meeting can be found here.)
The city’s drafted timeline would start the process to determining regulations this coming April and May, have design options ready for the Common Council by July, adopt legislation by the end of 2022 and enact policies beginning August 2023.