Paterson Short Term Rental Regulation: A Guide For Airbnb Hosts

Do you own a place in Paterson and you're weighing whether to put it on Airbnb or Vrbo? Well, the good news is that Paterson has never banned short-term rentals citywide, and there's still no special STR permit to apply for, no waiting period, no annual cap on nights. What you do need is Paterson's general business license, which any short-term rental operator has to carry the same as a dry cleaner or a corner store. Since April 2024, though, the city has drawn a hard line in one specific place: inside a defined stretch of the east side, a short-term rental is illegal unless the owner actually lives there and is present for the stay.

That line matters, because Paterson is Passaic County's seat and its largest city, and the neighborhood the new rule targets, Eastside Park, is exactly the kind of historic housing stock that tends to draw short-term guests in the first place. Get your address on the wrong side of that boundary and run an unhosted rental there, and you're looking at a fine of up to $2,000 a day, not a warning letter. Everywhere else in the city, and even inside that zone if you live in the home yourself, the calculus is a lot simpler.

So let's walk through what applies here in 2026: what counts as starting a short-term rental business in Paterson, the business license you do need, the paperwork behind it, the taxes that stack on top of your nightly rate, and who at the city answers the phone. Every figure below comes from Paterson's own municipal code or New Jersey's own tax bulletins, checked in July 2026. Once the rules are clear, run the numbers on BNBCalc before you commit a property to this strategy.

Starting a Short Term Rental Business in Paterson

That's the roadmap, and the first stop is figuring out whether your particular property is even in play. Paterson doesn't zone short-term rentals out of existence the way some New Jersey towns do, so the honest starting point is: almost any residential property in the city can host paying guests for a stay under 30 days, as long as you clear two things.

The first is geography. Paterson's municipal code (Chapter 275, Article II, added April 9, 2024 by Ordinance No. 24-023) bans an "unattended" short-term rental, meaning nobody who's on the title deed is physically present for a substantial part of every day of the stay, inside one specific bounded area on the city's east side. The zone runs roughly along 11th Avenue to the north, East 43rd Street and McLean Boulevard to the east, 20th Avenue to the south, and Vreeland Avenue and East 33rd Street to the west, which puts most of it inside or near the Eastside Park section. Do check your exact address against the ordinance itself before you assume either way, since Paterson's own online code lists that eastern boundary in oddly worded language and a street-by-street map is worth more than my summary of it.

The second thing to clear is licensing, and this is where Paterson looks different from most of its neighbors. There's no dedicated short-term rental license here, not the way New York City or a lot of Jersey Shore towns run one. What Paterson has instead is a general Mercantile Establishment license, required under Chapter 322 of anyone conducting "any business, trade or occupation" inside the city, and running a paid short-term rental clearly counts. That's the license you need, and it's covered in the next section.

One more wrinkle worth knowing before you buy: if you don't live in Paterson yourself, Chapter 371 requires you to register your own home address with the City Clerk, a leftover from a 1998 ordinance aimed at absentee landlords. It's a small filing, but it's one more thing code enforcement can use to find you if a neighbor complains. And Paterson's zoning code (Chapter 483) still carries old-school definitions for Bed and Breakfast (an owner-occupied home serving meals, licensed and inspected) and Inn (up to 10 guest rooms, also licensed), neither of which fits a typical whole-unit Airbnb listing with no meals service. In practice, a modern short-term rental in Paterson runs on the mercantile license and Chapter 275, not on those older lodging categories.

Short Term Rental Licensing Requirement in Paterson

Since the mercantile license is the actual requirement here, it's worth walking through exactly what it involves. Every mercantile license in Paterson is issued by the Mercantile Licensing division (part of Health and Human Services, formerly filed under Consumer Affairs), and the rules sit in Chapter 322 of the city code.

To qualify, you have to be at least 18, a US citizen, and the actual owner of the business the license covers. The application goes to the Division along with your business details: your name, the location and phone number of the operation, the type of business, and whether you've ever had a license denied or revoked anywhere. If you're a corporation or LLC, you'll also list the registered agent. There's no separate STR application form, so an Airbnb or Vrbo listing goes through the same mercantile process as any other business in the city.

