New Ruling Says that Short-Term Vacation Rentals are NOT Permitted in Single Family Zoning
Up until April 26, 2019, short-term vacation rentals (like Airbnb, VRBO, HomeAway, etc.) were probably allowed in zoning districts where single family homes are permitted. In April, the Pennsylvania Supreme Court decided that a short-term vacation rentals are not permitted as a single family use.
What do municipalities do now?
First, we should review how the Courts got to this point. It is an interesting development. The first case (Marchenko) dealt with a homeowner who rented her home for less than 25% of the year. The second case (Shvekh) had homeowners who rented their home for about half the year. The third case (Slice of Life) has an owner who bought the property solely as an investment, and never lived there at all. The Commonwealth Court said the first was OK, and then the next two cases built on that decision.
The Court in Slice of Life focused on the requirements of a “single housekeeping unit.” The Court said this has a very specific, definite, established definition. A single housekeeping unit requires “a group of individuals… sufficiently stable … so as to not be fairly characterized as purely transient.” The Slice of Life Court said that short-term vacation renters are “purely transient” – they do not reside at the house long enough to be considered a “single housekeeping unit.” The Court also criticized the way that the Commonwealth Court interpreted the zoning ordinances. In Marchenko, the Commonwealth Court said that if a specific use is neither permitted nor prohibited, the Court is supposed to read between the lines to favor the landowner. The Supreme Court said exactly the opposite. They said that a use is excluded from a zoning district unless it is expressly included in that district.
Until the Supreme Court’s decision in Slice of Life, municipalities were worried (or should have been worried) about short-term vacation rentals popping up in every residentially-zoned district. Unless the zoning ordinance defined a short-term vacation rental and then specifically excluded it, there was a great chance that it would be allowed in any single-family zoned district. Today, that worry is mostly gone. If the zoning ordinance uses “single housekeeping unit” to define single family uses, then the zoning ordinance excludes transient uses like Airbnbs.
This does not mean a municipality should stop thinking about short-term vacation rentals. It is a fact of life that short-term vacation rentals are here to stay. A study from Penn State entitled “From Air Mattresses to Unregulated Business: An Analysis of the Other Side of Airbnb” found that the number of people who operated an Airbnb solely as an investment (i.e. never lived in the home) grew 87.3% from 2014 to 2015, the last year of the study. Short-term vacation rentals are often businesses, and should be dealt with as businesses. This means that a zoning ordinance should define a short-term vacation rental and provide for it through zoning.
By doing this, the municipality can provide for the appropriate location of short-term vacation rentals. The municipality can also create requirements for licensing, inspection, operating standards, etc. In some municipalities, this may mean allowing them only in very low density residential areas. In others, it may mean allowing them in high density areas that are near local attractions. Regardless of how the zoning ordinance treats short-term vacation rentals, we believe it is very important for a municipality to make a decision to deal with them.