Court issues decision on short-term rentals in residential areas

A recent Pennsylvania Supreme Court decision sided with a Hamilton Township rule that banned short-term rentals in residential areas.

With the explosion of short-term rental availability throughout the country, including Pennsylvania HomeAway, VRBO and AirBNB over the last several years, there have been several zoning issues in different municipalities. Despite thousands of short-term rentals in the commonwealth, few of the more than 2,500 Pennsylvania municipalities have updated their zoning ordinances to address short-term rentals, shifting the burden onto courts to determine how to handle potential zoning enforcement issues arising from short-term rentals.

The Pennsylvania Supreme Court’s recent decision in Slice of Life, LLC v. Hamilton Township Zoning Hearing Board provides minor clarification on the issue. The property owner in Slice of Life purchased the property with the sole intent of renting it out as a short-term rental, with a minimum stay of two nights and a maximum stay of up to one week. The residence was rented for about half of the weekends during the year. In 2014, a Hamilton Township zoning officer issued an enforcement notice and instructed Slice of Life to cease using the property as a hotel/transient rental. Slice of Life appealed the enforcement notice to the zoning hearing board and county court, losing at both levels. Slice of Life appealed and won before the Commonwealth Court. The Commonwealth Court essentially held that short-term rentals were permitted because the zoning ordinance did not specifically prohibit such uses. Hamilton Township then appealed to the Pennsylvania Supreme Court.

In its decision, the Supreme Court held the purely transient use of a residential property for short-term rentals is not compatible with Hamilton Township’s zoning ordinance restricting use within a residential district to a “family,” that is defined as including a “single housekeeping unit.” The Supreme Court further rejected the Commonwealth Court’s reasoning that non-excluded uses were otherwise permitted. Instead, the Supreme Court held that an excluded-unless-expressly included standard “is the only workable standard.”

It is impossible to predict the impact of the Supreme Court’s decision in Slice of Life on the availability of short-term rentals. The Supreme Court stressed in its opinion the purely transient use of the property in that it was only used for short-term rentals; the owner never occupied the property as a residence. Heavy focus was also placed on the specific language of the zoning ordinance itself. This indicates the impact may be limited to only those properties used exclusively as a short-term rental using the same “family” and “single housekeeping unit” language found in Hamilton Township’s zoning ordinance.

Significant questions remain on properly applying residential zoning ordinances silent as to short-term rentals of properties not used solely as short-term rentals. Due to the open questions, property owners seeking to use their property for short-term rental purposes are encouraged to first seek a qualified attorney to advise on the specific zoning ordinance applicable to the property before renting the property.