Bought a house - the city won't let me use it for STR

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Bought a house - the city won't let me use it for STR

Aaron Williams
Member since 2019 · 12 posts · 5 votes

I bought a house in a small college town with a severe lack of hotel capacity. I planned on using the house from time to time myself, then letting friends and family use it for free, and then renting it as an STR when otherwise vacant. The city asked me to apply for a conditional use permit and meet with the city zoning board. They explained it would be a rubber stamp and probably take all of 15 minutes. 2 hours later- and after a bunch of people appeared and spoke out against STRs and also claimed out-of-towners keep buying all the good property (mine was on the market for 168 days) my appeal was rejected. It was a horrible experience. Not sure what to do now.

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Carolyn Fuller
Cambridge, MA · Member since 2015 · 651 posts · 736 votes
3y

For whatever it is worth, many colleges and universities have visiting scholars who want fully furnished homes for over 30 days. You can advertise on SabbaticalHomes.

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  • Kevin Sobilo
    Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
    3y

    @Aaron Williams, if you are really vested in the STR plan I would consult with a good local real estate lawyer. There is certainly an appeals process. Whether there are sufficient grounds for an appeal only a lawyer could tell you.

    For example, is STR is a legitimate conditional use and nobody raised any specific concerns about your property specifically and only about an aversion to STR in general then in fact there were no specific objections to your property as a short term rental. So, at minimum an explanation of the decision would seem appropriate.

    I would investigate other suitable options. What about a mid-term rental solution? Are there any uses where the rental could be rented out for 30+ days and still suit your personal needs. For example, renting to traveling nurses for a few months per year. 

    1Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    We will look into the 30+ idea. I hadn't thought of that and I don't know what the market dynamics look like for that yet. Thank you! The big concern the board and the protesters had was around non-owner-occupied. They are perfectly fine with owner-occupied AirBnBs but 100% again non-owner-occupied. We are definitely talking to a lawyer. 

    1Reply
  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    3y

    Great answer and suggestions from @Kevin Sobilo, but this should have also been part of your due diligence prior to buying the property. 

    Does STR use conform to zoning for the parcel? This should have been one of the first questions asked before going under contract if this was your plan for the property. 

    If it does (and sounds like perhaps it does as a conditional use - based on what conditions?), then it's more of a permitting issue and there are usually ways to navigate the red tape, as noted above. 

    Copeland Morgan LLC4.770 Reviews
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    2Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    Jeff - you are 100% correct. It's on me. I researched all the existing available STRs. There are several of various sizes and locations around the town. There is one literally next door. Based on that, I incorrectly assumed that was a market suitable for purchase. 

    0Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    Also - I did meet with the city in advance. They told me all I had to do was fill out the conditional use form and attend a meeting. They explained that they do these all the time and it's basically a rubber stamp. Clearly, the clerk didn't understand the nuance between STR and LTR.

    0Reply
  • Carolyn Fuller
    Cambridge, MA · Member since 2015 · 651 posts · 736 votes
    3y

    For whatever it is worth, many colleges and universities have visiting scholars who want fully furnished homes for over 30 days. You can advertise on SabbaticalHomes.

    4Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    GREAT Idea Carolyn! Thank you!

    0Reply
  • David Bergmann
    Property Manager · Columbia, SC · Member since 2017 · 121 posts · 163 votes
    3y

    What is the city going to do if they find out you are doing stays less than 30 days?  How will they know the duration of your reservations?  Just curious what the repercussions would be... if the penalties are not high, I would consider them a potential risk and cost of doing business should the city discover you are renting less than 30 days.

    2Reply
  • Trent Reeve
    Atlanta · Member since 2022 · 712 posts · 642 votes
    3y
    Quote from @David Bergmann:

    What is the city going to do if they find out you are doing stays less than 30 days?  How will they know the duration of your reservations?  Just curious what the repercussions would be... if the penalties are not high, I would consider them a potential risk and cost of doing business should the city discover you are renting less than 30 days.


     well, he didnt get a permit, so there is extra trouble running a "business" without a permit

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Yeah, @Aaron Williams, don't listen to @David Bergmann. That is breaking the law and you know it. Don't be "that" guy.

    I am wondering if having a STR right next door is part of the problem. A lot of municipalities with this kind of conditional use permit won't approve if the density of STRs in a particular area is above a certain threshold. It often isn't something that is in a statute but just an unwritten policy.

    I guess you need to decide how much you want to spend. I can't imagine it being less than 5k just to start. Check and see if there is a appeal process.

    What you could also do is look at student housing. You didn't say where the house is, but I would check with the school and see what the need is like for off campus housing. It would negate the personal use, but it would provide a steady income stream above normal LTR rates as you charge per room. See what the market is like.

    I will say that your maintenance will be higher and the damage caused by some students could be more than a normal tenant, but...there ya go!

    2Reply
  • Luka Milicevic
    Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
    3y
    Quote from @Aaron Williams:

    I bought a house in a small college town with a severe lack of hotel capacity. I planned on using the house from time to time myself, then letting friends and family use it for free, and then renting it as an STR when otherwise vacant. The city asked me to apply for a conditional use permit and meet with the city zoning board. They explained it would be a rubber stamp and probably take all of 15 minutes. 2 hours later- and after a bunch of people appeared and spoke out against STRs and also claimed out-of-towners keep buying all the good property (mine was on the market for 168 days) my appeal was rejected. It was a horrible experience. Not sure what to do now.


    So the city told you BEFORE purchasing the property you can do an STR? Then after you closed they denied you a permit?

    Do you have anything in writing? 

