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Lake Placid grapples with Airbnb ‘infiltration’

Lake Placid grapples with Airbnb ‘infiltration’

Vacation rentals are dramatically altering the landscape of an iconic Adirondack town
Lake Placid grapples with Airbnb ‘infiltration’
Houses along Hillcrest Ave in Lake Placid on Tuesday, February 11, 2020.
Photographer: Erica Miller/Staff Photographer

On a hill overlooking downtown’s main drag, Karen Huttlinger steered her SUV down Hillcrest Avenue, pointing out the short-term rental units that have proliferated throughout the neighborhood. 

From their home on Marcy Road, a pocket of well-kept residences tucked into the natural landscape, Karen and John Huttlinger can see 10 houses. 

Once occupied by families, all but three have been converted to vacation rental units by owners seeking to capitalize on Lake Placid’s sizzling tourism industry.

“It’s brought creeping gentrification to what used to be nice, working-class neighborhoods,” Karen Huttlinger said. 

John Huttlinger grew up in the neighborhood and used to know who lived in each house. 

“Now they’re dark all the time,” he said. 

Except summertime. And with the revolving door of vacationers seeking fresh mountain air comes disruptions that have reached a fever pitch.

PETE DEMOLA/STAFF REPORTER
Karen Huttlinger lives in Lake Placid's Hillcrest neighborhood, the epicenter of the village's online rental market. PETE DEMOLA/STAFF REPORTER
Karen Huttlinger lives in Lake Placid's Hillcrest neighborhood, the epicenter of the village's online rental market.

While “party houses” crammed with rugby teams, bachelor parties and drunk tourists have been problematic, even the most mild-mannered guests have brought their own set of inextricable problems.

Parking issues, congestion and noise complaints are chronic. 

“This is an issue that snuck up on everybody,” Karen Huttlinger said.

There are at least 694 active short-term rental properties in Lake Placid, according to AirDNA, an online aggregator that tracks data from vacation rental websites Airbnb and Vrbo. 

Since Airbnb was founded in 2008, rentals have exploded nationwide as travel preferences have shifted, with many younger travelers and athletic teams preferring more customized experiences over conventional hotels. 

The practice of locals renting rooms to travelers is as old as the Adirondack tourist industry itself. But in Lake Placid, the growth has been astronomical: Peak rentals last summer were 40 percent greater than in 2017. 

The technology has been a blessing for residents seeking to bolster their income during the sluggish shoulder seasons, converting unused space into lucrative real estate (the average daily rate in Lake Placid is $376) that helps pay their property taxes and mortgages.

But with the transformation, Lake Placid is joining the ranks of resort towns like Vail, Colorado; and Lake Tahoe, Nevada, that are wrestling with an existential question: Will the community continue to be a place where people live and raise their children, or will entire neighborhoods be lost to a revolving door of partygoers and absentee landlords?

Also online: As Lake Placid celebrates 40th anniversary of Winter Olympics, community faces a housing crisis

For the past two years, public meetings to discuss regulating the short-term industry have drawn hundreds of residents, business owners and community stakeholders. 

Throughout the process, speakers have focused “not so much on nuances of the law but more on the identity of Lake Placid,” reported the Adirondack Daily Enterprise.  

“Whether we’re at the crest or not, people in Lake Placid feel like they are,” said Peter Crowley, the newspaper’s managing editor. 

MULTIPLE BATTLEFIELDS 

As Lake Placid celebrates the 40th anniversary of 1980 Winter Olympic Games — a torch-run featuring former Olympians ignited the 11-day event on Friday — the pitched battle over how to regulate the industry belies a thornier set of issues:

Property values are skyrocketing, school enrollment is declining, and there’s been a steady exodus of families and workers from the community, threatening the viability of the school district and kneecapping the downtown businesses who depend on a reliable workforce. 

A report released last month by a joint town-village housing commission said the community is facing a workforce housing “crisis.” 

Is the short-term rental industry to blame? 

Interviews with over a dozen local business owners and residents pointed at online rentals as the prime culprit because they believe outside investors are snapping up homes and rental properties, and converting them to short-term rental units, which is far more lucrative than monthly rentals. 

Officials, however, haven’t flagged a smoking gun because the properties are unregulated, depriving them of a critical data set. 

ERICA MILLER/STAFF PHOTOGRAPHER  
Entrance to Lake Placid Olympic Sports Complex off Route 73 in Lake Placid on Tuesday, February 11, 2020.ERICA MILLER/STAFF PHOTOGRAPHER
Entrance to Lake Placid Olympic Sports Complex off Route 73 in Lake Placid on Tuesday, February 11, 2020.

Furthermore, many properties being utilized for short-term rentals would be unaffordable for local workers and would otherwise likely be used as vacation homes and remain vacant when the owner is not using it, the report determined.

