Last year, Dr. Krupa Daniel began a standoff with the Borough of West Chester that has now taken up nearly two years of her life. Her problems began after renting two units in her Union Street home on Airbnb. The historic home she bought in 2022 is divided into five units. Three units are long-term rentals, one unit, according to Krupa, had been used as a short-term rental, and the last was an inlaw suite (which Krupa also set up as a short-term rental). Her real estate agent even suggested the use to help offset the home’s mortgage.
However, not long after Krupa listed her units, she received a cease and desist letter from the Borough of West Chester. According to the Borough Code, Airbnbs are not allowed. Except, they are. A lot.
“There are several in town,” admitted Building and Housing Director Kevin Gore at a recent Planning Commission meeting during a review of a new ordinance that would allow some short-term rentals to operate in the Borough and perhaps, aid Borough enforcement of the others. Although, according to Kevin, “We’ve gone after many of them.”
On this point, the Housing Director and Krupa would disagree. Her research, including a Right to Know request of Borough emails, shows that the Borough pursued the closure of just four short-term rentals since 2019. Last year, just one.
“I think it was particularly targeted at me,’ said Krupa, and whether true or not, it does appear that way. While she was told some neighbors had raised concerns with the Borough, neither she nor her tenants have ever received any official complaints. To Krupa, who was born in India, the complaint felt personal. “Being a woman of color, this is very typical of many acts of systemic racism I have gone through in my life,” she said.
So, she fought. She hired a lawyer. She researched legal precedents and she has tried to organize other short-term rental proprietors. The latter to little avail. “There are a lot of competing interests,” she said. Some rental-owners have been successful in staying under the radar and maybe they hope things will continue that way. “I tried to organize people but no one returned my calls,” she said. She is, however, making progress in her own case.
In her corner, she has the 2017 Pennsylvania Commonwealth Court case Reihner v. City of Scranton. The case, which is referenced in the Chester County Planning Commission guidelines on short-term rentals, found in favor of the resident after determining Scranton’s zoning code was not clear in its intentions towards Airbnbs. The current Borough code similarly fails to plainly stipulate its intention towards short-term rentals. An oversight Krupa believes should have been caught in the last Zoning Code update.
“Not addressing this big hole in the zoning code left the Borough vulnerable to legal liability,” she said via email.
While the Borough probably could have just added “short-term rental” to the current exclusions list, Borough Council has been split on whether or not to allow Airbnbs. There are two members solidly against, three in favor, and two supporting a middle ground.
“I think we are missing an opportunity if we don’t allow them,” Councilwoman Lisa Dorsey said in a discussion on the topic in August. Middle is where the new Short Term Rental Ordinance lands.
Under the new ordinance “short-term” or dwellings “rented for the purpose of overnight lodging for a period of less than 30 days” would be allowed in the Town Center. The rental would have to be a stand-alone unit – you can’t rent a bedroom in your home and you would need Borough Council approval before you could lease it. The code, however, does not require that the unit have its own off-street parking – a win for Airbnb advocates.
For opponents the win comes with the mapping – the new ordinance leaves a lot of units out. Namely, any unit currently operating outside of downtown (you can find the exact Town Center borderlines here.). If the ordinance passes, the question remains, how will the Borough enforce it? Will it take a proactive approach shutting down all rentals outside of the Town Center or will it continue to rely on neighbor complaints?
Pros and Cons
The discussions around whether or not to allow Airbnbs can be heated. Several studies have shown the proliferation of Airbnbs can harm a community. The term “Airbnb effect” was not coined as a positive.
In the years since Airbnb began in 2008, prospectors in many communities have bought up blighted houses and converted them into short-term rental units. The actions effectively removed the inventory from the long-term rental supply and pushed up local rents. However, the scope of this impact remains under debate. A recent study from AirDNA, a data analysis in the field, found that short-term rentals represent just 0.8 percent of the total housing stock in the U.S. and, according to their estimates, are responsible for a 1 to 4 percent increase in housing prices. These effects are not uniform across the country. Cities with high-infiltration of short-term rentals and low housing supplies, I’m looking at you New York have experienced greater impacts. All the negatives have led many cities to update their codes to include short-term rental enforcement. In January, Philadelphia changed its city code to require that all short-term rentals be licensed with the city. In September, New York City went several steps further. Not only do the rentals now need to be registered, but it is also an option only open to owner-occupants who are onsite at the time the unit is rented (no more renting your apartment while you are on vacation) and the rentals are limited to two guests at a time. (That’s a blow to my family-lodging options.)
The relationship between short-term renters and the community, however, is complicated. There is new evidence that short-term rentals have a positive impact on the business community. Especially, in areas without adequate hotel space (I’ll let you debate that one amongst yourselves).
“When we look at the geographical distribution of Airbnb compared to hotels, they’re everywhere. And that style of accommodation attracts tourism demand to areas that were historically isolated from tourism, which creates interesting results,” said Yongseok Kim, Ph.D., University of San Diego professor and author of new research on the effect of Airbnbs on the restaurant industry.
His study found that, for every “$100 worth of restaurant revenue growth, $12 can be attributed to a rise in the number of Airbnb stays in the local area.”
Airbnbs, when run by the homeowner, as is the case with Krupa, can also help increase the market of those who can afford to live in an area. According to the Mortgages.com article “Pay Off Your Mortgage Using Airbnb,” there’s an “entire subculture of borrowers” using short-term rentals as the solution to making their payments on time.
The debate around the place of Airbnb in the West Chester rental market will likely continue but, should the ordinance pass, at least the Borough will have an official documented position. As to the rest, it’s as Kevin said to the Planning Commission – “We are going to see what happens.”
Last month, the West Chester Planning Commission approved a final draft of the Short-term Rental Ordinance. The next step will be to schedule a public hearing. The date of that hearing has not yet been set but will likely take place sometime next month. The ordinance was discussed by Borough Council in August.