Just four or five years ago, most of us would never have thought Asbury Park, New Jersey would have such a problem, a need for vacation rentals.
Over the past 7 years, Asbury Park slowly turned the corner and has become a hot tourist destination. Be it for the beaches, it’s many venues for entertainment and restaurants – year-round.
So what’s the problem?
Most New Jersey towns have defined short-term rentals as any period under 30 days or permit rentals only twice per year with summer season usually from Memorial to Labor Day and winter season from Labor Day to Memorial Day.
All landlords in NJ are required to register with the state through their local municipality and typically pay a registration fee per unit (a Certificate of Occupancy and Inspection Fee) and may incur other fees such as from the local Fire Department for inspections who check for fire extinguishers, smoke/fire/co detectors and may check for other safety related issues.
The moment you exchange money (or barter) to “share” your home, room or tent – YOU ARE REALLY IN BUSINESS, like it or not. And I know – as both a “real” landlord renting homes in NJ year-round and as a “short-term” host in Fort Lauderdale Florida.
The City of Asbury Park is now faced with this “problem” it now has on it’s hands.
There is now a group of homeowners who have become “hosts” through one or more platforms (I will call them landlords) who do not want ANY regulation on their “shared” housing. They feel the city is looking to capitalize or take money out of their pockets and the city has no right to regulate “sharing”.
THE RESIDENTS / PROPERTY OWNERS AGAINST
Those property owners who do not rent their homes out and live in a residential neighborhood simply do not want “transients” next to them. In other words – they do not want the single family or multifamily home next to them becoming a hotel or vacation rental. There are may reasons – fear of noise, strangers, lack of parking and more. They want to live in a neighborhood of people they know by at least face.
The City of Asbury Park has been working on ways to work around and please everyone. To begin with, at LEAST, they want and have the right to, require all LANDLORDS (yes hosts, you are landlords) to register as required by the State and City and be subject to inspection as are all landlords.
The City is also proposing other measures including a tenant registry, a complaint process, parking regulations and a yearly fee.
The City also believes there are several groups or investors who have been buying property for the sole purpose of short-term rentals. Therefore, they are taking away “affordable” rental options or housing from others – driving up the prices as a whole While there may be some truth to that or not I don’t know.
There is NO mention of those profiting from a “regular” seasonal rental – from Memorial Day to Labor Day where rents can run now from $10,000 for a one-bedroom rental to over $20,000 and up for a home or condo for the summer season.
There is also another “problem” in Asbury Park – the prices on homes and condos have risen a bit faster then the surrounding areas. Here again, some older homes that may have been chopped up to 3 to 6 apartments are being purchased and either being returned to their former glory as a single family home or reduced number of units and either held as rentals (higher price) or converted to condos and again sold off.
The lead developer on the Oceanfront is IStar Financial who is carefully executing a redevelopment process of new housing through smaller condo projects. These are quickly being sold and some flipped after one or two years. The newest flip is on the market for $979,000. Other projects sold out during construction.
Again, I am looking at this from several advantage points
Landlord,Property Manager,Commercial Real Estate Agent
For over 30 years, I had to work with local municipalities , register units for each new tenant, pay the fees and report my income on the rentals. It’s a job being or representing a landlord.
Short-Term Rental “Host”
I am a “host” or landlord in Fort Lauderdale Florida. Shortly after I purchased the home (which was being used as short term or longer business), the City of Fort Lauderdale decided to act on their problem – the number of vacation rentals popping up in residential area.
Actions included – registration, inspection fee each unit ($900); increased insurance, smoke detector hardwire compliance; parking regulations, noise ordinance, complaint process and more. Luckily, I was prepared and make sure we comply. In addition The State of Florida requires a transient hotel license, the county a license as does the city a business license. Lastly, the State collects a 6% sales tax as does the county taking another 5% – of gross rental amount (including cleaning fees etc).
AirBnb likes to portray the business of renting, excuse me sharing, a “room” in your home is a way for the average person to earn a “few extra dollars”. While that may be very true – it’s also a way to increase revenues on a rental property by 50-70% or more depending on your area and the demand . An average rental property may be just earning a regular rent each month. But in a hot area, the property becomes more valuable as a source of revenue for the owner/investor.
So there a couple types of hosts – a) those that do not live in their home at all – and rent it on AirBnB full time b) those that live in the home and “share” one or more rooms to guests c) those that rent their home out for periods of time and do not live in the unit when it is rented/shared.
Asbury Park is growing up. Again. It was a resort town filled with Bed and Breakfasts, rooming houses, motels and hotels ever since it was founded.
Asbury Park should implement regulations on short-term rentals. It will protect the non-renting property owners (and residents who are renters), it will protect those renting short term and it will help make Asbury Park even more interesting to tourists.
The City should also look to earn some money from these new businesses/hosts much like many other towns across the country have. There is more or manage – inspections, record keeping and more. Either through the annual fee or implement a transient tax . For example in Florida, the tax is implemented on any rentals under 9 months. Given that some rentals are shown for $30,000 and up for a summer rental, the city will gain other sources of revenues. What’s nice is many of the platforms are now able to collect and remit the tax to the taxing authority – ensuring collections.
It’s working in Florida. For the “host” and the governing boards.
Congratulations to Asbury Park on their tourist problem!