Princeton staff outline short‑term rental ordinance options; council signals preference for 12–24 month phase‑out

Municipal staff on Oct. 8 presented a draft short‑term rental ordinance that would create a registration and permit system, require inspections, set operational rules, and enable collection of the state‑authorized transient occupancy tax; council members expressed substantial support for a phase‑out approach that limits non‑principal short‑term rentals over a 12–24 month transition.

Jeff (Deputy Administrator/Health Officer) reviewed the work group’s research, proposed six ordinance elements (boundaries, permits and fees, inspections, issuance and appeals, operational requirements, and penalties) and recommended pairing the town’s existing OpenGov permitting software with a monitoring platform called Deckard (estimated cost $5,000 per year). “Short term rental conversations in Princeton trace back several years,” Jeff said, summarizing the legal background and prior municipal work.

Staff described four options for a principal‑residence requirement: immediate prohibition of non‑principal STRs (option 1); a phased 12–24 month transition (option 2); allowing existing non‑principal STRs to continue until a property changes hands (option 3, current draft); and no owner‑occupancy requirement (option 4). The work group recommended a structure consistent with the municipality’s existing long‑term rental protocols, using OpenGov for registrations and Deckard for active listing surveillance.

Staff outlined enforcement and administration capacity: current rental‑housing staffing includes one full‑time inspector and two part‑time stipends; staff said those resources plus OpenGov would be adequate to manage registrations and inspections initially. Estimates of existing short‑term listings ranged from about 100 to 150 properties; staff cautioned that public data (AirDNA) can double‑count listings and that an active monitoring contract would produce more accurate counts.

On tax and revenue, staff noted the state allows a 3 percent occupancy tax on transient accommodations and that major booking platforms (Airbnb, Vrbo) generally remit such taxes automatically once municipalities register; however, staff also said listings rented by word‑of‑mouth would be harder to detect and require investigation. Staff emphasized estimates were high‑level and would be refined once monitoring was in place.

Council members pressed legal and practical questions. Councilmember Layton argued the council should protect housing availability and neighborhood character and urged an aggressive owner‑occupancy approach: “We’ve got to stop new construction here in Princeton, New Jersey that has no intention at all of having a family live there, but is a boutique hotel operator,” he said. Several other council members expressed preference for option 2 (12–24 month phase‑out) as a compromise that provides transition time for existing operators while moving toward preserving principal‑residence units.

Legal counsel (Lisa) told the council that case law (Third Circuit decisions) and prior municipal ordinances provide pathways for local regulation and that outright prohibitions are legally defensible, though existing contractual obligations could pose a narrower caveat. Staff said with council feedback the ordinance could be updated and introduced before the end of the year to be implemented in early 2026.

No ordinance was introduced or adopted at the meeting. The council’s direction at the work session was to incorporate feedback, with several council members saying they preferred Option 2; staff said they would return with a revised draft and that enforcement would rely on OpenGov plus a Deckard monitoring subscription and staff inspections.