State College, PA, Airbnb rentals pose problems for council

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The Penn State campus is seen in front of the College Heights neighborhood Friday, August 12, 2022.

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Stefan Lewellen and his wife still can’t forget the view that filled their quiet College Heights neighborhood at State College earlier this year.

About two dozen college-aged students descended on the nearby Hillcrest Avenue property, with neighbors describing trash and beer cans littering the lawns and street, public urination, smells of marijuana — and enough noise so Lewellen’s family couldn’t even get their 1-year-old down for a nap the next afternoon. It was just the beginning.

For four months, Lewellen, his wife Jenn Baka and their two children endured parties of varying sizes in a neighborhood usually packed with families, teachers and retirees. They would soon learn that the offending landlord, who does not live in Pennsylvania, had stopped renting out his five-bedroom home to long-term tenants in favor of renting it out more like a hotel, a few days at a time through a rental at lucrative short term. term rental site like Airbnb.

Throughout the borough and surrounding municipalities, the rise of short-term rentals has caused growing concern. About 200 properties in the borough have so far been identified as operating as hotels, renting out for a few days at a time, with some becoming a nuisance and others remaining quiet. Some landlords are simply looking to supplement their income by renting out an extra bedroom or two on football weekends while staying in their home; others seek to operate homes entirely as 24/7 hotels while living elsewhere.

“My view is that people should be able to do whatever they want with their homes, as long as it doesn’t create negative externalities for the community,” Lewellen said. “And the problem with these kinds of continuous Airbnb rentals is that you’re turning a house into a ‘tourist house.’ And that creates negative externalities for the community.

“And I think our case is an example of some of the bad things that can happen to a neighborhood.”

State College Borough Council is expected to vote Monday night on a series of restrictions that would make it harder for these Airbnb properties – or short-term rentals – to operate in the borough. But the problem is far from being black on white.

By attempting to arrest the worst offenders, the borough could also end up punishing vulnerable people that even Lewellen has made a point of defending.

An Airbnb owner, a retiree who has asked that his name not be used, is renting out part of his home to help supplement a fixed income. They rent extra rooms, rarely leave the property, and make sure to tell their guests to be loud downtown but quiet around the house.

If the borough council passes the proposed ordinance as written, this retiree likely won’t be able to stay in the place he’s called home for decades.

“Even though I love State College, maybe I should leave because I can’t afford it,” they said.

A complicated question

The problem with the short-term rental debate is that there aren’t just two sides. Every Airbnb operator – or operator through a similar website like Vrbo, Booking.com, Plum Guide, etc. just for Airbnb.

The reward is attractive. According to AllTheRooms, which provides analytics and data for short-term rentals, a two-bedroom, two-bathroom property in State College — with four guests and 38% occupancy — can potentially generate more than $45,000 in annual income.

State College residents and husband/wife team Josh and Lizzie Parra own or manage at least half a dozen short-term rental properties. They said they understood the concerns of families like Lewellen and Baka, and that’s why anyone who spends a night or two at their properties must be at least 25 years old. On top of that, because they are local, they can walk past properties to see if there are any outside issues.

For Lizzie, who grew up in the borough, a neighbour-friendly, well-maintained Airbnb property remains more ideal than one owned by those who only come during football weekends and don’t maintain the property. Her husband agreed.

“As long as you maintain the property and watch it and make sure it doesn’t go crazy then if you can afford to buy property here and pay the taxes then I don’t see it problem,” he said. added.

Others, even the Airbnb retiree who spoke to CDT, disagreed.

“I understand that people want to make a living doing this,” the pensioner said, “but, in a small town like this, you take away houses that people can afford and there’s no ‘place to live.’

What could change?

Although the borough council first passed an ordinance relating to short-term rentals last year, enforcement has yet to begin, due to the complexity and time-consuming nature of the issue.

But, if the borough council takes action on Monday, landlords will be provisionally required to submit their short-term rental applications online by mid-October. Violations, which will start at $300, will then be enforced.

Some of Monday’s biggest proposed changes:

  • Added an activity cap on the number of nights a property can be rented out for short term rental to a maximum of 60 nights per year
  • Requires one off-street parking space per room rented to be located on the property
  • Added a limit of nine rooms that can be rented at a time as short-term rentals
  • Require that an annual activity log be submitted at the time of short-term rental license renewal
  • Short-term rental license fee increased to $300 from current $175

In conversations with borough officials, Airbnb operators, and community members, the biggest debate seems to focus on the activity cap. The Parras told CDT they were busy more than 220 days a year, so a 60-day cap would significantly reduce their activity. The pensioner also pointed out that this cap was the rule change that would likely force them out.

On the other hand, even community members are unhappy with the limit. But many think it should be less, like College Township’s 45 nights. Some even prefer ceilings below.

“We’d probably like to see that closer to 30 nights,” said Jared Oyler, who also lives next door to the problematic property on Hillcrest Avenue, which has been quiet since late June. “You want to make sure you have enough nights that a user can rent over big football weekends and things like that. … So we’d like to see it lower, but I still think it’s good to have a ceiling on that.

Parra came up with a different idea.

“If they want to come up with something like this, it should be more of a punishment for people who continue to violate the proposed regulations that they put in place,” he said. “I don’t think they should put this on everyone who can rely on this source of income.”

Some properties might even encounter problems with regulations in the existing order, once it is applied. In the current order, for example, a person whose name is on the lease must live in the unit for at least eight months a year.

It’s not yet clear how many properties don’t meet this requirement, or others, but the borough has hired a national short-term rental monitoring agency, Granicus Host Compliance, to help identify them.

“As we move forward with the implementation of short-term rental licensing, I believe we are ready – our staff are ready – to take enforcement action on a number of properties,” said the director of Borough planning, Ed LeClear.

What happens afterwards?

Borough council heard a public presentation on the proposed changes on Aug. 1, with five community members — and no Airbnb operators — opting to speak publicly. Council will now meet at 7 p.m. Monday with a vote scheduled on whether to accept changes to the short-term rental ordinance.

The council meeting will once again be hybrid, available both online via Zoom and in person at the State College Municipal Building.

According to the planned schedule released earlier this month, Granicus is expected to provide staff training through early September; a community information campaign and a first mailing on the prescription will be posted online by mid-September; and the online deadline for landlords to submit their short-term rental permit application will likely come in mid-October.

This story was originally published August 14, 2022 4:17 p.m.

Josh Moyer earned his BA in Journalism from Penn State and his MS from Columbia. He has been involved in news and sports writing for nearly 20 years. He boasts the best athlete he’s ever seen as Tecmo Super Bowl’s Bo Jackson.

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