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What will a Pa. Supreme Court decision mean for regulating sites like Airbnb?

Attorneys are hoping the state's panel of seven justices will give local governments across the state more feedback on how to better regulate short-term rentals.

An Airbnb bedroom in South Philadelphia. Philadelphia has crafted clear regulations around the home-sharing platform, stipulating that hosts can rent a property for as long as 180 days, among other rules.
An Airbnb bedroom in South Philadelphia. Philadelphia has crafted clear regulations around the home-sharing platform, stipulating that hosts can rent a property for as long as 180 days, among other rules.Read moreJESSICA GRIFFIN / Staff Photographer

It’s a question that cities and towns across the world have confronted in today’s sharing economy: Can single-family homes be used for short-term rentals, such as the ones on Airbnb or HomeAway?

A case before the Pennsylvania Supreme Court may soon offer clarity to homeowners who are still trying to figure that out.

On Wednesday, the state Supreme Court heard oral arguments in the case Slice of Life LLC vs. Hamilton Township Zoning Board, a four-year-old case that originated in the Poconos after a property owner was cited for operating a short-term rental out of a 1,200-square-foot home in the woods — an alleged violation of the local zoning code. Initiated by neighbors who complained about the property’s boisterous guests, the case has wound its way from the zoning board in Hamilton Township, Monroe County, to the state Supreme Court’s panel of seven justices, who are expected to rule sometime next year.

The complexity of the case thus far — a trial court sided with Hamilton, while the state’s Commonwealth Court with homeowner Val Kleyman and his business Slice of Life — underscores the confusion that local governments face in trying to regulate home-sharing platforms. Although some cities, such as Philadelphia, have created clear policies about how short-term rentals can operate, many others have struggled to adapt decades-old zoning codes to meet the ever-changing gig economy.

Some lawyers hope the Supreme Court’s decision could offer some clarity to municipalities.

In the Slice of Life case, the Supreme Court will attempt to decide whether Hamilton’s zoning code was clear enough in banning short-term rentals from operating out of single-family homes. When Hamilton Township’s zoning officer issued a citation in 2014, the homeowner was accused of operating a “hotel and/or other types of transient lodging” — an alleged violation of how single-family homes can be used.

Lawyers for Kleyman countered that he had “checked Hamilton’s zoning ordinance” and saw “nothing in the law” that “appeared to prohibit short-term rentals.” Specifically, one lawyer argued, the code did not define “transient tenancy” or “transient lodging" — making it unclear to homeowners who operated short-term rentals.

“A property owner should be able to read the ordinance and know what he can and can’t do with his property,” said Joshua Windham, a lawyer for the Institute for Justice, a nonprofit, libertarian law firm that filed an amicus curiae brief (meaning the group was not an initial party) on behalf of Slice of Life. “If a town wants to restrict property rights, you have to do so clearly."

Reached by phone, one township employee said the zoning code — written in 1985 and last updated in June 2013 — was not available online. Another employee said the ordinance, published in a “paper book," could be purchased for $25 in person.

Lawyers for the township and the township’s zoning board disagree with Windham’s argument. They argue that short-term rental properties such as Airbnbs are “incompatible with the single-family concept," according to documents filed in the case.

Slice of Life “owned what would be considered a single-family residential structure; however, they were using the structure, the township contends, as a lodging-type or tourist-home type of facility — even a hotel-motel-like facility, where they would rent out the premises on a weekend to anywhere between 10 to 20 people,” John Dunn, Hamilton’s solicitor, said in an interview.

According to court filings, Slice of Life’s property listed three bedrooms and advertised being able to sleep from 12 to 17 people.

After receiving the citation, Kleyman appealed. Hamilton’s zoning hearing board upheld the citation. After another appeal, the Monroe County Court of Common Pleas sided with the zoning board, too.

Last year, however, Commonwealth Court reversed the trial court’s decision in a 2-1 opinion, arguing that the zoning ordinance was ambiguous and should be interpreted in a homeowner’s favor. (Kleyman, in an interview, said he has since sold the property and is no longer a part of the case.)

Now, with the case in front of the state Supreme Court, lawyers are hoping the justices' decision will offer clarity to townships on how to regulate Airbnbs and other short-term rentals.

“When most municipalities drafted their zoning ordinances, the hosting of transient guests for profit was not anticipated as a potential use of a single-family home in a residentially zoned area,” Katherine Janocsko, a Pittsburgh-based lawyer at Tucker Arensberg, who focuses on real estate, among other areas, said in an email. “Based on the Supreme Court’s ruling, many townships and boroughs may want to amend their zoning ordinance ... to either encourage or limit homeowners from listing their single-family residential homes on Airbnb and other home-sharing websites."