Paterson Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Paterson

As of 2024, Paterson does not have specific regulations or licensing requirements for short-term rentals like Airbnb. The city's zoning and property maintenance codes do not explicitly address short-term rentals.

However, all residential rental properties in Paterson, regardless of the length of the rental term, are subject to the city's rent control ordinance and registration requirements. Landlords must file an annual rent roll registration with the Department of Property Maintenance by September 1st of each year.

The annual rent roll filing must include the following:

1. A list of all rental units and current rents
2. A sworn affidavit attesting to the accuracy of the information
3. A $100 filing fee, with late penalties ranging from $300-$1000 for submissions after September 1st

Landlords are also required to notify the Department of Property Maintenance within 30 days of any changes to the rent roll throughout the year.

While these registration requirements apply to all rentals, including short-term ones, there is no specific short-term rental permit or license required in Paterson at this time.

However, operating a short-term rental may be considered a change of use under the city's zoning code. Section 300-1 of the Paterson zoning ordinance lists permitted and prohibited uses for each zoning district. Short-term rentals are not explicitly listed as permitted for use in residential zones.

Therefore, property owners interested in operating short-term rentals in Paterson should consult with the city's zoning office to confirm whether it is allowed for their specific property. A zoning permit or variance may be required to legally operate.

As short-term rentals continue to grow in popularity, it's possible that Paterson may enact more specific regulations and permit requirements in the future, as other New Jersey cities like Jersey City and Newark have done. Hosts should monitor any regulatory changes and ensure compliance with all applicable local, state, and federal laws.

Short-Term Rental Licensing Requirements in Paterson

Currently, Paterson does not have specific licensing requirements for short-term rentals like Airbnb. The city's zoning and property maintenance codes do not explicitly address short-term rentals.

However, all residential rental properties in Paterson, regardless of the length of the rental term, are subject to the city's rent control ordinance and registration requirements. Landlords must file an annual rent roll registration with the Department of Property Maintenance by September 1st of each year.

The annual rent roll filing must include:

1. A list of all rental units and current rents
2. A sworn affidavit attesting to the accuracy of the information
3. A $100 filing fee, with late penalties ranging from $300-$1000 for submissions after September 1st

Landlords are also required to notify the Department of Property Maintenance within 30 days of any changes to the rent roll throughout the year.

While these registration requirements apply to all rentals, including short-term ones, there is no specific short-term rental permit or license required in Paterson at this time.

However, it's important to note that operating a short-term rental may be considered a change of use under the city's zoning code. Section 300-1 of the Paterson zoning ordinance lists permitted and prohibited uses for each zoning district. Short-term rentals are not explicitly listed as a permitted use in residential zones.

Required Documents for Paterson Short-Term Rentals

While Paterson does not currently have specific licensing requirements for short-term rentals, property owners who wish to operate short-term rentals should be prepared to provide the following documents:

1. Proof of ownership, such as a deed or property tax bill, demonstrating that you are the legal owner of the property.
2. A completed rent roll registration form, which must be filed annually with the Department of Property Maintenance by September 1st. This form includes information about all rental units in the property, current rents, and a sworn affidavit attesting to the accuracy of the information.
3. A spreadsheet showing how each rent was calculated in compliance with the city's rent control regulations. This must be provided along with the annual rent roll registration.
4. Proof of liability insurance covering the rental property. While not specifically required for short-term rentals, it is strongly recommended to protect against potential guest injuries or property damage.
5. A written lease agreement for each short-term rental transaction. Even though short-term rentals are typically booked through online platforms, it is advisable to have a separate lease agreement outlining the terms of the rental, including duration, payment, house rules, and any other specific conditions.
6. Rental receipts provided to tenants reflecting rent paid. Landlords must provide these receipts via email, regular mail, or hand delivery within seven days of receiving payment and keep a record of the receipts on file.
7. If applicable, a zoning permit or variance allowing short-term rental use. Since short-term rentals are not explicitly listed as permitted for use in residential zones, property owners should consult with the city's zoning office to confirm whether a permit or variance is required.

It's important to note that these documentation requirements are based on the city's existing rental regulations and general best practices. As short-term rentals continue to grow in Paterson, it's possible that the city may introduce more specific requirements in the future.