Fee	Amount	When it's due
Application fee	$50	Filed with the application (refunded in full if withdrawn before Council review)
Annual license fee	$125	Calendar year term, expires December 31 regardless of when you apply
Renewal fee	$100	Due 30 days before your current license expires

The City Council has to approve the application before the license issues, and once it does, Paterson's ordinance lets you keep it in force as long as you keep paying the fee on time and stay current on your property taxes. Delinquent property taxes for four consecutive quarters is grounds for suspension on its own. Keep in mind, too, that the license has to be posted where guests or inspectors can see it, and the license number belongs on your listing correspondence the same as it would on an invoice.

One exemption is worth flagging: the chapter doesn't apply to anyone who already holds a state license that specifically exempts their business from municipal licensing. That carve-out exists mainly for professions regulated at the state level, and it's not something a typical Airbnb host qualifies for, so don't assume it applies to you without checking.

Required Documents for Paterson Short Term Rentals

Because that mercantile application is the actual gate here, it pays to have the paperwork ready before you file. The form itself asks for straightforward information rather than a stack of inspection reports, but a few pieces are easy to overlook.

• Proof you're the actual owner of the business. The applicant has to be the business owner, not a manager or a property manager acting on someone else's behalf, and you'll need to be prepared to show that.
• Business details for the form itself, including your Standard Industrial Classification code, the property address, a working phone number, and a description of the operation.
• Any prior licensing history. If a business license was ever denied or revoked anywhere, you have to disclose the dates, location, and authority involved. Leaving this out is treated as a misrepresentation, which is grounds for revocation later.
• Current property taxes. Paterson won't issue or renew the license while property taxes on the address are delinquent, so make sure you check your tax status before you file rather than after a denial.
• A registered address for absentee owners. If you don't live in Paterson, Chapter 371 requires you to register your own home address with the City Clerk, separate from the mercantile application itself.

Beyond the license paperwork, one more document deserves a mention even though its reach into short-term rentals isn't settled: Paterson's Certificate of Re-Rental Approval requires an inspection and city sign-off before "a new tenant" takes possession of housing space, at $50 for the first unit and $20 for each additional one. The city's own description of it talks about a "change in tenancy," which reads like it was built for month-to-month leases rather than a three-night Airbnb booking, and I couldn't find a primary source confirming the city applies it to nightly stays. Treat it as a related ordinance worth being aware of, not a confirmed step in the STR process.

Paterson Short Term Rental Taxes

Once the license and the paperwork are sorted, there's still tax to account for, and this is where Paterson leans on New Jersey's state framework rather than running its own system. New Jersey taxes a "transient accommodation," meaning a room or dwelling booked through a marketplace like Airbnb or Vrbo, or a "professionally managed unit" (an owner who controls two or more other rental units in the state), and the tax stack is simpler here than in cities like Newark or Jersey City that layer a local hotel tax on top.

Charge	Rate	Collected by
NJ Sales Tax	6.625%	Airbnb/Vrbo on bookings of 89 nights or fewer; the host directly for a professionally managed unit booked outside a marketplace
State Occupancy Fee	5.00%	Same as above
Meadowlands Regional Hotel Use Assessment	Does not apply	Paterson isn't one of the 14 listed Bergen/Hudson County towns
Municipal Occupancy Tax (up to 3% in most NJ towns)	Does not apply in Paterson	Paterson is on the state's own exclusion list

Add the two that do apply and a Paterson stay carries 11.625% in combined state tax, before whatever nightly rate and cleaning fee you charge. That's the number to model, and it's meaningfully lower than what a guest pays in Newark, Elizabeth, or Jersey City, since those three cities run their own separate hotel occupancy tax on top of the state layers.

Here's the part worth being honest about: New Jersey's own guidance says Paterson is authorized to run that same kind of separate hotel or tourism tax instead of the standard municipal occupancy tax, the same authority Newark, Elizabeth, and Jersey City use. Going through Paterson's own Taxation chapter of its municipal code, though, I found no hotel or occupancy tax article on the books, only property tax exemptions and the cannabis transfer tax. I couldn't confirm on a primary source that Paterson has actually turned that authority into a real tax, so don't assume one exists, and don't be surprised if that changes without much notice given how many NJ cities have added one in the past two years.

Most bookings made through Airbnb or Vrbo have all of this collected and remitted automatically, since New Jersey requires the marketplace to handle it for stays of 89 consecutive nights or fewer. If you book directly and your unit qualifies as professionally managed, you're the one who has to register with Form NJ-REG at least 15 business days before renting and collect the tax yourself. Note that Paterson's own 28-day definition of "short-term rental" in Chapter 275 and the state's 90-day tax exemption threshold are two different lines for two different purposes, so a 45-night stay can dodge the state's transient tax while still counting as a short-term rental under the city's own ordinance.

