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Charleston City Council approves short-term rental ordinance

Staff //April 11, 2018//

Charleston City Council approves short-term rental ordinance

Staff //April 11, 2018//

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Charleston City Council has approved a short-term rental ordinance after years of work. (Photo/file)

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The ordinance passed by City Council is based on recommendations from the Short-Term Rental Task Force, including a three-tiered class system depending on where a property is located. Class 1 encompasses the area zoned as the Old and Historic District; Class 2 covers the area zoned as the Old City District; and Class 3 is the rest of the city.

Rules include:

  • Properties must be owner-occupied primary residences, as determined by the 4% owner-occupied property tax status.
  • All hosts must apply for a short-term rental permit annually. Hosts must list their permit number on all advertisements of their rental unit and display their license within the property.
  • Hosts must be on the property overnight when guests are present.
  • Only four adult guests are permitted to stay per short-term rental.
  • Short-term rentals must provide one off-street parking spot in addition to any parking requirements for the residential use.
  • Class 1 properties must be individually listed on the National Register of Historic Places to be used as short-term rentals, and Class 2 short-term rentals must be in a structure that’s 50 years or older. Class 3 properties have no age requirement.
  • Hosts must carry $1 million in liability insurance.
  • The Cannonborough-Elliotborough neighborhood, which falls under short-term rental regulations that were passed in 2012, is currently excluded from the proposed new regulations. Existing bed-and-breakfast facilities are also exempt from the proposed regulations.

The regulations will take effect in 90 days. City Council also plans to review the ordinance and its enforcement nine months after it takes effect.

Charleston City Council has approved an ordinance legalizing residential short-term rentals across the city almost two years after the city officially embarked on the process.

The 11-2 vote of both the second and third readings of the ordinance came after a month and a half of discussion by Charleston City Council over the course of three meetings and a workshop. The ordinance was also the subject of six Planning Commission meetings and over a year of work by the 18-member Short-Term Rental Task Force.

The ordinance is similar to recommendations made by the task force, after City Council undid the Planning Commission’s changes in February. Short-term rental operators will be required to obtain a special license from the city’s Department of Planning, Preservation and Sustainability and renew their license annually. Operators will have to own and live on the property full-time, as determined by the 4% owner-occupied property tax assessment. The short-term rental will only be allowed to host up to four adults at a time, and operators will be required to pay business license fees and accommodations taxes to the city.

The biggest difference in the City Council ordinance is removing the age requirement for Class 3 short-term rentals. The task force had recommended a 50-year age requirement, but City Council struck it, fearing that it would be too restrictive on West Ashley and James Island.

Councilman Perry Waring, who represents District 7, introduced a motion shortly after the ordinance passed instructing staff to create a special exception process for second homes, defined by the 6% property tax assessment, commercially zoned properties which could be used as short-term rentals, and potential “whole house” rentals, meaning that the owner of the property is not on-site.

Councilwoman Carol Jackson, who represents District 12, also asked that there be a special exception process for properties in the Old and Historic District to become short-term rentals even if they are not individually listed on the National Register of Historic Places.

The ordinance will not take effect for 90 days to allow the city to put into place its enforcement mechanisms, which have been a concern among citizens and city council members. Livability and Tourism Department director Daniel Riccio has said the current ordinance is too difficult for the city to enforce.

With the new ordinance, the city is planning to purchase software that will help track short-term rentals across all online platforms, as well as hire three compliance officers focused on enforcement of the short-term rental ordinance. Two employees have already begun working; the third will start next week.

Additionally, City Council asked city staff to come back nine months after enforcement has begun to report on progress made and assess the viability of the ordinance.

“As we go along, we’ll continue to talk about this, and we’ll amend this thing,” said District 10 Councilman Harry Griffin. “We’ll have stuff come up … but as we go along, we’ll amend this.”

Any special exception process will have to be heard by the Planning Commission and then City Council before it is put into effect. Mayor John Tecklenburg said the special exception process could be heard by City Council as early as next month, which would allow for it to be added to the regulations before the 90-day period is over.

In a blog post, Historic Charleston Foundation expressed reservations about special exceptions, fearing that exceptions could weaken protections for the core of the historic district, as well as protections against investment groups buying property for the sole purpose of short-term rentals. Manager of advocacy for the foundation Chris Cody was on the short-term rental task force.

“The Foundation will continue to advocate for the protection of the city’s neighborhoods and residential quality of life and oppose the ‘special exception’ motions until the matter is concluded,” the post said.