RIVER VALLEY — Short-term rentals bring opportunity! Property owners can make extra money while bringing more visitors to town.

Short-term rentals are risky! They rob local residents of affordable housing and force them out of town.

Who’s right? It all depends on whom you talk to.

The Town of Highland kicked off the creation of its new comprehensive plan—a document that will set out the town’s vision and aspirations for the next ten years—with a community discussion on short-term rentals and the housing shortage.

“Maybe this is an assumption that we don’t want to live in a short-term rental village without a community, that everybody in the entire place is transient,” said the town supervisor, John Pizzolato. “But we also don’t want to step on property rights. So this is a really fine line. So [we want] as much as we can hear from you as possible.”

In New York, a home rule state, municipalities have more room to hold these conversations.

“In a home rule system of governance, local municipalities can govern their communities and pass laws freely, as long as the actions they take are not prohibited according to state law,” according to Hudson Valley Pattern for Progress,  which studies housing as it promotes sustainable solutions for the region.

Pennsylvania, on the other hand, is a Dillon’s Rule state, in which “local municipalities only have the freedom to enact laws that are expressly permitted by the state,” according to Pattern for Progress.

Pros and cons

One Highland resident, who said his name was Peter, said he knows of “at least four” short-term rentals that are not registered. He said the guests are loud and don’t respect the land and community.

“They don’t have anything at stake,” he said. “I’ve been here for 27 years. I have a lot at stake.”

If you own a restaurant, you want Airbnbs, he said. “Then you have people who come with disposable income and go to the restaurant,” he said. “Me? I can’t afford to go to a restaurant. Have you been to a restaurant these days?”

Not everyone feels as Peter does. “It doesn’t bother me,” said a resident who lives next to a short-term rental property. “I actually like it.” 

A small business owner said, “Tourism is essential for small businesses here. I make my money over the summer.”

Another resident pointed out that short-term rentals have allowed some property owners to improve their dilapidated houses and to afford their upkeep.

The constant churn of new clientele introduced by short-term rentals boosts spending in the local economy and gives rural places exposure, said another resident.

That’s exactly how one family landed in Highland. A woman said, “We bought a place to offset our mortgage via Airbnb for a while until COVID. And that’s how we landed here. Now I have a business. I’m a contributor, but without tourism, I couldn’t survive.”

These residents described one of the ways short-term rentals are being used. But some are part of much bigger businesses: A handful of rental management companies operate many of the short-term rentals in the area. 

A single company, Evolve, manages 17 percent of all short-term rental listings in Lackawaxen Township, PA.

Another management company, Red Cottage, operates at least one, and typically multiple, short-term rental properties in seven different towns in the area.

Supply and demand

Some places are experiencing strong growth in supply or demand, while other places are experiencing declines.

In New York, Monticello saw a 40 percent increase in the supply of short-term rentals, with demand growing by 14 percent. In Liberty, supply growth was a 71.6 percent increase year-over-year compared to demand, which surged by 129.1 percent.

Jeffersonville’s market shrank, showing declines in both supply and demand.

In Pennsylvania, Shohola Township showed strong growth, with supply up by 23.8 percent and demand up by 13.7 percent. Lackawaxen Township faced significant declines, with an 18.2 percent drop in demand and a 3.7 percent reduction in supply.

Tax revenue

Pike County, PA: Guests who book Airbnbs located in Pike County, PA, will pay 3 percent of the listing price as a rental room excise tax. This includes any cleaning fees for reservations of 30 nights or less.

Wayne County, PA: Guests who book Airbnbs located in Wayne County, PA, will pay 3 percent of the listing price as a rental room excise tax. This includes any cleaning fees for reservations of 30 nights or less.

Pennsylvania: Guests who book Airbnbs located in Pennsylvania will pay as a hotel occupancy tax of 6 percent of the listing price, including any cleaning and guest fees, for reservations of 29 nights or less. Local sales tax collected by Pennsylvania is 1 percent of the listing price, including any cleaning fee and guest fee for reservations of 29 nights and shorter. The state administers two local sales taxes in Allegheny County and Philadelphia County.

Sullivan County, NY: Guests who book Airbnbs located in Sullivan County will pay a hotel occupancy tax of 5 percent of the listing price, including any cleaning fees, for reservations of 89 nights or fewer.