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LOCAL LAW PROHIBITING SHORT-TERM RENTAL OF PROPERTIES WHERE THE OWNER DOES NOT RESIDE IS NOT UNCONSTITUTIONAL AS A REGULATORY TAKING (FOURTH DEPT).

The Fourth Department determined plaintiff’s constitutional attack on a Local Law which prohibited short-term rental of properties where the owner did not reside did not constitute a regulatory taking of the property:

In 2012, petitioner-plaintiff (plaintiff) purchased a single-family residence (subject premises) located in respondent-defendant Town of Grand Island (Town) for the purpose of renting it out on a short-term basis, i.e., for periods of less than 30 days. Plaintiff never resided at the subject premises. In 2015, the Town enacted Local Law 9 of 2015 (Local Law 9), which amended the Town Zoning Code to prohibit short-term rentals in certain zoning districts, except where the owner also resided on the premises. The Town enacted the law in response to significant adverse impacts to the community that it found were caused by permitting short-term rental of residential properties to occur. Local Law 9 contained a one-year amortization period—which could be extended up to three times upon application—during which preexisting short-term rental properties could cease operation. * * *

… [P]laintiff did not submit evidence establishing that, due to the prohibition under Local Law 9 on short-term rentals, the subject premises was not capable of producing a reasonable return on his investment or that it was not adaptable to other suitable private use. Instead, plaintiff’s submissions showed a “mere diminution in the value of the property, . . . [which] is insufficient to demonstrate a [regulatory] taking” … . Matter of Wallace v Town of Grand Is., 2020 NY Slip Op 03301, Fourth Dept 6-12-20

 

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