SARANAC LAKE — The Saranac Lake village board has some decisions to make about short-term vacation rentals as it enters “phase two” of the STR law it passed last year.

Coming up, the board is scheduling decisions on whether or not to extend its STR moratorium, how to cap the number of STRs in the village, how to hear exemptions to both the moratorium and cap rules and enforcement of the law on non-compliant units.

All 85 STR properties representing 116 units, which were operating before the law passed, have been granted preexisting licenses, allowing them to continue uninterrupted before stricter residency requirements and maximum permit caps take effect.

Preexisting STRs are currently being asked to renew their licenses. The window for these renewals opened on Nov. 1 and lasts through Jan. 31. Community Development Director Katrina Glynn said the renewals are like simplified applications.

The village has had a moratorium on creating new STR permits since last year, capping the number of STRs in town to the 116 units currently here. This moratorium is scheduled to expire on Dec. 31.

The village board will hold a public hearing on potentially extending the moratorium at 5:30 p.m. on Nov. 11 in the village board room on the second floor of the town hall.

Members of the village board have discussed potentially extending the moratorium.

After the moratorium ends, the village will cap the number of STRs in the village. Any caps on new STR permits will be set by each zoning district in the village, and reevaluated annually. But the metric used for setting caps in each zoning district is still to be determined.

To give themselves more time to determine where these caps will be set, village board members are considering extending the moratorium. This extension could be lifted at any time.

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Exemptions

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The village can grant exemptions to the moratorium in certain cases, such as if an STR applicant is planning new construction or a major rehabilitation of a derelict building for their planned units. But the law leaves cases for exemptions open for interpretation. The only cases mentioned specifically in the “such as” clause are the two above. The board has also discussed financial hardship as being a potential reason for exemption.

Exemptions are granted by the village board, but an exemption is not an automatic approval of the STR. It just allows the STR application to be heard by the development board, which has its own, separate criteria for approving projects.

Glynn said the village has received four exemption requests so far. She said the board should get to them soon.

Some of the locals seeking exemption have been showing up to village board meetings to make their requests in person, saying they’ve been making investments in their properties under the assumption that the exemptions to the moratorium would be open soon.

“We have moratorium exemptions that are looking to be processed, and we don’t have a process in place yet for that,” Glynn said, noting that the law was passed around 18 months ago.

She has a draft exemption request form., which says applicants should send their requests to the village clerk. Then the request would be sent to the board, which would set a public hearing. Then the board would grant or decline the request based on their judgement of the case.

Trustee Aurora White suggested doing these exemption requests in executive session because applicants may be talking about sensitive topics like finances and health. Mayor Jimmy Williams said they’ll likely start in open session and move into executive session if they need to discuss private issues.

White felt the board needs criteria for exemption, to avoid any appearance of favoritism. She said they should define some of the key terms better, to avoid misinterpretation. Williams said they can use their judgement; that’s what the development board does and how Lake Placid offers its exemptions to its STR law.

Development Board Chair Allie Pelletieri suggested the village board set some criteria to guide them, while leaving them open to be flexible. Williams wants a focus on doing “what makes sense” instead of following a rubric.

Glynn felt setting too much criteria would be the village board putting a lot of work on themselves. On the development board, she said it is up to the applicant to pitch their proposal.

Trustee Kelly Brunette felt the moratorium contradicts itself by having exemptions. She wondered if it betrays the true meaning of a moratorium. Williams said the process is in the law and has been promised to potential applicants.

Trustee Sean Ryan said he wants to extend the moratorium. He said they should not take setting the caps lightly and wants to give them time to figure it out.

Glynn suggested the village let the moratorium run out and add one more allowable unit per district, across the board. Later, though, she added that she does not have any real preference for what the village board does. She said whatever they decide, she’ll carry it out. Capping the number of STRs in the village is going to get here eventually, she said, adding that she’d like to see it happen sooner rather than later.

Glynn said STRs probably don’t have the same steam they once did, so she’s not sure how much of a rush there would be on new permits. There will be fees for obtaining an STR permit, with sharply increasing rates for larger and larger operations — ranging from $25 to $1,600.

