Debate around short-term rentals has divided communities around the region
By Tim Rowland
In the summer of 2008, two San Francisco roommates inflated an air mattress in their living room and called it a bed and breakfast — Airbed and Breakfast, to be exact. Using startup capital earned by selling Barack Obama- and John McCain-themed breakfast cereals at political conventions, they offered lodging online at Airbedandbreakfast.com, later shortened to Airbnb.com.
On the other side of the country, where at that moment housing values were suffering the effects of a collapsed subprime mortgage market, this opening salvo of the Sharing Economy was about to disrupt many lodging markets, including the Adirondack Park’s.
Within a decade, a new term had entered Adirondack Park lexicon: Short Term Rentals, or STRs.
About this series
Adirondack Explorer is highlighting the region’s housing challenges, with a multi-part series running in our magazine, online and in a regular newsletter you can sign up for here. Award-winning Freelance Journalist Tim Rowland investigates causes of the housing shortage, housing’s effects on other aspects of Adirondack life, hacks that people use to get into a home and potential solutions being tried here and elsewhere. His reporting is based on review of real estate data, documents and extensive interviews.
Before they had become a full-fledged thing in the park, John Peck of Wilmington had stumbled upon Airbnb while trying to figure out how to hold onto the land that had been in his family for generations, but was now being taxed at an excess of $15,000 a year.
So he divided the house, half as his family’s residence, half as a short-term rental. Almost immediately, it felt as if a weight had been lifted, Peck said, “Because even a full time job wasn’t enough to sustain this property.”
Short-term rentals, for local people, can be an obvious answer to many embedded Adirondack problems: taxes, medical bills, fuel costs, poor wages. Cobbling multiple jobs is an Adirondack tradition, and Peck sees little difference between having two jobs and having one job plus a short-term rental.
Across Route 86 his parents did the same, renting out a couple of bedrooms that were particularly attractive to foreign tourists who wanted interaction with a family well-versed in American culture and local history.
“Authenticity” became a buzzword and these small, family-based STRs had plenty of that. “They can hear my kids playing through the wall,” Peck said.
Even before the pandemic, younger travelers liked the idea of the sharing economy and staying in a home instead of an antiseptic motel room.
“Millennials went crazy for them,” said Jamie Konkoski, community development director for the village of Saranac Lake.
The pandemic turbocharged the industry as travelers sought to minimize the number of fellow tourists they came in contact with. Investors, big and small, noticed and STRs started proliferating and taking a new, darker turn as residences became rentals.
What also changed was the technology — the fantastic ease with which anyone with a spare room could become a well-compensated landlord. “Right this second I can get on my computer and in 10 minutes I can turn my property into an STR,” said Dan Kiefer-Bach, community development director for the nonprofit LivingADK in Old Forge.
STRs democratized the industry. It was no longer necessary to have a big advertising budget or a brand name to get noticed by vacationers.
And, thanks to technology, gone were the arduous, dark days when those intent on an alpine holiday had to conduct multiple lodging searches and call around to find a place with open dates. Rooms no longer needed to be reserved months in advance. And, during the pandemic, as fast as new STRs could be posted online, vacationers with cell phone apps were there to snap them up.
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For landlords, Airbnb made STRs a surer bet than renting long-term. It took care of the billing, booking, insurance and taxes. It screened renters. Long-term tenants were more likely to trash the property, miss payments and complain. Eviction, if necessary, was a long and expensive process.
Less enthralled have been STR neighbors, who during public hearings have complained of parties, parking problems and congestion. Town officials, meanwhile, worried about the safety of these rentals and the increased drag on public utilities.
And the effect on affordable housing was palpable. From 2019 to 2022, STR listings in the heart of the Adirondack Park grew by 43%, according to a study by Camoin Associates of Saratoga Springs.
“While the impact of short-term rentals on local housing markets is complex and nuanced, these units are undoubtedly having a negative impact on the communities where they are highly concentrated,” the study’s authors wrote.
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Communities split down the middle, with those benefiting from the STR gold rush on one side, and those who believe STRs were a cancer on traditional Adirondack communities on the other. STRs have changed long-standing community social stresses. What were once insider vs. outsider conflicts are now pitting resident against resident. Longtime friends are no longer on speaking terms.
That tension has frequently erupted as local officials take steps to regulate the industry.
Tiny towns that had often decried the lack of citizen participation suddenly found a way to attract vocal citizens to their monthly meetings: put STRs on the agenda.
“I’m nervous about a law that will drastically change what we have now, when I don’t know what the effect will be,” said Kristy Deyo, who owns Cedar Run Bakery and had rental property in Keene.
Wearing her two hats as a business owner and STR owner, Dayo says she can see both sides. A lack of residential housing has hampered her ability to attract employees, and her local friends were shut out of the market when the pandemic brought waves of new buyers from the cities. “None of the local people could compete with what was coming at us,” she said.
Wilmington Supervisor Roy Holzer, who owns two short-term and four long-term rentals, has led his board toward adopting STR regulations and is in favor of greater oversight.
Still, he said STRs give outlying towns a better chance of competing with Lake Placid and Saranac Lake for tourism dollars. Although Wilmington’s motels have their campy charm, they are aging and lack the luxury amenities that many travelers demand. “But I’ll put Wilmington’s STRs up against any from Lake Placid,” Holzer said.
Nor is it just the STR owners who have been reaping rewards. Home cooks became caterers. Hotel employees left their jobs cleaning rooms and went to work for themselves cleaning STRs. “You can make $15 an hour as a hotel maid, or make $200 spending a couple hours cleaning an STR,” Holzer said. “Which are you going to choose?”
Yet for residents wanting to rent or buy a home there was little doubt that the STR movement was lacerating the available housing stock.
Wilmington has 414 households and more than 100 STRs. Town Councilman Tim Follos, who often spars with Holzer on the STR issue, said it strains credulity to claim that this ratio isn’t making affordable housing difficult to find. It’s no coincidence, he said, that the rise of STRs and Adirondack housing shortages at the same time.
“It is a struggle, and it’s deterring people from living here — not just deterring, preventing,” Follos said. “This hits people who were born and raised in Wilmington and are heavily invested here, whose adult children cannot find housing.”
In some respects, Holzer and Follos aren’t that far apart. Follos would less-heavily regulate owner-occupied properties, while charging “clerkless hotels” higher registration fees and holding them to higher standards. “They’re businesses, and they should be treated like businesses,” Follos said.
Holzer similarly says it’s unfair that hotels must pay sales tax, while STRs don’t (both pay bed taxes). Charging sales tax would mean an extra $1 million in Essex County revenue, which could be used for housing initiatives, he said.
A state STR law might also streamline enforcement, while turning down the temperature on community arguments — but Holzer acknowledges the industry has a powerful lobby that may be tough to fight. Indeed, in the last six months of 2022, Airbnb spent more than $200,000 lobbying New York elected officials, according to the New York State Commission on Ethics and Lobbying in Government.
One other solution seems possible, if for now unlikely: the STR meteor could burn itself out.
Already, rising interest rates have made short-term rentals a less-attractive investment. Especially for amateurs, keeping tabs on the property, dealing with regulatory paperwork, paying fees and competing on prices might have an effect. “I think you will start seeing people say, ‘ah, I’m just not going to bother anymore,’” Holzer said.
The series is funded in part by a grant from the Generous Acts Fund at Adirondack Foundation and by the Annette Merle-Smith Community Reporting Fund at Adirondack Explorer. If you would like to support our community reporting, get started here.