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ZONING MATTERS: AIRBNB AND THE SHORT-TERM RENTAL PROBLEM

Recently, one of the most common zoning disputes between homeowners and local governments involves the use of residential properties for short-term rentals to overnight guests.  These short-term rentals are often advertised and booked through websites such as Airbnb, VRBO or HomeAway. Disputes between township officials and homeowners have resulted in numerous recent court cases as local municipalities attempt to keep short-term rental activities out of residential neighborhoods.

THE ZONING ORDINANCE
The zoning ordinance governing use of a particular property is the critical document in determining whether or not homeowners are permitted to rent out their home on a short-term basis. Renting out rooms is similar to other commercial activities, such as a boutique hotel or a bed and breakfast, which are often prohibited or restricted in residential zones. Each municipality’s zoning ordinance is different, and attempts to define what is and is not permitted at a particular location.

AMBIGUITY
No zoning ordinance is perfect. While most ordinances contain definitions of common uses that are well known and understood, such as “Bed and Breakfast” or “Hotel,” it is not possible to define every possible use of property. Short-term rentals are a relatively recent phenomenon that did not exist when most zoning ordinances were adopted. When a new use of a property is established that does not neatly comport within an existing definition, ambiguity is created. When ambiguity exists, conflicts often arise.

Courts in Pennsylvania generally defer to the zoning hearing board’s interpretations of its ordinance, but if the ordinance in question is sufficiently ambiguous, courts have consistently ruled that ambiguity and conflict in the language of the ordinance must be resolved in favor of the homeowner and the least restrictive use of the property. If a homeowner can show that the ordinance does not clearly prohibit short-term rentals in the zone in which the property is located, the municipality may not be able to prohibit that use.

A PERFECT EXAMPLE
A recent case perfectly exemplifies how a short-term rental can conflict with a zoning ordinance.

In Reihner v. City of Scranton Zoning Hearing Board, homeowners listed bedrooms on the second and third floors of their single-family home for short-term rental on Airbnb. Guests were limited to four-night stays and had access to the kitchen throughout the day. The homeowners did not serve breakfast or any other meals to their guests. After neighbors complained about observing strangers and parking issues, a city zoning officer issued a violation notice to the homeowners for operating a “bed and breakfast,” which was not a permitted use in their residential zoning district.

The city zoning ordinance defined a “bed and breakfast use” as one which:  i) includes the rental of overnight sleeping accommodations and bathroom access for a maximum of ten temporary guests at one time, and ii) does not provide any cooking facilities or provision of meals for guests other than breakfast. The homeowners appealed the violation notice to the city’s zoning hearing board, arguing that both the ordinance and common usage dictate that a property must feature breakfast service to qualify as a bed and breakfast.

The board denied the homeowners’ appeal. It concluded that the definition of “bed and breakfast use” does not actually require any breakfast to be served, but rather prohibits the provision of any meal other than breakfast. The homeowners continued to push the matter, and the Court of Common Pleas affirmed the local zoning board’s determination. The tenacious homeowners then sought relief in the Commonwealth Court (the court that hears appeals from local government actions).

The Commonwealth Court sided with the homeowners, finding that the municipality was attempting to ignore the inclusion of the word “breakfast” in the definition, and ruled that ambiguity in the zoning ordinance must be construed in favor of the homeowner and the least restrictive use of the subject property. The homeowners were permitted to continue renting their house out to Airbnb customers.

WHAT’S NEXT?
In addressing short-term rental disputes, courts have often noted that municipalities have the power to fix the problem by amending their zoning ordinances to clearly define short-term rental uses and expressly prohibit them in residential zones. Many municipalities have taken action to clarify their zoning ordinances, and more will follow. When a municipality clarifies short-term rental restrictions in its zoning ordinance, courts will uphold the municipality’s authority to prohibit and restrict short-term rental uses in particular zoning districts.

The position of courts on the matter of short-term rentals may soon change. The critical case of Slice of Life, LLC v. Hamilton Township is being considered by the Supreme Court of Pennsylvania, and centers on the question of whether or not short-term rentals are “commercial businesses” permitted in residential zoning districts. This pending decision of the Supreme Court could reshape how short-term rentals are classified under zoning ordinances.

The Real Estate Section at Blakinger Thomas, PC will be watching developments in zoning law closely. Zoning law is a changing landscape and zoning ordinances are lengthy documents, and an understanding of how both work together is often needed in order to make a meaningful determination about what uses are permitted in a particular zoning district. An attorney with experience representing clients in zoning matters is best suited to reviewing a zoning ordinance to determine if a short-term rental is a permitted use for a particular property.

This article is written by Seth W. Hiller, an associate attorney at Blakinger Thomas practicing in the areas of Real Estate, Land Use and Business law.  If you have any questions about this topic or other land use related issues, please contact Seth at swh@blakingerthomas.com or 717-509-7268.

**This update is provided for informational purposes only and
should not be construed as legal advice or as creating an
attorney-client relationship where one does not already exist.**