Pennsylvania Supreme Court decision in a short-term rental case could affect Airbnb listings

The state Supreme Court ruled a Monroe County township’s zoning ordinance bars the short-term rental of homes in strictly residential districts in a widely anticipated decision with statewide implications for homesharing platforms like Airbnb.

In reversing a Commonwealth Court decision, the court found Hamilton Township’s zoning ordinance does not permit the “purely transient use” of a house in a residential area of single-family homes.

The decision comes as short-stay rentals in Pennsylvania have become increasingly prevalent in recent years, driven by platforms such as Airbnb, VRBO and HomeAway. With the trend too new to be addressed in most zoning ordinances, many municipalities have had to make case-by-case determinations about whether and where to allow the rentals.

The Hamilton Township case involved a Brooklyn, New York, man, Val Kleyman, and his company, Slice of Life LLC, which purchased a home as an investment property to be used exclusively for short-term rentals.

Kleyman, who never lived in the home, advertised the property for short-term stays — a minimum of two nights and a maximum of a week — for up to 17 guests.

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The township cited Kleyman in 2014 for operating a short-term rental in violation of its zoning ordinance, and Monroe County Court upheld the township’s position.

Slice of Life appealed to Commonwealth Court, which ruled for the property owner in June 2017.

Because the township ordinance did not define terms such as “transient lodging” and “transient tenancies,” Commonwealth Court found the zoning statute to be ambiguous and said it should be interpreted in favor of Slice of Life.

The township and its zoning board appealed to the state Supreme Court, which heard arguments late last year.

In a unanimous ruling , the Supreme Court said the lower court had improperly found that any use not specifically prohibited by a zoning ordinance was deemed permitted.

The court pointed out a single-family home can be used “in as many ways as the imagination allows,” making the standard set by the Commonwealth Court impossible for drafters of zoning ordinances to execute.

Declaring there is “no ambiguity” in the language of the Hamilton Township ordinance, the court said the use of the Slice of Life property was “purely transient,” which is precluded.

“Individuals rent the premises for minimum of two nights and up to one week at a time. ... This fits squarely within the common usage of the word ‘transient,’” the court said.

Katherine A. Janocsko, an attorney for the Pittsburgh law firm of Tucker Arensberg who has written about home-sharing regulation and the Slice of Life case, called the decision a “win” for municipalities who try to control short-term rentals within single-family residential districts.

“As platforms like Airbnb and HomeAway continue to rise in popularity, the opinion serves as a reminder to homeowners that listing your home for rental on such sites may be in violation of your local zoning ordinance,” Janocsko said in an email.

Gerard Geiger, an attorney with Newman, Williams, Mishkin, Corveleyn, Wolfe & Fareri in Stroudsburg who represented the township zoning board, said the ruling seems to provide definitive guidance for short-term rentals involving a “purely commercial use” in a single-family residential district.

“At least in my area of the Poconos, the purely commercial use has been the biggest problem and this fixes that,” Geiger said.

However, he said the decision may leave some other questions. For example, he questioned how the court would treat an owner-occupied home where the owner is renting out a portion of the house on a short-term basis.

“I don’t think that was decided by this opinion,” Geiger said.

Bethlehem enacted a short-term rental law in 2018 that spells out inspection and licensing requirements, including that the owner live in the home being rented to overnight guests.

That law is being challenged by a company set up by Dr. Mary Ellen Williams and John Brew Jr., a married couple who own three homes in a historic neighborhood. A district judge found Williams and Brew, who live next door to one of the three properties, in violation of the ordinance.

Slice of Life sold the Hamilton Township property after filing its appeal to the Supreme Court and did not participate in the arguments before the justices.

Joshua Windham, an attorney for the Institute for Justice, a public interest law firm based in Arlington, Virginia, that supported Slice of Life’s position and presented arguments to the court, said the Supreme Court decision weakens property rights protections in the commonwealth.

