With four million Airbnb listings worldwide, this rapidly growing short-term rental (STR) site and others like it have property owners, neighborhood groups, local government, and the real estate industry running in circles – and looking for a vacation spot. In the case of STRs, hosts are enjoying extra income and municipalities are keeping properties on the tax roll, while some nearby property owners are seeing a spike in their local rental rates or disruption to neighborhoods. In this post, the second in a two-post series (See “Regulating Short-Term Rentals,” by Jamie Strong), we discuss a case out of Lackawanna County decided this past December. The case of interest in this post was decided approximately six months after a case out of Monroe County – now on appeal to the Pennsylvania Supreme Court – was decided by the Commonwealth Court.

In Reihner v. City of Scranton Zoning Hearing Bd., 176 A.3d 396 (Pa. Commw. Ct. 2017), George and Judith Reihner (Reihners) were served a Notice of Violation (NOV) by the City of Scranton for allegedly running an illegal bed and breakfast from their home. As often is the case with STRs, the City issued the NOV after receiving complaints from neighbors. The Reihners had been renting the third floor of their Victorian mansion to generate additional income as hosts through Airbnb, but they never considered their arrangement a “bed and breakfast.” Accordingly, the Reihners appealed the NOV to the City’s Zoning Hearing Board (ZHB) where they argued their use was not a “bed and breakfast” as defined by the City’s Zoning Ordinance (Ordinance). The Ordinance’s definition of “bed and breakfast” concluded with: “…and which does not provide any cooking facilities or provision of meals for guests other than breakfast.” Based on the Ordinance’s definition, the Reihners contended their use could not be considered a “bed and breakfast” because they did not offer guests breakfast. The ZHB, however, upheld the NOV.

The Reihners appealed the ZHB’s decision to the Court of Common Pleas, which concluded the Reihners’ activities clearly met the Ordinance’s definition of “bed and breakfast” because the definition did not require that breakfast must be served. The Reihners appealed to the Commonwealth Court which ruled in favor of the couple on multiple grounds. The Commonwealth Court found the Ordinance’s definition of “bed and breakfast” to be unclear and ambiguous. The Court reminded municipalities that when an ordinance is ambiguous, the ordinance must be interpreted in favor of the landowner and in favor of the least restrictive use of the property. Additionally, the Court cited the Statutory Construction Act of 1972, which provides that “[w]ords and phrases shall be construed according to rules of grammar and according to their common and approved usage.” Consequently, given that the definition of the term uses the exact words “bed and breakfast,” providing a bed without breakfast cannot be a “bed and breakfast.” The Reihners maintained breakfast was never offered or served, so the Court held the ZHB abused its discretion by narrowing the terms of the Ordinance and further restricting the use of the Reihners’ property. Accordingly, the NOV was overturned.

Cases like this and those discussed in our prior post are popping up more and more, setting the stage for battles across the Commonwealth. As seen in these cases, antiquated ordinances and ambiguous language in them are often the greatest hurdles for municipalities attempting to determine how a new use, such as an STR, should be treated. Further, what works for one municipality may not work for another. In the absence of clear regulations, STR-related uses – and numerous other newer uses such as craft breweries and marijuana dispensaries – are being shoe-horned into out of date ordinances, leaving all involved struggling to find the right fit. By analyzing pros and cons, seeking community input, and monitoring data and trends, mutually-agreeable language and definitions can be put into place. Indeed, in an entrepreneurial world where new uses are being created almost daily, it is imperative that municipalities stay on top of land use ordinances to ensure such ordinances appropriately account for new and significant uses because failing to do so leads to discord in the community and potential litigation.

Please feel free to contact any member of the McNees Wallace & Nurick Land Use Group for assistance with any land use or development issues and/or if you have any questions regarding this post.