Paterson-wide Short Term Rental Rules

Assuming you're through the licensing and tax pieces, a few citywide rules still apply no matter which neighborhood you're in. New Jersey itself doesn't broadly preempt local short-term rental regulation, the way some states do; the Division of Local Government Services confirmed in April 2026 that "rental of short-term transient accommodations is largely subject to municipal ordinance," and the one state statute in play, N.J.S.A. 40:52-1(n), only authorizes a city to license short stays under 175 days if it chooses to, without requiring it. Paterson hasn't built that kind of formal STR license, leaning on the mercantile system instead, but it could add one at any point since the state gives it that room.

Within the city, the rules that matter most day to day are the ones already covered: the mercantile license has to stay current and posted, and the east-side owner-present rule applies regardless of which platform you list on. Beyond those, general property maintenance and safety codes still apply to any rental, short-term or not. If you're converting a unit's use or bringing on a new long-term tenant between short-term bookings, the Certificate of Re-Rental Approval and its associated fire and lead inspections come into play for that change in tenancy, even though its reach into nightly turnover specifically remains unconfirmed.

Since Paterson sits inside New Jersey's broader framework, it's also worth reading the New Jersey statewide guide for how the state's tax and registration rules apply everywhere, and the Passaic County guide for how the surrounding towns handle things differently, since a lot of them run stricter zoning than Paterson does.

Does Paterson strictly enforce STR rules?

That patchwork of state, county, and city rules only matters if the city actually checks it, so it's fair to ask how seriously Paterson enforces any of this. For the mercantile license, enforcement runs the way it does for any general business rule: operating without one is unlawful under Chapter 322, and the city can suspend or revoke a license for fraud, a criminal conviction, unlawful conduct, or failing to comply, following notice and a hearing.

The sharper enforcement question is the east-side owner-present rule, and here Paterson built real teeth into the ordinance. Chapter 275, Article II can be enforced by the Police Department, the Community Improvements Division, the Historic Preservation Division, or the Planning and Zoning Division, whichever has jurisdiction over the specific violation. Penalties run up to $2,000 per violation (or whatever New Jersey's general penalty statute allows, if higher) or up to 90 days in jail, and each day a violation continues counts as a separate offense. Liability doesn't stop at the owner, either: a lessee or even the paying guest can be held liable under the ordinance.

Since this rule only took effect in April 2024, I couldn't find published enforcement statistics, like citation counts or revocation numbers, on a primary source, so I won't invent a track record the city hasn't published. What the ordinance's structure tells you, though, is that this isn't a symbolic rule. Multiple city divisions have explicit authority to act on it, the penalty compounds daily, and it followed real neighborhood complaints about short-term rentals in exactly the area it now covers. Outside that zone, enforcement looks a lot more like ordinary business-license enforcement: complaint-driven, tied to the mercantile system, without the daily-compounding penalty that makes the east-side rule worth taking seriously.

Who to contact in Paterson about Short Term Rental Regulations and Zoning

Given how enforcement is split across several city divisions, knowing which office to call before you list saves you a frustrating runaround. Four offices cover almost everything a host needs.

Mercantile Licensing, for the business license itself:

• Address: 125 Ellison Street, Paterson, NJ 07505
• Phone: (973) 321-1242
• Hours: Monday-Friday, 9:00 a.m. to 4:00 p.m.

Division of Community Improvements, which runs the Housing Bureau (Certificate of Re-Rental Approval, housing maintenance) and Zoning Bureau, and has enforcement jurisdiction over the short-term rental ordinance:

• Address: 111 Broadway, Paterson, NJ 07505
• Phone: (973) 321-1232
• Hours: 8:30 a.m. to 4:30 p.m. (inspectors are in-office only 8:30-10:00 a.m. and 3:30-4:30 p.m.; otherwise they're out on inspections)

Division of Planning & Zoning, for questions about zoning districts, permitted uses, or the Bed and Breakfast/Inn licensing categories:

• Address: 125 Ellison Street, 2nd Floor, Paterson, NJ 07505
• Phone: (973) 321-1343
• Hours: Monday-Friday, 8:30 a.m. to 4:30 p.m.

