Hochul Approves STR Regulation

MOUNTAINTOP - A groundbreaking State law regulating and taxing short term rentals couldn’t have come soon enough or shouldn’t have come at all, depending upon variously voiced viewpoints.

The legislation, offered by Senator Michelle Hinchey and Assemblywoman Patricia Fahy and on the docket for seven years, was recently signed by Governor Kathy Hochul.

It is the first-of-its-kind STR regulation nationwide and follows efforts by some local towns to tackle a multi-faceted and contentious issue.

Stringent rules have been put in place within the past few years in Jewett and Lexington addressing complaints related to unneighborly loud “party houses” and complexities arising from parking, garbage removal, etc.

And a shortage of affordable housing has arisen as STR owners purchase potential homes, removing them from the market amid prices being driven up and out-of-reach for startup and middle class families.

Hochul’s approval makes, “billion-dollar booking platforms, like Airbnb and Vrbo, accountable to the communities where they conduct business,” Hinchey states in a press release.

“The law offers a new county-by-county look into the explosive growth of the short-term rental industry and is aimed at helping communities across the State manage housing availability and affordability while bringing in owed revenue from sales taxes and hotel and motel occupancy taxes.”

One key concern voiced as STR’s have become more prolific, especially during and after the pandemic, is a sense of unfairness in terms of competing with established motels and hotels.

STR’s have not been subject to the same oversight and taxation as the established overnight stops even while tapping deeply into the same customer base, drawing from a limited pool.

The term “level playing field” has become a catch phrase for proponents of the law, even as there is unsurety that what is essentially a bed tax will do anything to balance the competition.

It will bring in money but there is again uncertainty on how those dollars will be distributed and how many actual greenbacks will reach the local level.

Henceforth, under the new law, booking platforms will be required to report quarterly to the New York State Department of State (DOS) on the number of bookings it facilitates in each county.

Counties can then choose to create local registries and receive precise data on those quarterly reports, detailing rental locations, occupancy nights, guest counts, taxes collected, etc.

That information, however, does not cover so-called “ghost” STR’s that do not go through the mainstream booking process or may now withdraw.

And it remains to be seen how the legislation helps communities, such as Jewett and Lexington that are years ahead of the State in trying to get a handle on what has been a source of intense controversy.

“For the first time, communities will have the tools to grasp the true scope of short-term rentals, empowering them to develop strategies to expand stable housing options, increase affordability, and unlock untapped revenue,” Hinchey stated.

“Getting this done took serious teamwork with leaders from every level of local government, the tourism and hospitality industry, and housing advocates,” Hinchey stated.

The regulations are being welcomed, albeit with a wait-and-see approach, by Jewett town supervisor Greg Kroyer and Lexington town supervisor Jo Ellen Schermerhorn.

Jewett was a pioneer among mountaintop towns, enacting STR rules five years ago during a rising storm of complaints particularly related to STR owners not being good neighbors.

The town pays for an outside consultant to gather information on active STR sites, requiring local registration with an annual fee.

Those dollars pay for the consultant and any hours spent on enforcement by local officials, bringing a calmness to the storm.

That calmness is delicate and a headache to maintain. “It’s too early to tell how this will affect our local requirements,” Kroyer says.

“We have gotten a handle on the party houses,” Kroyer says, referring to STR renters who disturb neighbors with raucous and rude gatherings. 

“If somehow this can help us, we would be happy not to hire a consultant and to get out of the short term rental business,” Kroyer says.

Lexington followed in Jewett’s footsteps, writing an STR law. “We’re glad to see this [State] legislation come,” Schermerhorn says.

“Hopefully we can let the State know what folks we have [on the local registry] and pick up ones maybe operating under the radar.”

Lexington puts a 10 percent limit on housing that can be used for STR’s but “sometimes, we’re not finding out someone is renting unless a neighbor finds out and tells us. That’s a big problem for us,” Schermerhorn says.

New York State Association of Counties NYSC) president Benjamin Boylin II embraces the law saying it will “finally place short-term rentals on a level playing field alongside hotels and motels and generate local revenue from visitors that supports county tourism and essential services such as public safety, social services, and infrastructure improvements.”

The law is being similarly hugged by the New York State Hospitality & Tourism Association, New York State Conference of Mayors and the statewide Association of Towns.

Not so much love is being shown by Airbnb policy director Nathan Rotman who stated, “this unnecessary bill imposes a new, unfunded mandate on counties and creates a complicated bureaucratic system that burdens homeowners trying to earn modest income to pay their bills.

“It also puts the personal information of hosts throughout the state at risk due to data sharing requirements,” Rotman stated.

Greene County is expected to opt into the State program, according to county legislature chairman Patrick Linger.

“We could be looking at significant revenue,” Linger said in a phone interview, noting the county has been considering an STR bed tax, although that could have been years down the road.

State officials estimate that over the past five years, communities have lost up to $550 million in potential sales and occupancy tax via STR’s.