Short Term Rentals (9/18/22)

At a recent Town Council Workshop (8/25) our town attorney updated us on the current legal status of Short Term Rentals (STRs) in North Carolina. She told us about decisions made in courts in North Carolina regarding what we can and cannot do in regards to STRs.

Naturally some people took this to mean that we are considering new laws, regulations, etc… Uh no, we’re just doing our jobs. We research and explore all options to understand the legal framework of things. We discuss the issues amongst ourselves in a public forum.

We’re hearing from citizens the same concerns people have in resort areas all over the country. Namely that STRs bring noise and traffic to previously quiet residential areas and that STRs are contributing to the high cost of living that’s driving regular-folk renters out of these towns. (These regular-folk also being the ones who work in the local businesses.) If you think that’s all a crock of shit, then ok, I won’t argue with you. I’m just saying that we hear the concerns, and we would be derelict in our duty if we didn’t look into things.

Disclaimer: I (with a partner) own a few rental properties in and around Carolina Beach. We do not have any short term rentals.

The Housing Issue

My house is at 5^th and Augusta and holy crap it has turned into AirBnB-land overnight. A house that was a small family home… AirBnB. A triplex that used have long-term renters… 3 AirBnBs. A brand new duplex… 2 AirBnBs. A house with a mother-in-law suite… 2 AirBnBs. There’s a triplex across the street with long-term renters. Will they be kicked out next? I hope not, because I like these people.

I’ll just say it… long-term renters are being pushed out of CB by STRs. I don’t think it’s debatable. It’s simple economics. If a person can make more money operating their property as a Short Term Rental, then the average person will probably choose that option. That leads to fewer long-term rentals and higher prices for the ones that are left. But it’s not just STRs making the long-term rentals so scarce. People are moving here in droves (perhaps you’ve noticed) and that’s part of the reality too.

I’ll also say this… I hate it. It breaks my heart that regular-folk are being forced off the island. If my friends across the street get booted it will be their loss, my loss and the community’s loss. It makes me sad.

It’s also a looming problem for local businesses. While more and more businesses are opening, the housing inventory for lower income workers is diminishing rapidly. I won’t pretend that my graph (pictured below) is scientific, but it’s how I see it. I suspect that most local business owners would agree that we’re already in the trouble zone. (I’ve talked to business owners in Monkey Junction who say that their employees can’t afford to live close to work.)

The Quiet Enjoyment Issue

Has the change in my backyard affected me personally? Not really. I’ve barely heard a peep out of any of the 5^th & Augusta places. And to be perfectly honest, the houses all look much better now. Fresh paint, repairs, landscaping… that sort of thing.

But I don’t think everyone has been as lucky as me. I’ve heard too many stories, from too many people. Cars parked all over the place, golf carts on the sidewalks, loud music on weeknights, and trash cans left out are the common complaints. It used to be if you wanted to stay away from tourists, you moved to 4^th Street or further west. Just stay off the north end, or few blocks back from the beach and you were good. Not anymore. STRs are popping up all over.

Limitations to Our Authority

Understand that I’m quite libertarian in my beliefs. I think people should be able to do with their property what they want, so long as it doesn’t cause other people problems. And I’m very hesitant to restrict private property rights. Which is a good thing, because recent North Carolina court rulings have opposed local governments placing special restrictions on STRs. Wilmington and Southport tried it and they were told that restrictions were illegal… and it cost Wilmington a lot of money to find out!

Check out this link from WECT

I don’t want that for Carolina Beach.

We can’t expect a short term rental to follow rules that aren’t the same as any other property in the same zoning district. For instance, we can’t require more parking or a 6’ fence just because the house is used as an STR.

My understanding is that we could outright ban STRs in certain zoning districts, but even if we did, any current STRs would be grandfathered in. Such a ban would offer no relief to someone already being bothered by a poorly run STR.

What To Do – The Quiet Enjoyment Issue

In my opinion, if the STRs behind my house don’t bring noise, clutter, traffic and other nuisances to my neighborhood, then it really shouldn’t be my business. But if they do bring those things… well, we already have the answer. It’s called our Code of Ordinances. Rules that we all must follow so that we don’t impede on our neighbors’ rights to enjoy their lives.

We have ordinances about excessive noise, returning trash cans and parking on town roads. (The three basic complaints.) Let’s enforce them. My understanding is that noise ordinance violations result in fines paid by the property owner. So if a particular property is a repeat offender, the owner will get sick of paying the fines and they’ll be more cautious about who they rent to.

Parking violations are paid by the car owner. If they’re getting parking tickets because the rental property doesn’t have enough spaces… the owner is going to hear about it!

I’m reminded of the “wedding house.” A few years ago a large house was marketed as great place to host your wedding. Loud parties ensued with lots of cars parked up and down the street. People called for a new “no wedding houses” ordinance. That’ll stop ‘em!

Well, a new law wasn’t needed. Town police started enforcing the parking violations and viola! Problem solved. Enforcing our current ordinances works. If you’re being bothered, you have to contact code enforcement. You can call the CB Police Department non-emergency line at 910-452-6120, CB Code Enforcement at 910-458-2999 or register a complaint online at:

https://www.carolinabeach.org/i-want-to/request-service

I have suggested that STRs be required to have a sign with the phone number or email to the property manager. Why? Because I suspect the problem houses are owned by people so far away that they just don’t know there is an issue. If they heard from their neighbors they would better understand what is going on here. Call me optimistic, but I believe that people generally want to do the right thing. If they know they’re being a problem they’ll probably change their ways. It’s not about NARCing on your neighbor… it’s about letting them know there is a problem.

What To Do – The Housing Issue

As for the housing shortage… I don’t see what Town Council could (or should) do about it. It’s a matter of macro-economics and we can’t change that. We’ll have to let the free-market sort it out. Businesses will do what they do best, adapt to new circumstances.

I’m not saying I’m opposed to any action, it’s just that I don’t see what action is appropriate.

My Prediction

Look, I quit fantasy football years ago because I’m terrible at predictions, but I’ll try anyway. STRs aren’t going away because a) they’re profitable; and b) more and more people all over the country can afford a second home at the beach. And if you have that second home, you might as well bring in a little money while you’re at it.

But it also seems to me that there’s a lot of inventory out there. I suspect that some of these places further from the beach will eventually revert back to regular housing. But it won’t be cheap.