The blessings and blights of short-term rentals

Posted 10/4/22

SULLIVAN COUNTY, NY — “I think that one thing we should be considering is taking a look at the short-term rental market,” said Sullivan County Health and Human Services Commissioner …

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The blessings and blights of short-term rentals


SULLIVAN COUNTY, NY — “I think that one thing we should be considering is taking a look at the short-term rental market,” said Sullivan County Health and Human Services Commissioner John Liddle.

Liddle was speaking at a September 8 meeting of the legislature’s health and human services committee, walking legislators through the results of a recent study on Sullivan County’s housing market.

Short term rentals (STR) are properties traditionally used as homes or apartments, now rented out like hotel rooms to vacationers. Online booking sites like VRBO and Airbnb have made millions building an industry around people renting out their spare rooms—and, increasingly, their entire houses.

The information Liddle presented came from the Sullivan County Comprehensive Housing Strategy, which is overseen by the county’s planning and community development department. The study groups STRs together with second-home ownership as a significant strain on the county’s housing market.

Out of 50,966 housing units that the county had in 2020, only 56 percent were occupied by resident households, according to the study, down from 62 percent in 2000. “With the emergence of AirBNB, VRBO and other STR platforms, the effect of vacation housing on the market… is unlikely to diminish,” it reads.

“[The] short-term market is destroying the housing market in this county,” said Sullivan County Legislature chair Rob Doherty during the September 8 meeting.

“I think there’s a lot of evidence to support that,” replied Liddle.

Where’s the bed tax going?

There’s evidence, too, for benefits from STRs.

The STRs in Sullivan County have filled government coffers. According to the Sullivan County treasurer’s office, 36 percent of the room-tax collected this year has come from vacation rentals.  

Sullivan County has actively gone after that money. The county changed its room-tax law on March 18, 2021, specifically targeting STRs. The change led to that 36 percent, and as inflows increased, the county collected a surplus in the room tax fund.

“We have $789,000 sitting in our account… doing nothing,” said Doherty, introducing the discussion at a September 22 meeting of the legislature’s executive committee.

The Sullivan County Visitors Association (SCVA) historically received the entire pot of takings from the room tax, minus a 15 percent fee for the county’s administrative costs. That changed on April 15, 2021, when the legislature voted to allow other groups a slice of the pie. Without that change, the SCVA would reap the benefits of increased room tax takings. Instead, the SCVA’s level of funding peaked at almost $1.6 million in 2020 and declined thereafter, to $1.34 million in 2021 and to $1.1 million in 2022.

Hence the surplus.

The legislature decided to form a committee to submit recommendations about what organizations and projects should get the money. Among the projects discussed were tourism infrastructure improvements and tourist-focused events.

Liddle briefly floated another idea for the surplus at the September 8 meeting.

The county could put some of the room tax money it raised from STRs to work helping the county’s housing market, he said. The money could go toward fixing the issues of blight that the housing study identified.

What can the county do?

The county couldn’t tackle the STR issue by itself, said Doherty. “The problem is that we’re a home-rule state, and each town would have to adopt the same law for us to move forward.”

Three towns in Sullivan County have passed STR ordinances to date: Callicoon, Delaware and Highland. (See the sidebar for a comparison.) At least three other towns are looking into the issue: Mamakating has held public hearings on a proposed STR law since 2020, and Bethel and Cochecton each indicated their intent to consider STRs during their respective comprehensive plan rewrites.

None of the regulations ban STRs outright. They weigh the positives and the negatives of STRs, balancing the promotion of tourism against the impact on community character.

As for the effect on housing, the Sullivan County Comprehensive Housing Strategy doesn’t recommend specific regulations against STRs—though it suggests boosting code enforcement capacity and updating land-use regulations throughout the county. Nor does it identify STRs as a primary cause of the county’s housing difficulties. It looks instead to improve the county’s current housing stock through rehabilitation and new construction, offering new buildings to replace those eaten up by blight and by the STR market.

“The main housing challenges that face Sullivan County… are not new,” notes the study, though events like the COVID-19 pandemic might have exacerbated those problems.  “Addressing these challenges and moving the market in a direction that makes it more likely to meet a range of housing needs will, similarly, take time.”

housing, short term rental, blight, room tax


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