Short-term rentals have become popular for a reason. Unique amenities, picturesque locations, home-like atmospheres, affordable prices, and flexibility set many short-term housing rentals apart from traditional hotels. Coupled with the ease of platforms like Airbnb and VRBO, it’s easier than ever for owners to rent portions of their properties. However, a market once dominated by homeowners leaving town for a weekend or renting spare cottages has exploded into a multi-million-dollar industry.  

An increasing number of short-term rentals are owned by commercial operators who buy up homes and turn them into profit-generating rentals. These commercial investments in residential real estate lead to inflated housing costs, loss of long-term rentals, and smaller year-round populations. Small tourist-dependent towns like those in the Adirondack region have been especially impacted because demand from visitors is high and new construction to meet the increased demand for homes is restricted by limited developable land and the high cost of construction. Many communities must now discuss what they can and should do to protect their community and limited housing stock. 

Adirondack residents have for decades needed to compete against often wealthier families looking to buy vacation homes throughout the region, which has contributed to the gradual loss of full-time residents in many communities. However, while second-home purchasers often look for a secluded get-away, investors in short-term rentals will consider properties anywhere, whether in town or in the woods. The lack of legal distinction between residential and commercial rental uses means that anyone looking to live and work in Adirondack communities now needs to compete in the same real estate market as short-term rental investors and entrepreneurs. But how can a family making $70,000 a year win out over an investor looking to purchase a home that could generate $70,000 a year as a short-term rental? 

The long-term rental market has not been spared either. There have been multiple recent accounts of families throughout the region who have lived in their home for years, only to have their leases terminated because their homes are being converted to a short-term rental. This hits especially hard in rural Adirondack communities where there have always been a limited number of long-term rentals. But the financial incentive for property owners is clear. A 3-bedroom home in many towns could generate around $1,200 a month as a long-term rental. A short-term rental may generate $1,200 a week.  

Though many local leaders understand the negative impact of short-term rentals on their communities, the economic benefits the rentals generate have often slowed down efforts to regulate them. Opponents to regulations on short-term rentals cite the benefits of increased year-round tourism and revenue from occupancy taxes. Some local property owners fear how new regulations may impact their ability to generate income by operating their own short-term rentals. The political reality is that a complete ban on short-term rentals is likely to receive significant push-back and have economic consequences. But there is a middle ground between doing nothing about short-term rentals and banning them entirely. The key is disincentivizing commercial short-term rentals s and dissuading investors, not undermining local people looking to generate a little extra cash from their property. The duty to strike that balance falls to local governments.   

Some of the most impacted communities, such as Old Forge and Lake Placid, have recently imposed moratoriums on new short-term rentals or implemented specific policies that govern them. But many communities lack any kind of local policies despite large increases in the number of short-term rentals. If unmitigated, short-term rentals will consume more housing stock and erode the number of houses occupied by permanent residents, causing a particularly damaging brand of rural gentrification.  

Local governments have the responsibility to assess the impact that short-term rentals are having in their community and determine which actions are necessary to protect the needs of residents. Understandably, the volunteers and part-time staff who lead many Adirondack towns may not be sure how to manage the issue, especially since short-term rentals and efforts to regulate them are quickly evolving. 

I hope that my recently completed report, Municipal Short-Term Rental Policies: Analysis and Recommendations for Adirondack Communities, can serve as a reference to Adirondack leaders on how they can manage short-term rentals in their jurisdictions. The most common methods are rooted in local zoning and land-use ordinances – powerful and customizable tools that can set the terms for where and when a property can be used as a short-term rental, and importantly who can operate a short-term rental. Municipalities have the power to limit or prevent home conversions backed by outside investment that are undermining the housing market across the Adirondacks and turning homes into hotels. 

Both the full report and executive summary, completed in fall 2022, are available as resources for local leaders as they address the challenge of short-term rentals in their community. In addition to providing data that backs why short-term rental regulation is necessary throughout many Adirondack communities, the report analyzes a dozen existing regulations from throughout the nation and provides recommendations regarding effective elements of an ordinance in the context of the Adirondacks.

Contact Adam Bailey with questions or comments.