Your Stories

In the summer of 2011, our City Council quietly voted to prohibit residential property owners from renting their properties for less than 90 days at a time to address allegations of late night noise and parties. There was very little evidence of those “parties” and such a change was a de facto ban on vacation rentals. Of course, no one goes on a vacation for more than 90 days.

As I rent my high-end townhouse in Atlantic City I strongly opposed this ban and so did other vacation rental property owners in the area.

We formed a coalition, the Atlantic City Coalition of Landlords, hired an attorney and we were on our way. In our case most of the local property owners already knew each other but others we had to contact by email. We had meetings in person (where possible), held conference calls (sometimes with our attorneys), and followed up with action items via email. It’s critical to have and build relationships with other local property owners as this provides strength and resources in fighting those that attempt to wrongly restrict vacation rentals.

With the Coalition’s active support our lawyers found the city wrongly targeted “absentee owners” and sought to define short-term rentals as hotels. In fact, by targeting “absentee owners” the city was violating New Jersey law.

The Supreme Court judge ruled in our favor and instead of forcing the city to summary judgment, we reached an agreement with the city in December 2012 that repealed the ban and stipulated that the city wouldn’t prohibit short-term rentals or impose fees on those rentals in the future. We ended up paying $35,000 to our lawyers, but that was well worth it given the results we achieved. The more members you have the better as it helps defray the cost, our costs though not fun became affordable with more people involved. It was a very worthwhile investment!

I wanted to share the story of Atlantic City in case this can be replicated for others facing similar issues. Our short-term rentals bring economic benefits to Atlantic City. We are very clear with guests about the rules for staying at our homes, we enforce them, and there are existing rules on the books for dealing with those rare and isolated instances of bad behavior.

Rio Grande County knew that property owners were offering their homes for short-term rental; we just didn’t realize that it was occurring on such a large-scale.

The Rio Grande County Assessor who had been notified by a B & B owner that this type of use was in conflict with properly zoned areas of the county (Commercial or Special Use approval) was impacting these businesses.

I was given addresses of properties that were listed on the VRBO website, and from that I notified the property owners that this type of use requires a special use review. It didn’t take long for the Property Managers and Realtors to contact the County Commissioners for a special meeting.

Rio Grande County’s approach was not to divert or take away an individual’s way of keeping from foreclosure or providing a second income to prevent bankruptcy that resulted from the 2008 economic crisis that has impacted the nation.  The county realizes as well, that this type of use brings in added tourism; these families eat in local restaurants, golf, fish, ski which means additional tax dollars.

The county decided to make it easy; we created a simple Short-Term Rental Application to be approved administratively and renewed annually with a fee of $100.00. If we had required the owners to follow the special use review the fee is a one-time fee of $500.00 and it’s done. But that isn’t the route neither the property owners nor the Property Managers wanted to follow.

The result has been favorable, since September, I have received three Short-Term Applications for 2013. (There are still a lot more out there that have not come forward but I am sure that will change). (Optimistic)

I would tell other local governments to look at the bigger picture; this is bringing added tourism, more dollars into our community benefiting a number of businesses from low scale to high scale.

Local governments need to be flexible, things happen like the crash in 2008. People had to re-group. They had to get creative to hold on to what they had. This was one way of accomplishing that.  Local entities need to re-group and be creative as well.

In 2009, we were directed by the Palm Desert Planning Commission to look at an ordinance prohibiting all short-term rentals in single-family areas. The response from property owners using their home as a short-term rental were not welcoming to that, so we decided to require a conditional use permit for non-gated communities. The permitting process involved paying a $500 fee, notifying neighbors within 300 feet of short-term rental and a public hearing.

When the conditional use permitting process was approved, we were asked to report back in six months. After six months, we had the first application denied for no wrongdoing (a neighbor erroneously complained about trash), and we had only approved five conditional use permits when we knew there were roughly 600 unlicensed rental properties in our city.

Basically, we learned that we needed to focus on the dealing with the loss of transit occupancy tax, and to look at a nuisance as a nuisance no matter how the property is being managed or lived in. Any property can be a nuisance by creating noise, parking and trash violations. Those issues are not isolated to short-term rental properties and many of our short-term rental properties do not create those problems – less than 1% have had issues that we are aware of. The ordinance has laws to restrict short-term rentals to limit the potential of a nuisance property (capping the number of renters to two per bedroom and a maximum of 20 daytime guests for a house with 5 or more bedroom and not allowing outdoor music after 10 pm). If the rules are violated, the ordinance has a violations and fines process that can be heavy handed to deal with a nuisance or non-licensed short-term rental.

So we decided to create an ordinance that would promote the business side of our rental community establishing a low fee license to encourage registration.