But while not the root cause, the report did find “strong evidence” that short-term rentals are “constraining” the supply and availability of long-term rental units, and have “exacerbated” the housing crunch. 

If current trends continue and the number of existing properties in the community being used for short-term rentals continues to rise, it will “very likely” push out additional year-round worker households.

The emotionally charged public debate has seen the traditional fault lines emerge in the Adirondacks between long-term residents and second homeowners. 

But discussion has revealed that those fault lines also break down into a spiderweb of mixed interests and unexpected connections.

Elected officials own traditional motels decimated by vacation rentals; neighbors annoyed by rowdy tourists units own online rentals themselves — even tourists battling online rentals in their own communities are staying in local Airbnbs. 

“It’s very polarizing,” said a member of Lake Placid Resident Hosts, a coalition of local short-term rental owners, who asked for anonymity because they didn’t want to antagonize their neighbors. “We all wear a lot of hats in the community.” 

ARMS RACE

At the Pines Inn, a vintage six-story brick hotel on Saranac Avenue, Jill Cardinale Segger checked in athletes and families streaming into town for the Empire State Winter Games.

Then she navigated the snow-packed backyard path to check in Airbnb guests at her home.

Frank Segger and Jill Cardinale Segger bought the hotel in the town’s Hillcrest neighborhood in 2004. 

The tennis court behind the 30-room hotel was overgrown and neglected, so the couple ripped it out and built their new home on the footprint, naming it “Zuhause” and renting out three rooms where they co-exist with their guests in a model known as a “hosted short-term rental.” 

PETE DEMOLA/STAFF REPORTER
Jill Cardinale Segger, who lives in an owner-occupied vacation rental in the village's Hillcrest neighborhood, also co-owns the Pines Inn. PETE DEMOLA/STAFF REPORTER
Jill Cardinale Segger, who lives in an owner-occupied vacation rental in the village's Hillcrest neighborhood, also co-owns the Pines Inn.

“For me, it’s a good way to help pay the property taxes,” Segger said. “Not to mention it’s fun.”

Seggers couldn’t ballpark her annual tax bill, but the Huttlingers estimated they pay $10,000 in town, village and school taxes.

Local residents contend short-term rentals allow them to afford to stay in the community because of the extra income. But the industry has created somewhat of an arms race in neighborhoods like Hillcrest. Rental units drive up property values, particularly when older homes are torn down and larger ones rebuilt in the footprint. 

The industry has driven the median home value in the village from $300,000 to nearly $400,000, making a solution a tricky needle to thread.

“People rent so they can pay their property taxes,” Lake Placid Mayor Craig Randall said. “We don’t want to restrict home ownership.”

Local real estate agent Jennifer Ledger said that when clients are looking for a second home, they ask about rentals to help pay their mortgages 90 percent of the time. 

People fixing up their homes is a good thing, she said. 

“But it does drive property values up,” Ledger said. “It’s a double-edged sword, really. There’s no easy answer to the issue we’ve got going on here.”

CHANGING TRENDS

Tourism is the village’s lifeblood, and its role as an alpine destination and two-time host of the Winter Olympic Games and U.S. men’s hockey team’s “Miracle on Ice” victory is world-renowned. 

Visitation to Lake Placid is also increasingly event-driven, with annual draws like IronMan, Lake Placid Summit Lacrosse, Can-Am Rugby and the Empire State Winter Games packing people in.

There are so many events, online rentals are necessary to accommodate spikes in lodging amid demand for major events, acknowledged the Regional Office of Sustainable Tourism (ROOST), the agency that manages the region’s tourist assets.

Cheryl Kingsbury’s son and husband play adaptive sled hockey. Most of the team’s 15-member delegation opted to stay in an Airbnb during their trip last month.

The cost savings is a draw, Kingsbury said, because it’s easier for people to pool their resources, making trips more affordable. 

ERICA MILLER/STAFF PHOTOGRAPHER  
View of downtown on Main Street in Lake Placid on Tuesday, February 11, 2020.ERICA MILLER/STAFF PHOTOGRAPHER
View of downtown on Main Street in Lake Placid on Tuesday, February 11, 2020.

Renting houses is also attractive for athletes because it helps build team camaraderie, she said, and amenities like game rooms and multiple televisions at private residences are a draw. 

To pump themselves up ahead of their championship match at Herb Brooks Arena, the team watched the feel-good hockey flick “Miracle on Ice.” 

“It’s become a tradition, and you can’t do that at a hotel,” Kingsbury said. “It just gives it more of a family feel.”

Kingsbury lives in Waitsfield, Vermont, a ski community struggling with the same issues. The town, she said, can be unbearable during holiday weekends due to the influx of tourists.  

