Calvey v. Town Bd. of N. Elba
| Decision Date | 25 March 2021 |
| Docket Number | 8:20-CV-711 (TJM/CFH) |
| Parties | DOUGLAS P. CALVEY, STEPHEN KYLE NORMAN, HUDA SCHEIDELMAN, CAROL TORRANCE HOFFMAN, and NEIL SULLIVAN, Plaintiffs, v. TOWN BOARD OF NORTH ELBA, TOWN OF NORTH ELBA, VILLAGE OF LAKE PLACID BOARD OF TRUSTEES, and VILLAGE OF LAKE PLACID, Defendants. |
| Court | U.S. District Court — Northern District of New York |
Before the Court is Defendants' motion to dismiss this case where Plaintiffs allege Defendants violated their constitutional rights by regulating short-term rentals of homes in the Lake Placid, New York area. See dkt. # 7. The parties have briefed the issues and the Court has determined to resolve the matter without oral argument.
Plaintiffs filed a Complaint in the Supreme Court of Essex County, New York. See Complaint ("Complt.") dkt. # 2. Defendants removed the case to this Court on June 26, 2020. See dkt. # 1.
Plaintiffs Douglas P. Calvey, Stephen Kyle Korman, Huda Sheidelman, Carol Torrance Hoffman, and Neil Schuman live in various parts of New York but own real property in Lake Placid, New York. Complt. at ¶¶ 1-5. Plaintiffs allege in their Complaint that the Village of Lake Placid and the Town of North Elba are resort communities, "known for hosting sporting events like the Winter Olympic Games in 1932 and 1980," as well as other athletic competitions and other outdoor events. Id. at ¶ 18. North Elba and Lake Placid also attract tourists "to participate in recreational activities such as downhill and cross-country skiing, ice skating, hockey, year-round hiking, cycling, swimming, fishing, and kayaking." Id. at ¶ 19. The area around the Defendant Village and Town has a history of hosting tourists that began in the nineteenth century, gained momentum with the 1930s, and continues today. Id. at ¶ 20-24. Plaintiffs allege that "[u]pon information and belief, during the last 100 years, short-term rentals of citizens' homes in the Lake Placid during times when the property owners were not using the same, have provided a supply of accommodations commensurate with that would or could not be met by local hotels." Id. at 23.
Plaintiffs allege that "significant demand" now exists for short term rentals. Id. at ¶ 25. The Lake Placid economy, they contend, "is driven by tourism." Id. at ¶ 26. As demand for short-term rentals in Lake Placid has increased, so has the num ber of citizens' homes offered to meet that demand. Id. at ¶ 27.
During the past decade, a number of internet-based home-sharing services such as Airbnb, homeaway.com, and vrbo.com have appeared. Id. at ¶ 28. These services permit "all manner of property owners to rent out their spare rooms or their whole homes to vacationers" in Lake Placid. Id. Services like Airbnb and Homeway allow "homeowners torent their homes to make money and help pay their mortgages and taxes to afford the vacation home that they could not otherwise afford." Id. at ¶ 29. This sort of sharing of one's home-"sometimes for money"-Plaintiffs allege, "is a long-standing American tradition." Id. at ¶ 30. Airbnb and other services are often less expensive and offer "a more unique experience" than a traditional hotel. Id. at ¶ 31. Persons who use Airbnb, Plaintiffs claim, can "[stay] in a traditional, residential neighborhood" and enjoy "more space including a kitchen for cooking[.]" Id. Short-term rentals booked through internet services "have grown dramatically more popular among travelers" in the past few years. Id. at ¶ 32. "U.S. Millennials" particularly make use of those services. Id. at ¶ 33.
Plaintiffs report that the Lake Placid short-term rental market contained 620 available rentals in December 2019. Id. at ¶ 34. The average number of days rented by any short-term property is 126. Id. at ¶ 35. Plaintiffs allege that "the median monthly revenue for short-term rental properties is $2,950 with an annual median revenue of $34,500." Id. at ¶ 36.
