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City Council advances regulations on short-term rentals

Staff //February 28, 2018//

City Council advances regulations on short-term rentals

Staff //February 28, 2018//

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Charleston City Council passed the first reading of a proposed ordinance that would legalize short-term rentals across the Holy City.

The 11-2 vote came after 90 minutes of public comment on the issue and over an hour of discussion among City Council members.

Proposed regulations

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.

Proposed 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 and a separate business license. Hosts must list their permit number on all advertisements of their rental unit and display their business 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 per bedroom, with all parking on the property where the short-term rental is proposed. For Class 1 and Class 2 rentals, the second bedroom rented is exempt from this requirement. For Class 3 rentals, the first bedroom is exempt.
  • Class 1 properties must be listed on the National Register of Historic Places to be used as short-term rentals, and Class 2 and Class 3 short-term rentals must be in a structure that’s 50 years or older. City Council is planning to look at this age requirement during the March 13 workshop.
  • 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.

No changes have been made to city ordinances. City Council must read the ordinance two more times before any changes are made.

“Let’s keep this moving forward,” said District 8 Councilman Mike Seekings, who brought up the motion to pass the first reading. “It’s been a long time. … This isn’t going to be perfect, but we’re heading in the right direction here in the city, and we’re not rushing into anything.”

City Council is planning to hold a two-hour workshop before the March 13 City Council meeting, when the ordinance will receive second reading, to work through the ordinance and get a better understanding of what they’re passing. A proposed ordinance must be read three times before becoming part of the municipal code.

“I view this as being on a balance beam of livability for our neighborhoods, which is critical, and the reality of what’s going on in this shared economy as it has developed,” Mayor John Tecklenburg said.

The proposed regulations came before City Council after over a year of work by the 18-member Short-Term Rental Task Force and four months of work by the city’s Planning Commission.

The ordinance advanced by City Council is based on recommendations from the task force, disregarding changes made by the Planning Commission that included allowing a third party to manage rental units for 72 days a year and allowing two people per bedroom instead of the task force’s recommendation of four people total per rental.

The task force had also suggested a 50-year age requirement on the structure being rented, which District 1 Councilman Gary White Jr. took issue with.

“By making it a 50-year number or age, that disqualifies every single property on Daniel Island, and subsequently the majority of Cainhoy, or what will be the Cainhoy peninsula,” White said.

City Council agreed to look at the age requirement during its workshop.

City staff had recommended that council adopt the task force’s recommendations, because staff believes it will be easier for the city to enforce.

“We think that we need to begin enforcement, test our enforcement ability, make sure that we can do this right,” Planning Department Director Jacob Lindsey said. “And then if we open this up later on, we need to already have gotten some good, solid enforcement under our belt.”

He added that city staff thinks it’s important to revisit the ordinance after a year to report back on its effectiveness; Seekings included that his motion.

District 3 Councilman James Lewis Jr.’s motion to defer the issue and take more time to review it failed on a 4-9 vote. Lewis had argued that City Council needed to make sure that current ordinances outlawing short-term rentals could be enforced before passing new ordinances regulating them, but the majority of City Council and the city’s Livability and Tourism Department disagreed.

“It’s not being enforced because it’s too difficult to enforce,” said department director Daniel Riccio.

Riccio said that current city regulations would require a city staff member to book a short-term rental room and witness the property owner breaking the law, and with hundreds of illegal short-term rentals in Charleston currently operating, that process is too burdensome.

In the proposed ordinance, the city will hire three livability staff members who will be dedicated to short-term rentals, and software will be used to track who’s running short-term rentals and to help create cases against the unlicensed operators.

“The short-term rental software is instrumental in developing, locating, documenting the locations for us,” Riccio said. “It makes it much easier and effective to enforce the rules.”

Councilman William Dudley Gregorie of District 6 suggested passing just the enforcement part of the ordinance to test it using the city’s current regulations, but he never made a motion to that effect.

Before taking the vote to pass the first reading, Tecklenburg thanked everyone who voiced their opinion.

“The key thing is to have something that’s predictable and enforceable, and I think these recommendations, for the most part, give us the tools to do that,” he said.