“As a local person, you don’t even want to leave your house,” Kingsbury said. 

Athletes and their families poured into the Redneck Bistro, a southern-style BBQ restaurant located in the same complex as the Pines Inn in the village's Hillcrest neighborhood. There’s “no question” vacation rentals have bolstered business, said co-owner Anna Polak.

“We’re crazy busy and we think it’s because of Airbnb,” Polask said. “Our dynamics have changed.”

While lunch orders have fallen, an indicator that people may be opting to cook at their rental units instead, she has noticed an uptick in takeout orders.

Tourism officials determined short-term rentals have larger party sizes, which translates to more local spending. They also spend more money and stay longer, according to ROOST.

But at the same time, businesses are also struggling with employee recruitment and retention, and have flagged the lack of affordable housing as their most significant problem.

Nearly three of 10 local employers have had prospective employees turn down job offers in the past year because they can’t find somewhere to live, while more than half said the lack of affordable housing negatively impacts their ability to hire and keep workers. 

Also online: As Lake Placid celebrates 40th anniversary of Winter Olympics, community faces a housing crisis

“Finding employees is a struggle right now,” said Rory Lustberg, owner of Eleanor’s Pasta Kitchen and Wyatt’s. 

Housing is just one of the potential reasons, said Lustberg, who also wondered if young peoples’ work ethic has changed over time and if a population decrease has shrunk the workforce pool. 

Conventional hotels are holding their own against online rentals, but the balance is gradually shifting.

ERICA MILLER/STAFF PHOTOGRAPHER  
Lake Placid Mayor Craig Randall stands outside the Olympic Center in Lake Placid on Tuesday, February 11, 2020.ERICA MILLER/STAFF PHOTOGRAPHER
Lake Placid Mayor Craig Randall stands outside the Olympic Center in Lake Placid on Tuesday, February 11, 2020.

Randall, the village mayor, said occupancy at his family-owned motel is down 30 percent and families have all but disappeared, leading them to shutter their pool. 

Other hoteliers say that while they’ve taken a hit from online rentals, multiple trends are shaping the industry.

“The reality is, properties like ours and in the hotel business in general, we have to do twice as much work to garner the same amount of bookings, because peoples’ stays aren’t as long,” said Petra Weber, manager of the family-owned Wildwood on the Lake. 

The hospitality industry uses a metric known as “RevPar” to track a property’s ability to fill available rooms. An increase in RevPar, which is calculated by multiplying a hotel's average daily room rate by its occupancy rate, means the average daily occupancy rate is increasing. 

Between 2018 and 2019, the rate increased just 1.1 percent, according to industry guide STR. 

“That was the smallest increase in 5 or 6 years,” said ROOST CEO Jim McKenna.

Another way to track the impact of short-term rentals is the bed tax collected by the county.

While collections are growing at a healthy clip — the county crossed the $3 million mark last year for the first time, a $133,000 increase over 2018 — online rentals are quickly consuming a bigger slice of the pie. 

Revenues generated from traditional lodging provided the lion’s share at $2.1 million, with online rentals and private rentals garnering $689,000, or 32 percent. 

That share was 19 percent in 2018 and 16 percent the year before. 

ERICA MILLER/STAFF PHOTOGRAPHER  
View of downtown Lake Placid over Mirror Lake off Mirror Lake Drive in Lake Placid on Tuesday, February 11, 2020.ERICA MILLER/STAFF PHOTOGRAPHER
View of downtown Lake Placid over Mirror Lake off Mirror Lake Drive in Lake Placid on Tuesday, February 11, 2020.

Numbers are only expected to grow as more operators sign up with the county, which required short-term rentals to start paying the tax in 2015, said Essex County Treasurer Mike Diskin. 

“It’s been growing as people realize they need to sign up,” Diskin said.

Is Lake Placid the victim of its own success? 

While once focused on driving visitation to the Adirondacks, ROOST is now pivoting to a strategy of “destination management” and is no longer focused on solely increasing raw numbers, said McKenna.

Boosting visitation has long been a strategy of Gov. Andrew Cuomo. 

Bold-faced initiatives like the Adirondack Challenge are designed to drive visitors to the North Country through splashy events, including whitewater rafting with high-level people such as former New York City Mayor and current Democratic presidential candidate Mike Bloomberg. 

The Lake Placid winter event hasn’t been held since 2016 and has morphed into an Oktoberfest-style event in Wilmington. But the summer event in North Creek and Indian Lake is still going strong, and designed to attract visitors to lesser-trafficked areas of the Adirondacks and the focus of intense state investments.

In Lake Placid, McKenna said officials will now try to “even off the seasons.”

“It really becomes more of a management issue than marketing moving forward,” McKenna said.

