Picture two four-bedroom houses inside the Arrowhead Lake gates. They have the same beaches, the same three heated pools and the same Lodge, and each owes the association the same $2,070 a year. Under the written rules, one can host 10 overnight guests and the other can host 12. A house's guest limit depends on its location, and nothing on the listing sheet will show you which limit applies.
The reason is a municipal boundary that runs through the community. The Arrowhead Lake Community Association tells owners who want to rent that they must first get a permit or license from "your respective Township (Coolbaugh or Tobyhanna)," and only then apply for an ALCA rental permit. Monroe County's Coolbaugh Township profile lists Arrowhead Lake among that township's communities. The association gives its Welcome Center address as 961 Arrowhead Drive, Pocono Lake. Each township has its own short-term rental ordinance, and they differ on nearly every point that limits revenue.
The association enforces the township's number at the gate
ALCA sets its own rules, but it also enforces the township limit at the gate. Since the association switched to the ABDi access system in March 2025, each registered renter age 6 and up gets a QR pass in place of a wristband or gate card. The association says the number of passes "can not exceed the occupancy limit on the properties township permit," and that the limit covers all overnight guests. If a township permit allows eight, ALCA registers eight. An extra guest can't be added at check-in at the MSB/Welcome Center at 961 Arrowhead Drive, which is open 10 a.m. to 10 p.m. daily. The old off-site rental office at Liberty Plaza on Route 940 closed permanently on March 28, 2025.
So the township formula sets the most guests a booking can include. The two formulas are:
- Tobyhanna Township, §114-8A: "two per bedroom plus two," as amended February 20, 2024, by Ord. No. 577.
- Coolbaugh Township, §324-10A(1): two persons per bedroom plus four, never more than 14 per residence, with infants under two not counted.
Here is how the formulas work out by bedroom count:
| Bedrooms | Tobyhanna max overnight | Coolbaugh max overnight |
|---|---|---|
| 2 | 6 | 8 |
| 3 | 8 | 10 |
| 4 | 10 | 12 |
| 5 | 12 | 14 |
| 6 | 14 | 14 |
For the most common Pocono layouts, two to four bedrooms, Coolbaugh allows two more guests. At five bedrooms the gap is still two. At six it closes, because Coolbaugh's cap of 14 matches Tobyhanna's formula. Both townships require the permitted capacity to appear correctly in every listing and ad.
Association costs don't change with the township. Posted dues are $2,070 for a house and $1,035 for a lot, plus a capital improvement fee of $2,030 for a house and $508 for a lot, according to ALCA's FAQ. When two houses carry the same fixed costs and one can sell two more beds a night, the difference goes almost entirely to that owner's bottom line.
The septic permit decides how many bedrooms count
The formula only applies to bedrooms the township recognizes, and both townships tie that count to sewage capacity. This is where the paperwork matters most.
In Tobyhanna, the township verifies bedrooms "by the septic permit or other means." Rentable bedrooms can't exceed the number approved on the sewage permit. If there's no sewage permit on record, the rental is limited to three bedrooms unless the owner shows the system can handle more flow. Under that text, three bedrooms works out to eight guests.
Coolbaugh asks every short-term rental to prove its sewage system is adequate, either through approval by the Sewage Enforcement Officer or an acceptable prior permit. It caps bedrooms at the sewage permit or at whatever the township's own on-lot septic inspection approves. It also rules out one setup entirely: "No short-term rental shall be permitted within a dwelling unit that utilizes a sewage holding tank." Coolbaugh additionally requires at least one other habitable room of 120 square feet or more.
In both townships, a sewage malfunction stops rentals until the system is fixed. ALCA adds its own check. Homes not on the association's sewer system must submit a septic inspection report and proof of pumping with the ALCA permit application.
The driveway can lower the count further
Coolbaugh's higher guest count comes with a parking requirement Tobyhanna doesn't have. Coolbaugh requires at least one parking space per bedroom on the owner's property. Each space must be at least 9 by 18 feet, surfaced "to a mud-free condition" with paving or stone, and counted toward the zoning ordinance's lot coverage limit. Total vehicles for overnight and day guests can't exceed the designated spaces. Day guests are capped at 75 percent of overnight occupancy.
