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Short-Term Rentals

​Cities Craft Tailored Regulations

As part of a growing sharing economy of online platforms used to buy and sell, services like Airbnb have dramatically altered the world of short-term rentals for cities and towns.

Even before Airbnb became a household name, some local governments, like Folly Beach and Mount Pleasant, were studying the issue. These municipalities shared their experiences at the Municipal Association's 2019 Annual Meeting.

Spencer Wetmore, city administrator for Folly Beach, said her community has long had short-term rentals as a fact of life. Even so, she said, its residential community has a life of its own, and so the city, in crafting an ordinance, sought to help the renters "to be good neighbors."

To accomplish this, Folly Beach staff and officials focused on things like special events for the rentals, disallowing amplified music and limiting gatherings at the rentals to no more than 49 people. The city also created a requirement that each rental property owner designate someone locally who can respond to calls about problems within 30 minutes. For about two years, they have enforced a four-strike policy for violations on a rolling six-month basis, although she said no one has approached that yet, as they generally make changes quickly after receiving the first warning letter containing suggestions on changes to make.

"In our experience, the people who are doing short-term rentals are generally not scofflaws trying to figure out how they can get around the rules and be the worst possible rental," she said. "They're not trying to host the MTV 'Road Rules' at their property. They want it to be a reasonable family vacation or a reasonable place for grandma and Aunt Stacy to stay during the wedding."

The city shares information with property owners to help make compliance easy, calling attention to the availability of noise meters the owners can use for monitoring, as well as services to put trash cans out at the curb. Wetmore said that communicating the expectations of renters in the original rental advertisements helps greatly.

She advised those entering into short-term rental regulations to budget for a substantial verification process in the first year. Software can help identify short-term rental listings within a city, but it can confuse properties with their neighbors or confuse upstairs or downstairs units.

Mount Pleasant Assistant Town Administrator Christiane Farrell described the recent regulation development process there. It began with research and public input meetings, but the proposed ordinance was not recommended by the Planning Commission because of remaining concerns of its members.

The eventual ordinance capped the number of possible short-term rentals at 1% of all dwelling units in the town — about 400 total. The ordinance received final approval in August.

Farrell said some regulation issues will be common for all communities, such as determining whether to allow whole-house and partial-house rentals, whether to create a cap on the number of rentals and whether to include fire code and parking requirements. Mount Pleasant, she said, was also concerned about the effect short-term rentals might have on affordable housing. Renting out part of a property could help people afford to remain in their houses, but at the same time, highly profitable short-term housing could be taking long-term rentals off the market.

She said that the entire regulation development process had seen strong and steady public participation.

"I have honestly never seen an issue that has been more 50/50 … I have never seen one where two sides have come up with equally good arguments and concerns that are legitimate," she said.

Learn more about the state regulations and tax treatments that impact rental properties in the article "A short guide to short-term rentals."