The regulation aims to preserve neighborhood character and maintain housing availability.
PRINCETON, NJ - Princeton recently held a work session on regulations for short-term rentals after years of discussion. One of the key decision points centered on whether such properties should be required to serve as owners' primary residences.
Municipal Administrator and Health Officer Jeff Grosser presented the findings of a dedicated short-term rental work group at the work session, outlining the progress made since the initiative became a formal priority during the mayor and council's 2025 goal-setting session.
The proposed regulations aim to balance four primary objectives - ensuring public safety through inspections and clear requirements, preserving neighborhood character, maintaining housing availability for long-term residents, and balancing the interests of property owners, visitors, and the broader community.
"We're trying to build community," Councilman Leighton Newlin said. "If you live here, and this is your permanent residence, and you want help to raise a family, to grow old in place, by using your land and your property as an Airbnb, you should be able to do that. But if you do not live here, and all you want to do is churn and live wherever you want to live and create a problem for the neighborhood people here in this community... you have to make an investment if you want to be here."
The work group, comprising staff from administration, health, engineering, planning, zoning, and rental housing, along with Mayor Mark Freda and council members, researched how more than 25 New Jersey municipalities currently regulate short-term rentals. Officials also met with representatives from Asbury Park to discuss implementation and lessons learned.
Princeton currently has an estimated 125 to 150 short-term rental properties operating in town, according to data from monitoring platforms, though exact numbers are difficult to confirm without a formal registration system in place, Grosser said.
The proposed ordinance would establish a permit application system similar to the municipality's existing long-term rental process, with registration fees, safety inspections, and annual renewals.
The municipality would utilize two software platforms—OpenGov, already in use by the rental housing division at no additional cost, and Deckard, a monitoring platform costing approximately $5,000 annually—to track compliance and manage registrations.
Beyond regulation, the ordinance would implement a 3 percent occupancy tax on short-term rentals, as permitted under state law enacted in 2018.
Based on preliminary estimates, this could generate between $70,000 and $200,000 annually for the municipality, though these figures are broad estimates that will be refined once a monitoring system is operational, officials said.
The most significant policy decision facing council members involves four options for handling the principal residence requirement:
Council members expressed general support for moving forward quickly with regulations.
Councilman David Cohen praised the comprehensive research and noted that while revenue projections assume a 79 percent occupancy rate, Princeton may see more intermittent rentals—such as professors renting homes during summer breaks or residents capitalizing on reunion weekends—which could affect actual revenue figures.
Councilwoman Mia Sacks said that the regulations are not meant to vilify current Airbnb operators, noting a responsible operator in her own neighborhood, but rather to prevent large sections of town from becoming hotel-like and to ensure community members remain invested in Princeton long-term.
Grosser indicated that if the council provides direction at upcoming meetings, the municipality could introduce the ordinance before year's end, with implementation targeted for early 2026.
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