Property owners should stay informed of any regulatory changes and be prepared to provide additional documentation as needed to ensure compliance with all applicable laws. Consulting with a local attorney or property manager experienced in short-term rentals can help navigate the evolving legal landscape.

Paterson Short-Term Rental Taxes

While Paterson does not currently have specific regulations or licensing requirements for short-term rentals, hosts are still subject to various tax obligations at the state and local levels.

Short-term rental operators in Paterson must collect and remit the following taxes:

1. New Jersey Sales and Use Tax: The state sales tax rate is currently 6.625%. This tax applies to short-term rentals of less than 90 consecutive days. Hosts must register with the New Jersey Division of Revenue and Enterprise Services, obtain a sales tax permit, and file quarterly returns.
2. Paterson Occupancy Tax: Paterson does not currently impose a local occupancy tax on short-term rentals. However, it's important to note that nearby cities like Newark and Jersey City do have additional occupancy taxes ranging from 6-14%. Hosts should monitor any potential changes to local tax laws.
3. Federal Income Tax: Rental income, including from short-term rentals, is generally subject to federal income tax. Hosts must report all rental income on their annual tax return and may be able to deduct certain expenses like mortgage interest, property taxes, insurance, and maintenance costs.

It's crucial for short-term rental operators in Paterson to maintain detailed records of all rental transactions, including dates, guest information, rental amounts, and any taxes collected. This documentation will be necessary for filing accurate tax returns and responding to any audits or inquiries from tax authorities.

Failure to comply with applicable tax laws can result in penalties, interest charges, and legal consequences. Hosts should consult with a qualified tax professional to ensure they are meeting all their obligations and taking advantage of any available deductions or exemptions.

As the short-term rental market continues to evolve, it's possible that Paterson may introduce more specific tax requirements in the future, similar to other cities in the region. Hosts should stay informed of any regulatory changes and adapt their tax compliance strategies accordingly.

By understanding and fulfilling their tax responsibilities, short-term rental operators in Paterson can avoid costly mistakes and maintain a successful and compliant business.

New Jersey Wide Short-Term Rental Rules

While specific short-term rental regulations can vary by municipality in New Jersey, there are some general rules and considerations that apply statewide:

1. Transient Accommodation Tax: New Jersey imposes a statewide tax on charges for the rental of transient accommodations, including short-term rentals. The tax rate is currently 6.625% for rentals of less than 90 consecutive days. Hosts must register with the New Jersey Division of Revenue and Enterprise Services, collect the tax from guests, and remit it to the state on a quarterly basis.
2. Mercantile Licensing: In many New Jersey municipalities, short-term rental operators may be required to obtain a mercantile license or register their business with the local government. This typically involves providing information about the property, the owner, and any local contact persons, as well as paying a fee.
3. Zoning and Land Use Regulations: Short-term rentals may be subject to local zoning and land use regulations that restrict where and how they can operate. Some municipalities may prohibit short-term rentals in certain residential zones or require conditional use permits. Hosts should check with their local zoning office to ensure compliance.
4. Building and Housing Codes: Short-term rental properties must comply with applicable building, housing, and safety codes. This may include requirements for fire safety equipment, emergency exits, and maximum occupancy limits. Periodic inspections may be required to maintain a rental license.
5. Noise and Nuisance Ordinances: Many New Jersey municipalities have ordinances that prohibit excessive noise, parties, and other nuisance activities that can disrupt neighbors. Short-term rental hosts are typically responsible for ensuring their guests comply with these rules and may face fines or license revocation for repeated violations.
6. Parking Restrictions: Some municipalities may have specific parking requirements for short-term rentals, such as providing a certain number of off-street spaces or prohibiting on-street parking by guests.
7. Insurance Requirements: While not mandated by state law, many New Jersey municipalities require short-term rental operators to maintain liability insurance to cover potential guest injuries or property damage. Hosts should review their insurance policies and consider obtaining additional coverage specific to short-term rentals.
8. Condominium and HOA Rules: For properties located in condominiums, cooperatives, or homeowners associations, short-term rentals may be subject to additional restrictions or outright prohibitions in the governing documents. Hosts should carefully review their bylaws and obtain any necessary approvals before listing their property.