After caps are instituted, Glynn said further applications for STR permits will be on a first-come, first-served basis, per district. If someone with a license doesn’t renew their permit, the village board could then refill that slot. Or, the caps could be lower than current number of STRs in each district and when one isn’t renewed, it isn’t refilled. These decisions can be made on individual districts to control things like density and neighborhood character.

Glynn said only 18 of the 35 districts have an STR currently, so those 85 existing STR properties are clustered.

Board members discussed possibly holding a public input session on setting caps in the near future.

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Unlicensed

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Over the summer, Glynn produced a report which found that there around 27 active, unlicensed STRs — though these units may not all be violating the law.

At this time, anyone renting out a property as an STR without one of those preexisting permits would be in violation of the village law and subject to fines — $500 per day of violation.

Glynn clarified that an “active” unit might not actually be renting stays and violating the law. It could just have a profile on an STR platform but have no open bookings at this time. The village doesn’t know which, if any, active STRs are violating the law, though.

She has not yet determined if these 27 unlicensed units are active or not, but she has a plan that can put into place whenever the board directs her. She would send letters to the owners of these properties, give them a time frame to remove the listings and start issuing fines if they do not.

Until now, the village has not focused much on finding violating STRs and enforcing the law on them. Now that all the preexisting units have been issued permits, village officials say it is time to start investigating any violations and enforcing the law.

They also found 47 unlicensed but dormant STRs. These are units that were previously listed on a rental platform but not currently available to rent.

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Cool down

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Glynn said the “true purpose” of the law has already worked — stopping people living outside the village from buying up property as rental investment properties.

One of the big differences between preexisting permits and new permits is the residency requirement. Applicants for new permits will need to be village residents, or at least have an LLC with 25% local ownership.

In June, Glynn told the Enterprise she’s noticed this clause has caused a chilling effect on the speculation of land for STRs in the village. Glynn said when she gets calls from realtors with clients looking to buy homes in Saranac Lake to rent as STRs, after she tells them about the residency requirement, they tell her their clients aren’t interested anymore.

The passage of the village law in June 2023 came just a couple of months after the vacation rental and management company Evolve named Saranac Lake the best place in the nation to buy a lakefront investment property in 2023.

This concerned village leaders, especially in light of the shortage of affordable housing in the region.

Another thing the STR permitting process has done is ensure every STR is registered with Franklin and Essex counties so they can collect occupancy taxes. Every STR in these counties is required to be registered with the county, so it can collect a 5% occupancy tax on each rental stay. Franklin County officials said they’d seen a “significant increase” in revenue from STR registrations in Saranac Lake since the process began.

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Data

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Glynn’s report also found that the majority of STRs in the village are second homes, that half of these second home STRs are owned by Saranac Lake residents, and that STRs make up approximately 5.3% of the village’s residential housing stock. Williams said that 5.3% figure is probably slightly off because the former Trudeau Sanatorium property has not been subdivided yet and is one parcel. It has one STR and several long-term rentals, he said.

There are a total of 1,527 residential properties in Saranac Lake, according to Glynn.

A property can have more than one unit on it. An STR unit can have more than one bedroom.

Glynn said 91 applications for preexisting STRs were submitted and 85 applications were reviewed because six of the applicants withdrew. The development board processed 116 STR units representing 254 bedrooms for a maximum total of 606 occupants.

Multiple properties in the village have more than one STR on the property — 56 of STR owners have one unit, 15 have two units, three have five units and three have four to six units.

Glynn’s study found that 30 of the STR properties in the village are a primary residence — around 25% of them — and 86 of the properties are a secondary or investment property — around 75% of them.

Of the secondary and investment properties, 44 — around 50%- are owned by Saranac Lake residents, 22 — around 25% — are owned by New York state residents and 20 — around 25% — are owned by out-of-state residents.

Of the 35 village districts, 18 have at least one STR unit. Zone K-2, which includes the Kiwassa Road area around Lake Flower, was issued the most units — 20 units representing 45 bedrooms or 120 maximum occupants.