Tobyhanna limits renters to the parking available on the property and bans parking in any street right-of-way or on lawns and vegetated areas. It doesn't set a per-bedroom minimum. For a four-bedroom house on the Coolbaugh side, that means four designated, improved spaces have to be listed on the license.
The response-time rule matters most to remote owners
For out-of-state buyers, the biggest difference may be who has to show up when a guest calls. Tobyhanna's §114-8H requires a person in charge who lives or has an office within a 30-minute drive of the rental and can be there within 30 minutes of notification. That person also serves as the owner's legal agent.
Coolbaugh requires 24-hour phone availability, arrival within two hours, and a response to a township official within one hour. Its ordinance doesn't set a distance limit. Tobyhanna's text ties the contact to a 30-minute drive. Coolbaugh's ties the contact to response times.
Tobyhanna adds terms Coolbaugh's version doesn't state in the same way. The person signing the rental contract must be 25 or older. The owner must carry at least $500,000 in liability insurance for commercial short-term rental use. The owner must also show a Monroe County license and a Pennsylvania Department of Revenue license to collect and remit sales tax. The Tobyhanna Township STR page links the current affidavit, a 2026 PA sales tax self-declaration and the Monroe County hotel excise tax application.
Inspections, fees and three separate penalty counts
Coolbaugh inspects before the first license and again at every renewal. A separate on-lot sewage inspection can lead to denial or nonrenewal. Its published checklist covers the 911 address sign, decks, rails and exits, smoke and carbon monoxide detectors, fire extinguishers, GFCI outlets, the dryer vent, septic maintenance and required posted documents. The township's STR page lists a $200 initial application, a $150 annual renewal and a $40 reinspection fee when deficiencies turn up.
Tobyhanna permits run up to one year on a rolling basis, and the Board sets fees by resolution. Since March 6, 2023, any review past the third has cost an extra $200. The township may inspect to verify compliance, and in specified safety cases it can inspect interiors on 48 hours' notice.
Penalties are tracked on three separate counts:
- Tobyhanna fines at least $500 per violation plus court costs and attorney fees, with each day counted as a separate violation. Repeated or uncured violations within a rolling year can lead to revocation, with a one-year bar and a three-year bar after that.
- Coolbaugh allows fines up to $1,000 per day. Three convictions in 12 months bring a one-year revocation, a fourth can make revocation permanent, and a sewage violation can trigger immediate revocation.
- ALCA cites the homeowner, not the guest, with a "Failure to Comply" citation for renter violations such as fireworks, illegal dumping or unregistered guests. A third penalty on the same property suspends that property's ALCA permit for 90 days. Each conviction clears after 12 months without another.
So one bad weekend can count against the owner with the township and the association at the same time.
What the association adds on top
ALCA's own rules apply on both sides of the line. Every rental must be at least two nights. Registrations close one day before arrival, and registrations made inside 72 hours carry a nonrefundable late fee. The homeowner pays in advance for each renter's guests age 6 and up, who are charged a daily temporary-membership fee, and for each vehicle, which is charged a gate-access fee. If the township permit lapses, any booked registration is canceled. Each rental property needs its own ALCA permit, which runs one year and currently costs $100.
Buyers can't tour the community on their own. ALCA requires a licensed real estate agent to accompany prospective owners to get a gate pass.
Quick answers
Are occupancy limits ever changed for a single property? Monroe County posted notice of a Coolbaugh Township hearing set for September 29, 2026, on one property's request to modify its short-term rental occupancy limits.
Does Tobyhanna cap the number of rentals? The ordinance gives the township authority to limit short-term rentals to a percentage of homes, but the chapter doesn't set a number. Tobyhanna said in late 2022 that no limit had been set on permits.
Do long-term tenants follow the same process? Tenants with leases of six months or longer get a photo ID. Shorter stays get the same QR passes as short-term renters.
This post is general information, not legal, tax or financial advice. Ordinances and association policies change, so confirm the rules for a specific property with the township, ALCA and the right professionals before relying on them.
At Live Free Listings, we start an Arrowhead Lake underwriting with the township, the sewage permit and the parking pad, because those set the guest count that every revenue projection depends on. Schedule a free investment review and revenue estimate, and we'll build the numbers around the rules that apply to the house you're considering.
