The advent of short-term rentals of vacation homes through online platforms such as AirBnb, VRBO, Home Away, and Luxury Stay have posed new challenges to municipalities in their regulation of uses in residential neighborhoods. These online home-sharing websites provide travelers with the option of staying in facilities with all of the comforts of home for short periods of time but often at a much lower cost than in motel or hotel. Their popularity is most prevalent in locations that are popular tourist vacation destinations, such as the Pocono Mountains, the cities of Philadelphia and Pittsburgh, and other popular destinations.
Regulation of such short-term rental properties occurs primarily through local zoning regulations. Until recently, a number of courts have held that short term rentals are not prohibited in residential districts unless they are expressly excluded as permissible uses under the applicable zoning regulations. However, the Pennsylvania Supreme Court on April 26, 2019 issued its decision in the case of Slice of Life, LLC v. Hamilton Township Zoning Hearing Board, ___A 3d___, 2019 WL 1870562 (Pa. 2019) in which it held that a zoning ordinance which permitted single-family detached dwellings to be used by “families,” which was defined as requiring a “single housekeeping unit,” clearly and unambiguously excluded purely transient uses of property, including short-term rentals. The Supreme Court expressly overruled the prior holdings of the Commonwealth Court in Shvekh v. Zoning Hearing Board of Stroud Township, 154 A 3d 408, (Pa Commw. Ct. 2017) and Marchenko v. Zoning Hearing Board of Pocono Township, 147 A.3d 947, (Pa Commw. Ct. 2016) which upheld the right of property owners to engage in such short-term rentals. These expansions of the possible uses of a single family dwelling, had raised questions of whether a municipality’s current zoning ordinances are sufficient to limit the expansions created by the newer forms of transient lodging, or if municipalities need to revise their zoning ordinances in order to specifically address the expansions that sites such as these create. It is instructive to see what guidance the Pennsylvania courts have offered in determining how zoning ordinances have addressed these uses.
In Albert v. Zoning Hearing Board of North Abington Township, 854 A.2d 401 (Pa. 2004), the property owner filed a zoning application to operate a halfway house in an R-1 low density residential zoning district. The zoning officer denied the application claiming that the halfway house was not a permitted use under the local zoning ordinance. Id. at 402. The case was appealed to the Pennsylvania Supreme Court to determine the meaning of the term “family,” which was undefined in the zoning ordinance. Id. at 403-04. The Court concluded that since the term “family” was not defined and ambiguous that the generally understood meaning of the term “family” would be applicable. Id. at 407, fn. 5. Using the generally understood meaning of the term “family,” which the Court took to include that the composition of the group be sufficiently stable and permanent, the Court held that the halfway house did not fall within the definition of a single-family detached dwelling because of the transient nature of its residents who were expected to only stay, on average, two to six months. Id. at 409-11. Thus, based on the fact that the residents in the halfway house would leave within two to six months, and constantly change, the Court found that the halfway house could not constitute a single-family detached dwelling and as such could not be in a single family dwelling residential zone.
In Slice of Life, the property owner admittedly did not live at the property and used it solely as an income-producing short-term rental, along with other properties that he owned. The owner advertised the property online for short-term rentals—a minimum of two nights and a maximum of one week—through companies that specialize in internet-based rentals including Home Away and Luxury Stay. The property was advertised as a six bedroom house that sleeps seventeen people. While one person signs the lease, it was expected and understood that large groups would use the property without regard to the existence of a familiar relationship between the individuals.
The owner further admitted that he had received complaints from neighbors concerning noise, particularly fireworks late at night, by renters. Other neighbors complained of offensive activities threatening the health, safety and welfare of their homes and families, including public urination, fireworks, loud music, large bonfires in heavily wooded areas, nudity, and lewd conduct. The township zoning officer issued an enforcement notice, citing the owner for violating the zoning ordinance by operating the single-family unit as transient lodging. Id. at 635.
While the Commonwealth Court held that the owner’s use of the property was consistent with its existence as a single family dwelling, the Supreme Court disagreed. The Supreme Court emphasized the importance of the permanence and stability of people living in single-family residential zoning districts which creates “a sense of community, cultivates and fosters relationships, and provides an overall quality of a place where people are invested and engaged in their neighborhood and care about each other.” Id.
In Hoefling v. Zoning Hearing Board of Monroe Township, 2018 WL 5290348 (Pa. Commw. Ct. 2018), the property owners rented out their entire vacation home which was zoned as a suburban residential (R-1) zone to a group of people who signed a short-term lease to stay on average five to seven days. Id. at 1. The zoning officer sent out a notice stating that the use of the property as an overnight accommodation for guests was not consistent with the definition of a single-family dwelling in the ordinance which expressly prohibited lodging houses in the (R-1) zone. Id. at 2. The Commonwealth Court applied the rule that any ambiguity or conflict in the language of the ordinance must be resolved in favor of the landowner. Id. at 3 (citing Latimore Township v. Latimore Zoning Hearing Board, 58 A.3d 883, 888 (Pa. Commw. Ct. 2013); 53 P.S. §10603.1.). The Commonwealth Court held that the ordinance did not expressly prohibit the short-term rental of a single family home within the (R-1) Zone as the ordinance did not unambiguously forbid the use of a short-term rental of the entire property, and as such the restrictions in the zoning ordinance must be read narrowly with the ambiguities being resolved in favor of the landowner. Hoefling, at 7. Rejecting the conclusion of the Commonwealth Court, the Supreme Court adopted a more functional analysis.
Many municipalities have adopted conservative zoning regulations, like New York City and New Orleans, which make short-term rental properties illegal through stating that residential property located in the multiple residential dwelling unit must be used for permanent residential purposes and restricting such uses to a “single housekeeping unit.” Conversely, other municipalities have adopted more liberal regulations, such as Palm Desert, California, which allows short term rentals of up to 27 days provided that an annual permit is obtained, and a 9% transient occupancy tax is paid to the city. Other means to regulate short-term rentals include: permitting short-term rentals for 90 days per year, limiting the number of people who can use their homes as short-term rentals through requiring that people who rent out their home live there for at least a certain number of days, imposing occupancy limits, or limiting how many people on a block can have short-term rentals.
While the Supreme Court’s holding in Slice of Life provides some comfort to municipalities concerned with the regulation of the short-term rentals that Airbnb and similar websites facilitate in their residential districts, the discussion of the Court underscores the importance for municipalities to carefully review their zoning ordinances to determine that they appropriately regulate short-term rentals and restrict the use of single family dwellings to families, defined as “single housekeeping units.”