Police Division, one of four bodies with authority to enforce the east-side ban:

• Address: 111 Broadway, Paterson, NJ 07502
• Phone: (973) 321-1111 (911 for emergencies)
• Hours: Monday-Friday, 9:00 a.m. to 4:30 p.m. for administrative matters

For anything general, Paterson City Hall sits at 155 Market Street, Paterson, NJ 07505, phone 973-321-1600, email [email protected]. And for the state tax side of things, sales tax and NJ-REG registration questions go to New Jersey's Division of Taxation Business Tax Call Center at 609-943-5000, 8:00 a.m. to 5:00 p.m.

What do Airbnb hosts in Paterson on Reddit and Bigger Pockets think about local regulations?

Contact information only tells you what the city says; it doesn't tell you what running a listing here feels like, so it's worth checking what hosts and investors report. I wasn't able to reach Reddit for this guide, since the platform blocks the kind of automated access this pipeline would need and its own policy restricts commercial use of scraped discussion data, so I won't pretend to summarize threads I haven't read.

What I could read directly on BiggerPockets paints a picture that's less about the STR ordinance specifically and more about Paterson as a market generally. On one thread about investing in the city, an experienced investor warned that "some parts of the city are no-go zones" and that properties often sit priced for a hoped-for gentrification buyer rather than at what the neighborhood supports, so do your own block-by-block homework before assuming a listing will perform. A separate thread about a Paterson property flagged high property taxes relative to the age and value of the housing stock as the bigger practical headache, with one investor noting he regularly works with people who buy in Paterson to fix and flip rather than hold and rent.

Neither thread engages with the short-term rental ordinance directly, which tracks with how recent that rule is. The public conversation around Paterson short-term rentals that does exist tends to center on the same east-side neighborhood the 2024 ordinance now regulates, where noise and turnover from short-term guests had been a recurring neighbor complaint before the city acted. That's a reasonable case study for anyone weighing a Paterson listing: the areas most attractive to short-term guests, historic housing stock near the park, are the same ones drawing the closest scrutiny. If Paterson's numbers don't clear your bar once you've run them, the broader New Jersey market data on BNBCalc Markets is worth a look before you rule the state out, and neighboring Bergen County is where a lot of North Jersey investors end up comparing notes.

Frequently Asked Questions

Can you legally run an Airbnb in Paterson in 2026?

Yes, in most of the city. Paterson has no citywide ban on short-term rentals and no dedicated STR permit, only the general mercantile business license required of any business operating in the city. Since April 2024, an exception applies: unattended short-term rentals, meaning no titled owner present during the stay, are banned inside a specific bounded area on the city's east side, near Eastside Park. Owner-occupied, owner-present rentals remain legal there too.

Does Paterson require a short-term rental license?

Not a dedicated one. Paterson requires the same Mercantile Establishment license that applies to any business, trade, or occupation in the city, administered by the Mercantile Licensing division. It costs $50 to apply, $125 per year to hold, and $100 to renew, and it runs on a calendar year regardless of when you apply. There's no separate application form for short-term rentals specifically.

Where in Paterson are short-term rentals banned?

Only inside one defined area on the city's east side, established by a 2024 ordinance and generally bounded by 11th Avenue, East 43rd Street and McLean Boulevard, 20th Avenue, and Vreeland Avenue and East 33rd Street, near the Eastside Park section. Inside that zone, a short-term rental is illegal unless a titled owner is physically present for the stay. Everywhere else in the city, short-term rentals aren't banned by this rule.

What taxes apply to a short-term rental in Paterson?

State Sales Tax at 6.625% and New Jersey's State Occupancy Fee at 5.00% apply, for a combined 11.625%. Paterson doesn't fall under the Meadowlands Regional Hotel Use Assessment, and it's excluded from the state's municipal occupancy tax because it has separate statutory authority to run its own hotel tax, though no evidence of Paterson actually having adopted one turned up in its municipal code. Airbnb and Vrbo collect and remit the state taxes automatically on most bookings.

What happens if you run an unattended short-term rental in Paterson's banned zone?

Penalties reach up to $2,000 per violation, or the maximum allowed under New Jersey's general municipal penalty statute if that's higher, plus up to 90 days in jail, and every day the violation continues counts as a separate offense. The Police Department, Community Improvements Division, Historic Preservation Division, and Planning and Zoning Division can all enforce it, and liability can extend to the lessee or the paying guest, not just the property owner.

Last verified: July 2026. Every ordinance, tax rate, state law, and contact detail in this guide links to or comes from its official source.