Airbnb cover image

Airbnb has become a popular way for people to offset the costs they incur by owning a home in Tompkins County, especially when they feel overwhelmed by property taxes or otherwise. Using their home, or even just a single room in their home, as a short-term rental becomes an attractive option to alleviate some of that financial burden. Airbnb isn’t the only company that does what they do, there are others like VRBO, HomeAway, etc., but Airbnb has become the brand most closely associated with the issue. 

Home-sharing has become an increasingly common trend nationwide over the last several years, and that’s especially true for Ithaca. In fact, last year at around this time, Airbnb published its own internal figures that showed Ithaca as the third most frequently visited city in New York State during Memorial Day to Labor Day last year; in total, Ithaca saw almost 27,000 guest arrivals, over 700 hosts booking and those hosts raked in around $4.3 million during that time period. Others in the top five were larger, more established tourist spots, like NYC, Buffalo, Saratoga Springs and Niagara Falls. Countywide information is unavailable, as the company only released information on Ithaca. 

Parallel statistics weren’t available for 2019 for Ithaca stays, but figures provided by Airbnb do show that the trend appears to be continuing. In total, Tompkins County hosts saw 34,500 guest arrivals during the summer of 2019, collecting $5.9 million of income during the time period as a result. Both of those numbers nearly triple the next closest county in the Southern Tier of New York. 

The ballooning industry has been good news for some tourism entities. Tompkins County Tourism Planning Director Nick Helmholdt said thanks to a 2016 agreement between Tompkins County and Airbnb, the first of its kind in New York State, the county does collect room taxes from Airbnb stays, money that is paid directly by Airbnb. Similar agreements have not been established with other home-share providers. It’s impossible to tell exactly how much of the total room tax collected by the county stems from Airbnb, but the overall number has steadily increased from under $1.6 million in 2009 to a high of $2.9 million last year. Since 2017, the first full year that Airbnb was collecting and paying the room tax, revenue from that tax jumped $400,000 in one year and has outpaced its budgetary projections in 2017 and 2018 by nearly $200,000. 

Hotel tax rate trends

The bump in revenue is obvious after the 2016 agreement with Airbnb came into effect. 

Yet there are, of course, numerous opponents, coming from both commercial and residential viewpoints. Those with concerns over neighborhood deterioration are usually the most vocal detractors, regularly speaking out at community meetings regarding the topic. Their central claim usually stems from a fear that more and more people will foresake actual home ownership and occupancy in favor of utilizing the property as primarily or solely a rental entity. In theory, that would subsequently lead to less families permanently residing in the neighborhood, reducing its attractiveness. 

While that concern is valid but a tad vague, there are others that are more targeted. Some neighborhood residents fear parties thrown with the reckless abandon of someone who knows they aren’t responsible for the long-term feelings of the people living around them, as well as parking hazards from overcrowding a house. But there’s a connective tissue between all of these fears, which is a loss of familiarity with one’s surroundings, something that seems particularly impactful when it hits so close, literally, to home. 

Legislatively, opponents of short-term rentals have found their strongest ally in the Village of Cayuga Heights, led by Mayor Linda Woodard, where Airbnb and other services found a substantial foothold in the village’s high-income neighborhoods that are conveniently situated for visitors to Cornell University’s campus. Woodard headed the charge to implement the most restrictive short-term rental regulations in Tompkins County (and the first local municipality to put regulations of any kind on the books officially), and ones that she claims are the most stringent in the country. Home-share operators must apply (and pay fees) for a certification from the Village of Cayuga Heights, which is renewed yearly, and are limited to just 14 nights of unhosted renting with a maximum of 28 nights of hosted renting. 

Woodard said their laws were motivated by sentiments often echoed by opponents: that short-term rentals were reducing the long-term rental housing stock, particularly in a village where 20 percent of the properties, in Woodard’s estimation, have accessory apartments that have long been used as rentals for Cornell graduate students. 

“Instead of renting them out, people were taking them off the housing market and using them as short-term rentals,” Woodard said. “The other consideration was that Cayuga Heights is essentially a residential community [...] a B&B is a business. If you buy a house in Cayuga Heights, you do not expect to have a business next to you.”

Meanwhile, others see home-sharing and short-term rentals as an invaluable source of income in a county whose cost of living seems ever-rising. People can make, comfortably, thousands of dollars over the course of a year, and even just in a weekend (specifically, Cornell’s graduation weekend, which holds as Ithaca’s most popular time as a destination). There are also ways that using the properties, at least part time, as a source of income generation can enhance a house’s profile on the sales market, even if a buyer doesn’t intend to use the home for solely rental purposes. 

Home-share operators even mounted a petition early this year in opposition to the Town of Ithaca’s potential short-term rental regulations, which have yet to be formally proposed. Before its momentum waned, the petition gained over 400 signatures, with plenty of comments arguing that renting out their home or a room was the only way they were able to afford their taxes and utility bills. 

Larger hotels are feeling an impact from home-sharing platforms nationwide. Even hotels, though, don’t have an issue with the lakefront segment of the home-sharing market, said Teri Tarshus, the general manager of the Hilton Garden Inn on Seneca Street. On the lake, there is an acknowledged demand and need for short-term rental housing, since there are almost no other options for visitors who want to stay on the lake as hotel alternatives are mostly concentrated either in downtown Ithaca or farther out towards Lansing on Triphammer Road, with another 131-room Canopy by Hilton hotel set to come online in the coming months. 

