A lawsuit brought against the town of North Elba and the village of Lake Placid by a group of short-term vacation rental owners, which sought to void the municipalities’ short-term rental regulations on the basis that they “violated” the property owners’ rights, has been dismissed. The short-term renters agreed to dismiss their lawsuit.

The lawsuit, which lasted for more than a year, “handcuffed” the town and village, hindering lawmakers’ ability to make major amendments to local short-term rental laws, according to Village Mayor Art Devlin. Now that the lawsuit has ended, the town and village are considering their next steps in regulating short-term vacation rentals.

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The lawsuit

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The lawsuit was filed in June 2020 by Doug Calvey, Carol Hoffman, Huda Scheidelman, Neil Sullivan and Stephen Norman, who owned short-term rentals in the area, according to federal court documents. The lawsuit was filed about three months after the village and town established a joint short-term rental law in March 2020. The lawsuit outlined 13 complaints against the law.

The short-term renters alleged that the law violated their right to equal protection; violated their right to be free of “unreasonable search and seizure” by allowing the code enforcement officer to inspect the property without warrant or reason; violated their right to “due process” by instating a 90-day cap on renting, requiring property owners to gain a permit for short-term renting, allowing the code enforcement officer to “unilaterally” impose conditions when issuing a short-term rental permit, among other claims of due process; and that the law was unconstitutional and violated their first amendment rights.

The town and village attempted to dismiss the lawsuit in federal court, and all but three reasons for legal action were dismissed, according to the federal court ruling. One of the remaining complaints was against the code enforcement officer’s ability to conduct inspections on short term rentals at any time.

Former Town Attorney Ron Briggs said the town and village have since amended that aspect of the short term rental law. It now requires the code enforcement officer to get permission from the short-term rental owner before an inspection. The other two complaints would have required the property owners to prove their claim of financial loss due to the short-term rental law — an extensive and expensive process, according to Briggs. He said that’s probably why the short-term rental owners consented to drop the case.

Doug Hoffman declined to comment. The other short-term rental owners involved in the lawsuit could not be reached by press time on Friday.

The lawsuit was finally dismissed on a “stipulation of discontinuance with prejudices.” That means that the plaintiffs who initiated the case agreed to discontinue their lawsuit against the town and village and that they can’t raise the lawsuit again in the future, Briggs said.

The town and village operate under a joint land use code. Because of that, both municipalities had to work together to create a joint short-term rental law. That was why the lawsuit affected both municipalities. Town Supervisor Derek Doty said that more than a year ago, the town and village amended their joint land use code; now, the village and town can take separate actions when adjusting short term rental laws.

Now that the lawsuit has been lifted, town and village boards can begin making adjustments to local short-term rental laws.

Town Councilor Emily Kilburn Politi said Friday that a subcommittee of the Lake Placid-North Elba Community Development Commission, which is dedicated to assessing the town and village’s joint land use code, has made recommendations for zoning amendments related to short-term rentals. Kilburn Politi said that the town and village boards, and the community, will hear about those recommendations soon.

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Looking ahead

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The North Elba Town Council re-opened discussion on its short-term rental law during its Tuesday meeting, when Doty asked councilors to begin considering the direction they wanted to go with the law.

Doty said Thursday that it was hard to adopt the initial joint short-term rental law because there “were always differences in the town and village” when it came to short-term vacation rentals. Doty has said several times in the past that short-term rentals pose more of a problem within village boundaries than in the town outside of the village. He said he supports the village’s desire to preserve its neighborhoods for long-term residents, and he anticipates that the town council will collaborate with the village board when it comes to regulating rentals in neighborhoods located in the town, next to village neighborhoods.

Newly-elected Town Councilor Jason Leon, who is also finishing his more than 12-year stint with the village Board of Trustees this year while on the town council, said he wants to see swift action on short-term rentals from both boards. He said he’d like to see the boards form their recommendations on the laws in about a month, and he believes the process should be a transparent one that involves public input. From Leon’s perspective, many people in the town and village see short-term rentals as a spreading “cancer” in the community.

Leon believes that both the town and village should keep short-term rentals out of residential areas. He thinks the original joint short-term rental law wasn’t strict enough when regulating the number of days a hosted short-term rental can be rented each year, among other things, and he’s ready to advocate for more strict regulations on the rentals as a way to address what he sees as their impact on the community — namely, the lack of housing for locals and inflated housing prices that make it difficult for locals to invest in the area.

“(Short-term rentals) have completely wrecked our community, robbed it of its character,” he said. “I think that both boards should be more strategic and more aggressive and more transparent when we re-approach this … (Our community is) already on the cusp of being transformed forever without any opportunity to ever backtrack.”

Leon said that new affordable housing developments are nice, but that “it’s just a piece of the puzzle” if short-term rentals aren’t addressed. There’s only so much land to develop, he said.

Devlin said Thursday that the village board would likely put together its short-term rental law amendments in the next month. He said the board had changes in mind in 2020, before the lawsuit began, and was poised to hold public hearings on the measures – mainly protecting neighborhoods – when the lawsuit stopped the board from implementing those changes.

Devlin said that adding the concept of “protected neighborhoods” to the village’s short-term rental law would forbid short-term rentals in certain residential areas, listing Greenwood Street and Johnson Avenue as hypothetical examples.

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Correction: An earlier version of this story incorrectly said the short term rental owners’ lawsuit was dismissed by a judge; the owners agreed to discontinue their lawsuit. The Enterprise regrets the error.