It's important to note that New Jersey municipalities have broad authority to regulate short-term rentals, and many have enacted detailed ordinances with specific requirements. Hosts should always consult their local government websites and contact the relevant departments to ensure they are fully compliant with all applicable rules.

Failure to comply with state and local regulations can result in significant fines, penalties, and legal action. By understanding and following the rules, short-term rental operators in New Jersey can minimize their risk and maximize the benefits of this growing industry.

Does Paterson Strictly Enforce STR Rules?

Based on discussions in real estate forums like Bigger Pockets and Reddit, Paterson appears to be relatively lenient in enforcing short-term rental regulations compared to other New Jersey cities. As of 2023, the city does not have specific rules or permit requirements for short-term rentals, although all rental properties are subject to rent control and registration requirements.

Several hosts have reported operating short-term rentals in Paterson without facing any enforcement issues or neighbor complaints. One Airbnb host on Reddit shared, "I've been renting my place on Airbnb for a while now with no problems. Paterson seems pretty chill about it."

Compared to nearby cities like Jersey City and Newark, which have implemented strict short-term rental ordinances with licensing requirements and occupancy taxes, Paterson is considered more friendly to Airbnb hosts. The city has approximately 120 active Airbnb listings as of 2022.

However, this may change in the future as Paterson grapples with the impacts of short-term rentals on housing affordability and quality of life. Some residents and officials have raised concerns about the proliferation of short-term rentals in certain neighborhoods, like the Eastside Park area, and the potential for disruptive behavior by guests.

The general consensus among hosts is that while Paterson may not actively enforce short-term rental rules at present, the regulatory landscape is likely to evolve. As one Bigger Pockets user put it, "Paterson is pretty lax right now, but I wouldn't count on that lasting forever. It's always a good idea to stay on top of any new ordinances or permit requirements."

In conclusion, Paterson is currently more Airbnb-friendly than many other New Jersey cities, with little evidence of strict enforcement against short-term rentals. However, hosts should be prepared for potential changes in the future as the city considers the impacts on neighborhoods and housing stock. Monitoring local developments and ensuring compliance with any new rules will be key to minimizing risk and maintaining successful short-term rental operations in Paterson.

How to Start a Short-Term Rental Business in Paterson

While Paterson does not currently have specific regulations for short-term rentals, here are the general steps to start a short-term rental business in the city:

1. Research local zoning laws and confirm that short-term rentals are permitted in your property's zone. Consult with the Paterson Zoning Office if needed.
2. Register your rental property with the Paterson Department of Property Maintenance by filing an annual rent roll registration by September 1st. Include all required information and pay the $100 filing fee.
3. Obtain a New Jersey sales tax permit from the Division of Revenue and Enterprise Services. You will need to collect and remit the 6.625% state sales tax on all short-term rental transactions.
4. Secure liability insurance coverage for your short-term rental property. While not currently required by Paterson, it is strongly recommended to protect against potential guest injuries or property damage.
5. Develop a detailed lease agreement and house rules for your short-term rental guests. Include provisions for noise, parking, occupancy limits, and any other specific conditions to ensure compliance with local regulations and minimize disturbances to neighbors.
6. Invest in any necessary property upgrades or amenities to make your short-term rental competitive and attractive to guests. Consider factors like furnishings, kitchen equipment, linens, wifi, and parking.
7. Create a listing for your short-term rental on popular platforms like Airbnb and VRBO. Use high-quality photos, detailed descriptions, and competitive pricing to stand out in the Paterson market.
8. Implement a guest screening and communication process to ensure smooth bookings and prevent potential issues. Promptly respond to any inquiries or concerns from guests or neighbors.
9. Arrange for regular cleaning, maintenance, and restocking of your short-term rental between guest stays. Consider hiring a professional cleaning service or property manager to assist.
10. Keep accurate records of all rental transactions, including dates, guest information, rental amounts, and any taxes collected. Maintain copies of lease agreements and rental receipts as required by Paterson's rent control ordinance.

• Stay informed of any changes to local short-term rental regulations or tax requirements. It's important to monitor developments and ensure ongoing compliance to ensure a smooth and flawless operation.

By following these steps and prioritizing compliance with applicable laws and best practices, you can establish a successful short-term rental business in Paterson.

