Last fall, the Town of Ellicottville held a public hearing to address growing concerns about short-term rentals. Residents raised issues like over-occupancy, noise disturbances, garbage handling and parking — especially during winter when plowing is impacted by improperly parked cars
However, when the new regulations officially took effect on March 1, 2025, the law focused much more on fire safety compliance than the original concerns raised.
Why the Focus Shifted
In December 2024, New York State reclassified short-term rentals as commercial activity in an effort to “level the playing field” with hotels.
This created two major impacts:
- Properties must now meet modern fire safety codes
- Sales tax must be collected on all short-term stays
Airbnb began collecting and remitting sales tax in mid-March. VRBO is expected to follow, but until then, owners are responsible for remitting it directly to the state — a process that remains unclear.
At EVL Property Rentals, we handle sales tax across all major platforms so our owners stay compliant without the hassle.
While the town cites safety risks due to unfamiliar guests, no formal data has been provided to support this. Headlines around fire-related tragedies in other areas likely influenced this policy shift.
How This Affects Property Owners
To get licensed in the Town of Ellicottville, owners must:
- Pass a fire inspection
- Ensure bedrooms meet updated egress and safety standards
- Post owner and rental company contact information inside the home
- Disclose all LLC members if the property is held under an LLC
Bedroom count determines your guest limit:
Max occupancy = 2 guests per legal bedroom + 2 additional guests
Example: 3 legal bedrooms = 8 guests (2×3 + 2)
Rooms without proper egress — like basement spaces with small or no windows — may no longer qualify as bedrooms. That can reduce your occupancy and revenue.
Important: You cannot simply lock the door to exclude a non-compliant room. All spaces must be inspected and compliant. If a room does not meet egress requirements, it must be physically converted to a non-bedroom — typically by removing bedroom furniture and using the space for a different purpose.
If a room doesn’t qualify, owners have two options:
- Remove bedroom furniture and treat the room as a non-sleeping space
- Make the necessary upgrades to meet code by the end of 2025
At EVL Property Rentals, we’ve advised all owners to apply now and schedule their initial inspection. If egress improvements are needed, we’ll coordinate those in November and schedule final inspections before year-end.
Limited Licenses Ahead
Starting in 2026, only one license will be allowed per owner. This change has already impacted development plans.
Concerns include:
- Higher compliance costs
- Lower rental income
- Potential decline in property values
- No economic study to assess the full impact
This may ultimately reduce supply, increase prices for visitors, and shift tax burdens if assessments change.
What About Other Towns?
Right now, these rules apply only to the Town of Ellicottville — but nearby towns like Great Valley, Mansfield, and Salamanca don’t yet have similar laws.
We expect to see some spillover as owners seek more flexibility. But these towns may follow Ellicottville’s lead.
Ellicottville’s seasonal nature makes hotel investment hard to justify.
Short-term rentals fill that gap — especially for ski season and summer weekends — helping support local tourism and businesses.
Many Owners Still Don’t Know
Despite going into effect in March, the town hasn’t formally notified all property owners.
So far:
✅ About 45 licenses issued (as of June 9th)
🏘️ Estimated 700+ rentals operating
That suggests most owners aren’t aware or haven’t acted yet. Given limited resources, the town likely won’t inspect every property by year-end.
Our Concerns
We’ve raised concerns directly with the town board — through the code enforcement officer — about how this law was created and communicated.
No economic study has been shared publicly
No data has been provided to prove short-term rentals are riskier than other housing types
We fear the unintended consequences will do more harm than good.
If rental income drops, reassessments may follow — and tax burdens could shift to those who don’t rent.
For many local and part-time owners, rental income helps offset the cost of owning a property. Limiting or disrupting that income may negatively affect affordability, investment, and long-term tourism health.
What We Recommend
Apply for your short-term rental license as soon as possible — even if you don’t plan to rent right away.
With the one-license-per-owner rule approaching, it’s smart to get grandfathered in while you still can.
Need help? Reach out to us.
Disclaimer: This post is for informational purposes only and does not constitute legal advice.