    My guess is you can appeal, but that is going to take a lot of time and money and has no guarantee. 

    I had something similair happen to me a few years ago where I got my permit issued the DAY before an STR ban was made for my property type.

    Ultimately, worst case is you can make it into a medium term rental so it doesn't fall under STR regs.

    1Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    There is an appeal process and we are in the midst of it now. I don't really want to consider LTR for a few reasons. 1) We intend to use the house too, 2) we are going high-end on the furnishings and 3) it's too far and would be WAY too expensive for students. I could do monthly but I'm hopeful we can work out a way to STR.

    0Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    Luka - nothing in writing. It was all verbal face-to-face with the clerk at the zoning office and their inspection officer. He was nice enough to do a "pre-inspection" to tell me what needed to be addressed before the actual inspection. He said the exact same things the clerk said. There is a bill flying through the state government now that would basically overall all the municipalities that prevent STRS. They would still have capacity regulations, noise standards etc...but basically give people the right to do what they want with their own homes. It's almost done in the house or reps, then the senate, then the governor. All of those entities are republican and they are behind the bill. Just might take a year to get done. Other states are doing the same thing, so I'm sure the law firm will use that too. 

    0Reply
  • Brooklyn McCarty
    Investor · Member since 2022 · 1k+ posts · 754 votes
    3y

    If you’re in a college town, turn it into a college rental. 

    0Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    Thanks, Brooklyn - that's really not an option in this location. I'm in it for the college kid's parents, not the kids. The LTR market for students is very well defined and my location is optimal for that. 

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    3y

    Can you use it as a LTR?

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    3y

    Tell us the #'s. Maybe a LTR will work, and you can move. Do you have equity? You could also sell if it's too much of a headache.

    0Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    Bought at $330K, I financed as an investment property, not a 2nd home so the rate is high (7.5%). I have been straight up with everybody and completely transparent. LTR is worst-case scenario, MTR is interesting, and STR is what I really want. The law firm is hired and it's one the biggest firm in the US with experts on zoning and AirBnB's. I'm gonna see how things play out. The firm thinks there are multiple pathways to victory here, if those fail, we'll look at plan B, C etc... We are fortunate in that we can cover the expenses pretty easily if it doesn't rent. I'm just trying to do it the right way first and completely transparently. I will keep folks posted.

    Also, I'm intentionally not posting the exact place until all this stuff is settled. 

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y

    What about traveling nurses or visiting scholars?

    1Reply
  • Evan O'Brien
    Sayville, NY · Member since 2021 · 126 posts · 34 votes
    3y

    @Aaron Williams does the town you bought the property in have a large amount of college students or are there any hospitals or healthcare centers local to the area? You could try pursuing renting it out to college students during the school year or use it as a medium term rental for traveling nurses/healthcare professionals. Wishing you the best of luck I’m sorry to hear that your appeal got rejected.

    0Reply
  • Patricia Drew
    Member since 2020 · 25 posts · 20 votes
    3y
    Quote from @David Bergmann:

    What is the city going to do if they find out you are doing stays less than 30 days?  How will they know the duration of your reservations?  Just curious what the repercussions would be... if the penalties are not high, I would consider them a potential risk and cost of doing business should the city discover you are renting less than 30 days.

    Neighbors who don't want an STR next door were probably among those who attended the zoning board meeting. New faces arriving with suitcases every few days are hard to miss, and you can be sure they will call code enforcement.

    Cities large and small have also wised up and are hiring companies to find illegal listings and to make sure that legal listings are paying city taxes on STRs.

    "These companies sleuth out identifying data on rentals — even though addresses and full host names are not generally provided in short-term rental listings. Using special software, the companies use short-term rental listings and other public records to identify short-term rental addresses and owners. These are then matched up with a city’s records to see which rentals are out of compliance or whether operators are dodging tax obligations."

    And call me crazy, but I follow local zoning laws and expect others to do the same.  Don't like the law?  Vote out those who support it so that it can be changed. But then you'd have to live there to vote.

    2Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y

    you involved an army of lawyer but have you check how many airbnb renters really in that house/neighborhood? Most Airbnbs are the owner living in the unit. I'm afraid this is one of the case that a lose-lose-game due to no-DD-prior-to-buy.

    0Reply
  • Aaron Williams
    OP
    Member since 2019 · 12 posts · 5 votes
    3y

    Thanks, Patricia - the city claims to have software that crawls the booking sites so they can enforce the policy. Although at the hearing, one of the protesters asked when the zone enforcement teams were active and were answered by saying 9-5 M thru F. They didn't feel they were enforcing capacity restrictions and monitors noise from parties since nobody is working on a Sat night. I'm not looking for anything sneaky or outside of the code. I just want to offset some of my costs by offering a great house with beautiful furnishings when we are not using it ourselves. 

    Carlos, you could be 100% correct. 

    1Reply
  • Wes M.Pro Member
    Rental Property Investor · Southeastern, NC · Member since 2018 · 163 posts · 146 votes
    3y

    @Aaron Williams

    @Aaron Williams

    0Reply
  • Jay ThomasPro Member
    Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
    3y

    It's understandable that the board and protesters have concerns around non-owner-occupied Real Estate being used as AirBnBs. It is an important factor to consider before implementing a policy like the 30+ idea. We definitely recommend talking to a lawyer who can advise on the legal implications of this type of Real Estate use in your area so that you can make an informed decision. It is great that the board and protesters are open to owner-occupied AirBnBs, but it will be important to also consider potential impacts from non-owner occupancy on Real Estate markets.

    [email protected]832-889-5607
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