The Town of North Elba "encompasses" the Village of Lake Placid. Id. at ¶ 38. Together, the two municipalities "offer tourists shopping and dining experiences, cultural activities and festivals." Id. at ¶ 37. The population of Lake Placid and the Town of Elba together amounted to 8,957 persons in the 2010 census. Id. at ¶ 38. The two entities require tourism to support their economies. Id. at ¶ 39. Short-term rentals of homes provide "[o]ne of the principal ways" to accommodate tourists in Lake Placid and North Elba. Id. at ¶ 40.
Plaintiffs allege that the character of Lake Placid is shifting more towards a community or vacation and second homes. Id. at ¶ 41. The Plaintiffs point to a housingassessment of North Elba that indicates that the community has a "declining year-round population, fewer families, and fewer workers" who live "in the community." Id. at ¶ 42. The number of vacation and seasonal homes has increased at the same time, "with a greater number of residential property owners living out of town and out-of-state." Id. Plaintiffs contend that short-term rentals provide "as much as $32 million dollars of economic benefit" each year "to the Lake Placid region." Id. at ¶ 43. Such rental homes also provide North Elba, Lake Placid, and the County of Essex "hundreds of thousands" of dollars in yearly taxes, "employ local contractors, housekeepers, and other employees," and improve "the local real estate market for larger or older homes in need of renovation or those larger than most single family homeowners want to purchase." Id. A 2014 study of housing needs in the community showed increasing second-home ownership and increasing short-term rentals in the community. Id. at ¶¶ 44-45. The presence of such forms of use and ownership, the study found, "had the potential to exacerbate existing housing affordability and availability issues for the workforce, which" had to be "balanced with the positive benefits short-term rentals provide the community." Id. at ¶ 47.
In March, 2020, the Town Board of North Elba and the Village of Lake Placid passed local legislation amending their land use codes to address short-term rentals. Id. at ¶¶ 48-52. This legislation became effective on or about March 17, 2020. Id. at ¶ 50-52. The Defendants delayed enforcement of the short-term rental legislation to permit the Enforcement Officer to process applications and arrange for enforcement. Id. at ¶¶ 53-54.
Defendants allege that the short-term rental law states as its purpose "'to regulate the short-term rental dwelling units within the Village of Lake Placid and Town of North Elba and to establish comprehensive registration and licensing regulations'" to prevent"extensive short-term rentals that 'endanger' the historical and residential character of the 'resident resort community.'" Id. at ¶ 55. The law requires property owners to acquire a "revocable short-term rental permit" to use a "dwelling unit . . . for short-term rental purposes." Id. at ¶ 56. An owner must pay a fee for such a permit. Id. The law defines as short-term rental as:
A dwelling unit that is rented, in whole or in part, to any person or entity for a period less than 30 consecutive nights, and includes any residential building or apartment, single-or two-family dwelling, condominium, townhouse, guest house, cottage, cabin, or accessory dwelling which is rented as living quarters with a kitchen for any period less than 30 consecutive nights. This definition expressly includes [a] Rooming/Boarding house as that term is defined in Section 10.2 of the Village of Lake Placid/Town of North Elba Land Use Code. This definition excludes timeshare, hotels, bed and breakfast establishments and school or non-profit dormitories. "Rental" means an agreement granting use or possession of a residence, in whole or in part, to a person or group in exchange for consideration valued in money, good, labor, credits, or other valuable consideration. Use of a short-term rental by a record owner of a property shall not be considered to be a rental under this section.
A short-term rental property may not be rented more than ninety days in calendar year. Id. at ¶ 58. The law does not apply to:
The law also requires that "a copy of the short-term rental permit be online." Id. at ¶ 59. A copy of the permit is also available for public review in the Codes office. Id. Anothercopy of the permit must be "prominently displayed near the front entrance of" the rental property. Id. The rental permits must "state the names, addresses and phone numbers of every person or entity that has an ownership interest in the short-term rental property and of a primary contact person who shall be available to investigate complaints during the entire time (24 hours per day) the short-term rental property is being rented." Id. at ¶ 61.
The short-term rental law gives an Enforcement Officer or a person designated by the Officer a "right to inspect the short-term rental property to ensure it complies with" provisions of the local law titled "'Compliance, Hearings and Penalties,' at any reasonable time of day upon giving notice to the owner or occupant of said unit." Id. at ¶ 62. The short-term rental law provides penalties for violations of the statute, as follows:
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