Much like virtually everyone else, Tarshus said local hotels are keeping a close eye on the continuing Green Street Garage conversations and whether or not the project will include a conference center. That would obviously create a significant boon to any lodging business in the area, as the resulting center-based events would create additional, stable opportunities to house visitors, especially during the week. Tarshus said between 26-30 weekends in Ithaca per year are guaranteed sell-outs for local hotels, but weekdays and the remaining weekends can be difficult to fill. 

Hotels aren’t the only business entities that are being squeezed by Airbnb or its other home-sharing counterparts, and truthfully aren’t the ones facing the most severe threat from them. Instead, that falls on smaller bed-and-breakfast businesses, which have likely been operating for years before home-sharing swept in to dominate the industry. Helmholdt said the complaints his department often hears from those businesses is that the lack of regulations and safety criteria for short-term rentals through third-party companies like Airbnb put their businesses, which must meet stricter rules to stay in operation, at a competitive disadvantage. 

“There’s defintiely concerns that we don’t hear from residents, but from the lodging community, like the unequal application of regulations,” Helmholdt said. “An established bed and breakfast, for instance, might be subject to a different set of code requirements and business requirements that the short term rental properties are not. That ranges from everything from fire safety to food safety to making sure the building is accessible. We hear that consistently from our hospitality partners.”

Helmholdt also noted (and expressed surprise that New York State hasn’t intervened) that most Airbnb properties, at least the ones they monitor in Tompkins County, do not charge the standard eight percent sales tax that hotels or conventional bed-and-breakfasts must add to their final lodging prices for customers. Airbnb spokesperson Liz DeBold Fusco notes this is because they are statutorily not allowed to collect sales tax in New York State, though they claim they would like to be able to and legislation is pending on the topic. That’s a bit of an anomaly, even for an online business, as online retailers of a certain size, like the behemoth Amazon, must now add state sales tax to goods they ship to New York customers.  

Going forward, there are sure to be more legislative efforts to address short-term rentals, as it seems unlikely they will remain unchecked for much longer in municipalities throughout Tompkins County. Cayuga Heights may maintain its title as the most stringent, but it will be interesting to see how others will play out. The Town of Ithaca, which also sees a significant amount of rentals especially near Cornell, might present their final draft of a short-term rental law for public feedback later this month after years of discussions. Currently, according to STR Committee member Rich DePaolo, the town’s law would set a yearly limit of 29 days for unhosted rentals, meaning the homeowners are not on the property while it is being rented, but which would extend to 60 days for properties with certain setbacks and lot size requirements satisfied. He said the law does not apply to “conservation, agriculture or lakefront zones,” and also does not apply to hosted rentals. 

The Village of Lansing jump-started their own internal negotiations about regulations earlier this summer at the behest of the public, and City of Ithaca officials have recently started mentioning short-term rental regulation, so that process could begin before the end of the year.

(2) comments

Vijay Dandapani

Airbnb's payment of taxes is like getting the Mafia to pay sales tax on their "collections". Apart from the numerous negative externalities (excess garbage, crime - human trafficking and drugs are virtually undetectable in an Airbnb - and social disruption) there is a direct loss due to the delta in real property taxes a B&B pays and a homeowner. Further, municipalities lose out on construction activity from hotel development .

Richard Ballantyne

"Those with concerns over neighborhood deterioration are usually the most vocal detractors, regularly speaking out at community meetings regarding the topic."

Really? I haven't seen them at Town hall meetings where these kinds of laws are debated. I have see a lot of pissed off landlords at Town hall meetings who are tired of being regulated to death with threat of Jail if they don't comply with onerous, authoritarian, and intrusive laws that violate basic property rights like the laws being pushed by Rich DePaulo.

"Some neighborhood residents fear parties thrown with the reckless abandon of someone who knows they aren’t responsible for the long-term feelings of the people living around them."

Tough. If you don't like your neighbors, then move, or make friends with them and talk to them about your concerns like any reasonable person should do. Stop whining, start taking more responsibility. We already have noise ordinaces to protect people from noisy "parties." People need to just lighten up and not be so bothered by a few parties each month where neighbors are just trying to have a good time. How many complaints have actually been lodged in Ithaca where an AirBnB owner rented to people who hosted a really loud obnoxious party? Show me the data! Is pleasing a tiny vocal minority who are offended and bothered by anything and everything really worth restricting the property rights of everyone else? Are our local politicians really that clueless about the unintended consequences of their legislation? Ithaca is becoming a less and less competitive place to have a business. We need to repeal laws not pass them!

"Their central claim usually stems from a fear that more and more people will foresake actual home ownership and occupancy in favor of utilizing the property as primarily or solely a rental entity."

So what? It is their property! We need to respect the property rights of others. Let people do whatever the heck they want on their own property so long as they are not polluting your land or hurting you. And no, a loud party one night a month, or a bunch of cars parked on the side of the road, does not constitute hurting you, unless you are a pathetic weak antisocial snowflake that is easily offended and facts.

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