One concern is that, with the ruling, municipalities with outdated zoning ordinances have no incentive to update or amend those statutes to clarify where short-term rentals are or are not permitted in their jurisdictions, he said.

“I do think this is going to hamper the growth of the homeshare economy in Pennsylvania,” Windham said.

The decision comes as short-stay rentals in Pennsylvania have become increasingly prevalent in recent years, driven by platforms such as Airbnb, VRBO and HomeAway. With the trend too new to be addressed in most zoning ordinances, many municipalities have had to make case-by-case determinations about whether and where to allow the rentals.

The Hamilton Township case involved a Brooklyn, New York, man, Val Kleyman, and his company, Slice of Life LLC, which purchased a home as an investment property to be used exclusively for short-term rentals.

Kleyman, who never lived in the home, advertised the property for short-term stays — a minimum of two nights and a maximum of a week — for up to 17 guests.

The township cited Kleyman in 2014 for operating a short-term rental in violation of its zoning ordinance, and Monroe County Court upheld the township’s position.

Slice of Life appealed to Commonwealth Court, which ruled for the property owner in June 2017.

Because the township ordinance did not define terms such as “transient lodging” and “transient tenancies,” Commonwealth Court found the zoning statute to be ambiguous and said it should be interpreted in favor of Slice of Life.

The township and its zoning board appealed to the state Supreme Court, which heard arguments late last year.

In a unanimous ruling , the Supreme Court said the lower court had improperly found that any use not specifically prohibited by a zoning ordinance was deemed permitted.

The court pointed out a single-family home can be used “in as many ways as the imagination allows,” making the standard set by the Commonwealth Court impossible for drafters of zoning ordinances to execute.

Declaring there is “no ambiguity” in the language of the Hamilton Township ordinance, the court said the use of the Slice of Life property was “purely transient,” which is precluded.

“Individuals rent the premises for minimum of two nights and up to one week at a time. ... This fits squarely within the common usage of the word ‘transient,’” the court said.

Katherine A. Janocsko, an attorney for the Pittsburgh law firm of Tucker Arensberg who has written about home-sharing regulation and the Slice of Life case, called the decision a “win” for municipalities who try to control short-term rentals within single-family residential districts.

“As platforms like Airbnb and HomeAway continue to rise in popularity, the opinion serves as a reminder to homeowners that listing your home for rental on such sites may be in violation of your local zoning ordinance,” Janocsko said in an email.

Gerard Geiger, an attorney with Newman, Williams, Mishkin, Corveleyn, Wolfe & Fareri in Stroudsburg who represented the township zoning board, said the ruling seems to provide definitive guidance for short-term rentals involving a “purely commercial use” in a single-family residential district.

“At least in my area of the Poconos, the purely commercial use has been the biggest problem and this fixes that,” Geiger said.

However, he said the decision may leave some other questions. For example, he questioned how the court would treat an owner-occupied home where the owner is renting out a portion of the house on a short-term basis.

“I don’t think that was decided by this opinion,” Geiger said.

Bethlehem enacted a short-term rental law in 2018 that spells out inspection and licensing requirements, including that the owner live in the home being rented to overnight guests.

That law is being challenged by a company set up by Dr. Mary Ellen Williams and John Brew Jr., a married couple who own three homes in a historic neighborhood. A district judge found Williams and Brew, who live next door to one of the three properties, in violation of the ordinance.

Slice of Life sold the Hamilton Township property after filing its appeal to the Supreme Court and did not participate in the arguments before the justices.

Joshua Windham, an attorney for the Institute for Justice, a public interest law firm based in Arlington, Virginia, that supported Slice of Life’s position and presented arguments to the court, said the Supreme Court decision weakens property rights protections in the commonwealth.

One concern is that, with the ruling, municipalities with outdated zoning ordinances have no incentive to update or amend those statutes to clarify where short-term rentals are or are not permitted in their jurisdictions, he said.

“I do think this is going to hamper the growth of the homeshare economy in Pennsylvania,” Windham said.

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