Who to Contact in Paterson about Short-Term Rental Regulations and Zoning?

For the most up-to-date information on short-term rental regulations and zoning in Paterson, contact the following departments:

Department of Community Development

Division of Planning & Zoning
125 Ellison Street, 4th Floor
Paterson, NJ 07505
Phone: (973) 321-1343
Email: mdeutsch@patersonnj.gov

The Division of Planning & Zoning can provide guidance on whether short-term rentals are permitted in your property's zone and any applicable requirements or restrictions. They can also assist with zoning permits or variances if needed.

Department of Community Development

Division of Community Improvements
125 Ellison Street, 2nd Floor
Paterson, NJ 07505
Phone: (973) 321-1212 ext. 2263
Email: lburgos@patersonnj.gov

The Division of Community Improvements handles code enforcement and property maintenance issues. They can provide information on any required inspections or permits for short-term rental properties.

Department of Economic Development

Division of Licenses & Inspections
65 Hamilton Street
Paterson, NJ 07505
Phone: (973) 321-1232
Email: jmcneil@patersonnj.gov

The Division of Licenses & Inspections is responsible for issuing mercantile licenses and enforcing related regulations. While Paterson does not currently require a specific short-term rental license, hosts may need to obtain a mercantile license to operate legally.

In addition to these city departments, short-term rental operators in Paterson may also need to contact the following state agencies:

New Jersey Division of Revenue and Enterprise Services

PO Box 252
Trenton, NJ 08625-0252
Phone: (609) 292-6400
Website: https://www.state.nj.us/treasury/revenue/

The NJ Division of Revenue and Enterprise Services handles business registration and sales tax collection for short-term rentals. Operators must register for a New Jersey tax ID number and file quarterly sales tax returns.

New Jersey Division of Consumer Affairs

124 Halsey Street
Newark, NJ 07102
Phone: (973) 504-6200
Website: https://www.njconsumeraffairs.gov/

The NJ Division of Consumer Affairs regulates the hotel and motel industry, including short-term rentals. They can provide information on any state-level requirements or consumer protections that may apply.

By contacting these key departments and agencies, short-term rental operators in Paterson can ensure they are complying with all applicable regulations and zoning requirements. Reaching out early in the process of setting up a short-term rental is recommended to avoid any potential violations or penalties.

What Do Airbnb Hosts in Paterson on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions from Airbnb hosts in Paterson on Reddit and Bigger Pockets, here are some key takeaways about their views on local short-term rental regulations:

Hosts acknowledge that Paterson does not currently have specific regulations or permit requirements for short-term rentals, but all rental properties are subject to rent control and registration requirements. Some see this lack of Airbnb-specific rules as an opportunity.

However, there are concerns that the city may implement stricter regulations in the future, especially as the impacts of short-term rentals on housing affordability and neighborhood character become more apparent. One Bigger Pockets user noted, "Paterson is pretty lax right now, but I wouldn't count on that lasting forever."

Hosts emphasize the importance of complying with the city's existing rental property registration and rent control ordinances, even if short-term rentals are not explicitly addressed. Failing to do so could result in fines or legal issues down the line.

Some hosts have reported operating short-term rentals in Paterson without facing any pushback from the city or neighbors. They attribute this to being responsible hosts and maintaining positive relationships in the community.

However, others express concerns about the potential for neighbor complaints or enforcement action as the number of short-term rentals grows. One Reddit user shared, "I've been lucky so far, but I worry that it's only a matter of time before someone reports me if I'm not 100% by the book."

There are mixed views on whether Paterson is a good market for short-term rentals. Some hosts highlight the city's proximity to New York City and lower costs compared to other North Jersey towns. However, others caution that Paterson's reputation for crime and poverty could limit demand from tourists.

Hosts who have found success with Airbnb in Paterson emphasize the importance of thorough screening, clear house rules, and hands-on management to prevent issues. They also recommend investing in higher-end amenities and marketing to stand out in an increasingly competitive market.

Overall, the sentiment among Paterson Airbnb hosts seems to be one of cautious optimism. While they appreciate the current lack of strict regulations, many recognize the potential for change and are taking proactive steps to operate responsibly and minimize risk. Staying informed of any regulatory developments and maintaining positive community relationships will be key to long-term success in this market.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.