The Lancaster County Planning Commission drafted and released Short-Term Rental Regulation in early 2019 in their series of Community Planning Tools that were created to assist municipal officials with a variety of planning topics. With the increasing popularity of short-term rentals, municipalities are under pressure to regulate them. The Planning Commission offers a template for local municipalities to use when addressing ways to regulate short-term rentals. Click here for a link to the Short-Term Rental Regulation.
Popularly referred to as airbnbs or vrbos, internet-based short-term rentals (STRs) are an increasingly popular approach to owning a real estate portfolio which is a shift from what used to be limited to long-term rentals. Municipalities are tasked with managing this newer phenomenon. According to the Short-Term Rental Regulation, there are six key considerations that municipalities should evaluate when addressing zoning:
The residential character of the neighborhood and property maintenance. Owner-occupants within residential neighborhoods are concerned with the impact that short-term rentals will have on the character of the neighborhood. Neighbors are also concerned that without an owner present, the properties will not be well-maintained.
Revenue. Municipalities recognize that short-term rentals are an opportunity to generate tax revenue.
Fairer competition with licensed lodging. Lancaster County is a tourism hub with many existing bed and breakfasts and hotels/motels. These traditional lodging establishments collect a room tax and are subject to various state and local licenses and oversight.
Protection and safety. Regulation would ensure that short-term rentals meet proper health and safety standards.
Impact on affordable housing. There is the potential that the numerous short-term rentals remove too many units from the year-round rental housing supply.
The Short-Term Rental Regulation states, “A balanced approach to address concerns on both sides of the issue is the trend. Neither outright prohibition nor absence of regulation are typically used as a means of addressing this use by any of the benchmarked communities. The trend is generally a type of compromise with oversight by local government.”
Many municipalities within Lancaster County have passed zoning regulations pertaining to short-term rentals. For example, New Holland Borough has prohibited short-term rentals in most zoning districts — click here. Beware of this when working with clients specifically searching for properties intended to operate as a short-term rental. Contact the municipality to confirm what the limitations and guidelines are, and ask about proposed zoning changes.
Other considerations mentioned in the Short-Term Rental Regulation include the fact that municipalities are legally permitted to prohibit short-term occupancy in single-family areas. It is important to understand the tax requirements of short-term rentals and whether there could be Americans with Disabilities Act (ADA) requirements.
Lisa Naples, Berkshire Hathaway HomeServices HomeSale Realty
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