Buffalo, N.Y. (WBEN) - In response to escalating concerns regarding short-term rentals in the City of Buffalo, the Buffalo Common Council adopted a resolution on Tuesday imposing an immediate temporary moratorium on Special Use Permits for those rentals in certain districts across the city.
The resolution, "Moratorium on Short-Term Rental Special Use Permits," calls for an immediate, but temporary hold in the Fillmore, North, and South Districts on Special Use Permits for short-term rentals in the City of Buffalo. This action comes as a result of the Council's commitment to addressing the rising challenges posed by non-owner-occupied properties utilized for short-term rentals.
"The Council is trying to be proactive on this issue, which is not necessarily a citywide issue, at this point, but it could be," said North District Councilman Joe Golombek. "I know Mitch [Nowakowski] is having some problems in Allentown, and I've actually had a large increase in the number of short-term rentals in the Grant-Amherst neighborhood. Before it gets out of hand, I want to make sure we take a look at this, and do whatever is necessary to make sure it's not a long-term problem."
Golombek feels there are a lot of issues that could spring up with this from census data, livable, affordable neighborhoods, are just a few of the problems the city could face.
Peter Hunt from Hunt Real Estate sees this as a backlash from what other cities across the country have been seeing. He feels there's a lot of parts of the local hospitality environment that see short-term rentals like Airbnbs as a real threat.
"They're also very, very difficult to control," said Hunt in an interview with WBEN. "Someone really doesn't know what they're getting until they get there. Having said that, they're extremely popular. There extremely popular not only from a user standpoint, but also from, I guess, an entrepreneurial standpoint. This has become a really important part of the real estate industry, in terms of allowing people to begin to build an investment portfolio through short-term rentals. And it's something that provides a much better return on investment for the owner than a simple longer-term rental like an apartment for, let's say, a year, something like that."
The Council enacted Ordinance Amendment Chapter 264, Rental Dwelling Unit Registration, on Oct. 29, 2019, establishing regulations for licensing non-owner-occupied short-term rentals through a Special Use Permit. However, the surge in applications for these permits, primarily in specific neighborhoods, has caused significant disharmony within communities.
The method the Council developed in 2019 was appropriate for the time, but the Council says neighborhoods are experiencing new issues with the influx of short-term rentals.
In addition, the Council says there is an oversaturation of short-term rentals, and some neighborhoods are beginning to feel a loss of identity. Short-term rentals are condensing in areas to the degree that residential streets have multiple Special Use Permits per-block, which it believes is causing neighborhood instability.
Another major concern is that short-term rentals are replacing units that have previously served as homes for renters. As the City grows, the Common Council feels the need to ensure there are enough habitable rental properties.
The Council has observed a substantial increase in calls and complaints to 311, 911, and district Council offices related to this issue.
Additionally, there is a significant number of unregistered short-term rental properties, raising serious concerns about health, safety, fire, and building code compliance. Currently, all the units are not being inspected or licensed.
The city does not currently have the capacity to investigate all properties that are out of compliance. The Inspections department is rapidly working towards that capacity, which will greatly assist in ensuring the health and safety of short-term rental consumers.
"One of the problems you have is if you have a short-term rental and, God forbid, there's a fire or something there and there's a fatality, the city could be sued for not having inspected the property properly. So we just want to make sure that we do our due diligence, so that there are no lawsuits against the City of Buffalo that we could have stopped. We certainly don't want to use taxpayer dollars to pay for insurance problems in the future," Golombek said. "We just want to make sure that everything is done properly, that everything is inspected and vetted properly, and that people that come to Buffalo that go to an Airbnb or short-term rental are going to have a safe experience."
Other cities across the country have passed various legislation to combat this problem, and Golombek says the Common Council is still in the research phase of the process, when it comes to combating the issue in Buffalo.
Hunt feels the Council's assessment of the issues with short-term rental properties are not unfair.
"When you take a house that could have been rented to a family, let's say, or even an apartment and you turn it into a short-term rental, it's just one less opportunity for a family to find a good and safe place to live. That is the problem, and housing availability and affordability are two phenomenal problems in our economy today and in all communities," Hunt said. "Having said that, by limiting this, it just removes an economic opportunity for someone, or a group of people that otherwise would never have an opportunity like that to generate, what I would consider to be, a sizeable and warranted return."
From a real estate perspective, Hunt admits it's rarely known what people's real intentions are until after they acquire a property, and there's generally no follow up to find out, besides what they might put on a mortgage application. Hunt feels the anecdotal evidence is those people that are fortunate enough to be able to set up a quality Airbnb situation seem to be quite happy with it.
"We have a couple of clients that have purchased many of these, not just in the City of Buffalo, but in Ellicottville, for example, or other parts of our community where there's a demand for short-term rental situations, or relatively short-term rental situations, and the market supports it."
As from a property owner's standpoint, Hunt can understand if some feel frustrated by this moratorium because it could be viewed as a restraint of trade
"It's governmental influence that's limiting their opportunity," he said. "I know they'll be unhappy with this, as anybody would be if all of a sudden you said you couldn't do business as you thought you could, and that you had been able to do up until a certain point. It seems understandable that these people would be upset."
Under the resolution, the City of Buffalo will halt the issuance of Special Use Permits for short-term rentals in the Fillmore, North, and South Districts until the City of Buffalo, Department of Permit and Inspection Services, and the Buffalo Common Council can confirm that all existing and pending short-term rentals comply with updated regulations.
The moratorium will end on Dec. 31, 2023, which is when the Council expects new legislation as well as higher capacity to ensure all properties are in compliance.
While this moratorium will give the City of Buffalo a chance to catch up with the Special Use Permits for short-term rentals, Golombek does believe this might be extended for some time into the next calendar year, depending on where they are and what the Council's research shows.
"I'd rather be safe than sorry, in the long run," Golombek said.
How long could the moratorium extend beyond Dec. 31? While Hunt didn't give an exact timeline, he feels it's going to be very difficult to clean that up in a short period of time.
"What they're talking about is a lot of work," he said. "Regulations on Airbnbs are different all over the place, all over the country, so it's going to be very, very difficult for them to get a real handle on this in short order. I just don't see that happening."
The resolution, which was adopted at the Tuesday, Oct. 31 Buffalo Common Council meeting, was sent to the Buffalo Common Council Legislation Committee on Wednesday, Nov. 8 for further discussion.
The Council remains committed to working closely with city departments, county officials, and community stakeholders to find comprehensive and lasting solutions to the challenges posed by short-term rentals in the specific districts of Buffalo.