SOLUTION IN SIGHT? 

The ripple effects of short-term rentals will not be solved overnight. But as the community cocks a weary eye toward summer, car-clogged roads and rowdy hot-tub parties might be a thing of the past. 

After studying what other localities did nationwide to rein in the industry, from Boulder to Lake George, town and village officials are reviewing the latest draft of a local law designed to regulate the industry. 

Randall expects a public hearing within weeks. 

Stakeholders agree that discussion has grown more nuanced over time, and consensus has generally emerged that not all short-term rental units are created equal.

The draft legislation makes a distinction between properties like those run by the Seggers and those owned by absentee operators who are snapping up properties as investment properties and turning a blind eye to obnoxious behavior.

Operators who reside in their units for 275 days annually would be exempt from the registration and occupancy requirements.

Others will be required to obtain permits, require a designated point-person to be on call around the clock to respond to complaints, limit the number of guests and ensure an adequate number of parking spaces. 

PETE DEMOLA/STAFF REPORTER
Petra Weber, manager of the family-owned Wildwood on the Lake, believes online rentals in residential neighborhoods like Hillcrest should be regulated. PETE DEMOLA/STAFF REPORTER
Petra Weber, manager of the family-owned Wildwood on the Lake, believes online rentals in residential neighborhoods like Hillcrest should be regulated.

In an effort to quash noise complaints, the law would also ban backyard fires, weddings, corporate events and commercial functions after 10 p.m.

And while a more controversial provision requiring a three-day minimum stay was stripped out after operators said it would hamper weekend trips, the draft legislation would limit rentals to 90 days annually. 

“All of this is trying to calm it down,” Randall said. 

The regulations will also help the local police department determine how many people are actually in town. Large-scale events can see the village’s population swell to 20,000, said Lake Placid Assistant Police Chief Charles Dobson, which is roughly 10 times the year-round population.

“It’s kind of hard to do community policing when the community is always changing,” he said.

After grappling with identical issues, Lake George adopted similar regulations and restricted short-term rentals from some residential neighborhoods, which largely culled complaints, said Dan Barusch, the town and village of Lake George’s director of planning and zoning.

“We’ve only had one noise complaint associated with short-term rentals,” Barusch said. 

As decision day approaches in the Olympic Village, opinions remain cleaved. 

While pleased officials are taking action, Karen Huttlinger would prefer if absentee owners were banned from residential neighborhoods altogether. 

“We’re not so sure Hillcrest is salvageable,” she said. “But we don’t want other neighborhoods to fall victim.”

ERICA MILLER/STAFF PHOTOGRAPHER  
Houses along Hillcrest Ave in Lake Placid on Tuesday, February 11, 2020.ERICA MILLER/STAFF PHOTOGRAPHER
Houses along Hillcrest Ave in Lake Placid on Tuesday, February 11, 2020.

Lake Placid Resident Hosts said anything beyond a permitting process would be “unproductive.”

“This whole Big Brother watching seems insane for people who spend their lives here,” said the person who asked for anonymity. 

Another group of rental operators, Gold Medal Hospitality, didn’t respond to multiple requests for comment from the Daily Gazette. But they painted a gloomy future of plummeting sales-tax revenues, lost income and the further deterioration of properties in a letter to the Adirondack Daily Enterprise, “especially for larger or older homes in need of renovation or those that would remain on the market or vacant and begin to become rundown.”

Weber said the letter only inflamed tensions in the already stressed town.

“It was the kiss of death,” she said. 

Also online: As Lake Placid celebrates 40th anniversary of Winter Olympics, community faces a housing crisis

She hopes legislation can restore a sense of balance.

Like Seggers, Weber occupies a unique position: She’s a traditional hotel owner who also owns a property on Acorn Lane in the embattled Hillcrest neighborhood. 

ERICA MILLER/STAFF PHOTOGRAPHER  
View of downtown on Main Street in Lake Placid on Tuesday, February 11, 2020.ERICA MILLER/STAFF PHOTOGRAPHER
View of downtown on Main Street in Lake Placid on Tuesday, February 11, 2020.

“Should this place close, I would never be able to move back into that house,” Weber said.

Randall said legal challenges are inevitable. “This is hard work and it’s not easy to find that middle path that’s going to work for the majority of people,” he said. “It will take a while to implement. You can’t turn a ship on a dime”

After a long weekend, night fell on Hillcrest. The white shroud of snow blotted out most sounds — except what many lamented had disappeared from the neighborhood, the loud chatter of children from their rental house. 

Downtown, as the main drag throbbed with activity, a worker at an outdoors shop sighed and questioned what impact the regulations would have on a town hell-bent on tourism: More events, more people — more everything.  

“The machine,” she said, “is not going to stop.” 

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