Does anyone have any additional insight on this article from Charlotte Axios? Would be a bummer if ABNB was eliminated or restricted futher due to local ordinances.
I've done some fairly extensive research into this. As written, it's actually very reasonable. The most restrictive part is that there has to be parking for one car per bedroom, complete ban on parties (although what constitutes a "party" is pretty unclear but it seems they're trying to avoid noise complaints, excessive parking and etc..), and there is a 400 ft minimum radius around STRs as to not interfere with density and concentrations of STRs.
In my opinion, it's actually quite fair. This article seems to take issue with it, but the goal of the legislation actually has little to do with STR's, it's a complete re-write of ALL zoning in the Charlotte City limits to expand it's definitions, and thus, it included STRs. It doesn't seem to me to be a "crack down" at all, more just a clearly defined outline of what is allowed in general, and what isn't. If you want to look at a REAL case of a town crack down on STRs, look no further than Asheville, NC where they made a permitting system that is almost impossible to obtain. Or perhaps Wilmington where the total ban on STR's lead to a lawsuit that is pending in the NC Supreme Court. Unless they dramatically increase taxes later, or make the permitting process insanely cumbersome, the legislation doesn't seem that bad to me.
Interesting article @Brian Schuler. I wonder if there is any national-level short term rental lobby group that is opposing some of the more restrictive STR proposed ordinances in a professional and organized way rather than just city-by-city? Part of lobbying is also to educate elected officials on the benefits, not just the drawbacks. The biggest objections I'm seeing from what I've been researching seems to come down to: party houses, noise complaints in otherwise owner-occupied neighborhoods, parking problems and investors driving up the cost of housing for locals. There must be a way to address these legitimate complaints for the benefit of the STR owner community. Perhaps Avery or @Luke Carl or others from the Short Term Shop have some info about that?
I've done some fairly extensive research into this. As written, it's actually very reasonable. The most restrictive part is that there has to be parking for one car per bedroom, complete ban on parties (although what constitutes a "party" is pretty unclear but it seems they're trying to avoid noise complaints, excessive parking and etc..), and there is a 400 ft minimum radius around STRs as to not interfere with density and concentrations of STRs.
In my opinion, it's actually quite fair. This article seems to take issue with it, but the goal of the legislation actually has little to do with STR's, it's a complete re-write of ALL zoning in the Charlotte City limits to expand it's definitions, and thus, it included STRs. It doesn't seem to me to be a "crack down" at all, more just a clearly defined outline of what is allowed in general, and what isn't. If you want to look at a REAL case of a town crack down on STRs, look no further than Asheville, NC where they made a permitting system that is almost impossible to obtain. Or perhaps Wilmington where the total ban on STR's lead to a lawsuit that is pending in the NC Supreme Court. Unless they dramatically increase taxes later, or make the permitting process insanely cumbersome, the legislation doesn't seem that bad to me.
Good thoughts, @Levi Bennett. Over here in Asheville we indeed have many restrictions, but only inside city limits. Basically, 2/3 of so of the City. Inside that area, you can't rent out an entire home STR. You can rent a bedroom or basement, but with some limitations. The two bills birthed by Wilmington's whacky approach, which have already passed the NC House, could of course soon end Asheville's ability to regulate STR's. But not too many of us local STR investors look at that as a good thing. We have a large inventory of whole-home STR's just outside City limits, and quite an affordable housing crisis. Lifting the restrictions would likely hurt quite a few existing STR owners (i.e., increased volume would drive down nightly rates), and would make it all the harder for people that work here to live here. Charlotte is surely a far different market than Asheville. I used to live there myself. But perhaps like Asheville some regulations will serve as a good barrier to entry and a protection for STR owners outside the geographical boundaries.
Thanks for your reply Levi. The 400 ft radius is the interesting part to me as the parking and party ban shouldn't impact me. I have two parking spaces for the two bedrooms and do not allow parties. My property is a tonwhome (HOA allows STR) and I can see two or three units in the community currently hosting on ABNB in addition to me. Given the size of the community, it is possible the other units are 400 feet away, but I have no way to tell that for sure. When you look at the map on airbnb, the listing is not typically exactly where the location marker is, I assume for privacy reasons.
I will be interested to see how well they track and monitor the 400 ft radius rule in the proposed legislation.
Another thought on this -Do you think current hosts will be grandfathered in? Maybe no new hosts will be allowed to register if they do not meet the criteria? I am not sure how the city would decide who is allowed to host between two current hosts that were within 400 feet of each other.
@Brian Schuler I'm not familiar with current laws in Charlotte, but Austin cracked down on STR's about 5 years ago. They consider STR anything that is rented for 30 days or less. It has created a market for medium-term rentals that rent for 30+ days. The cashflow isn't as good as STR's but they are low maintenance and make a lot more than LTR rates. I have doubled my rents since switching from LTR to MTR. Hopefully you can do something similar in Charlotte!
Thanks @Conner Olsen! How do you find/identify folks who need MTR's? I started looking into this and saw that Nursefinders is a website that caters to fully furnished places for traveling nurses. Any other sites you know of?
@Brian Schuler I listed my property on Airbnb, VRBO, and Furnished Finders and have only had bookings through Airbnb. I think it's the go-to platform for most people!
@Conner Olsen to be clear, STRs are NOT illegal, or becoming illegal in Charlotte. @Brian Schuler as far as your question about enforcement, that's easy.. the permitting system is how they track and enforce the rules. Since this is a top-down re-write of all zoning in Charlotte, they'll be expanding this (and the GIS system) to include STR permits. You'll be required to have a permit, it'll be registered with the city, and when they upload it into the GIS, it'll be easy to know if it's within 400ft of another STR. Basically it'll be a race for applications if you KNOW you're within 400ft so I would be first in line to make sure I'm getting a permit lol.
@Levi Bennett Thanks so much! that is really helpful. There are a few STR's in my community but the community is pretty spread out so it possible they are more than 400 feet away. I will just need to keep an eye on this and be ready to move fast if the changes pass. Based on your research, does it seem like a done deal that these zoning changes will go into effect or is it possible there will be no changes?
@Brian Schuler this zoning overhaul is very high priority for the city of Charlotte. This co-insides with their new revamp of their 50-year plan and there are changes to the zoning coming one way or another. I don't see this getting avoided. Most of the other cities in the state have made similar changes to modernize their zoning, and Charlotte is no different. It's coming. Probably be in July when this all goes into effect.
Update on Charlotte Short Term Rentals. I received the below email today about the UDO:
"Recently the North Carolina Court of Appeals issued a ruling on the topic of short-term rentals in the case ofSchroeder v. City of Wilmington.
The City of Wilmington may appeal this recently issued ruling.
Additionally, City of Charlotte staff anticipates there may be state
legislation enacted regarding the regulation of short-term rentals.
In light of the current legal and legislative uncertainty surrounding the topic of short-term rentals, the Charlotte City Attorney's Office has recommended refraining from proposing any short-term rental regulations at this time. Due to this recommendation, the Planning, Design, and Development Department is removing all currently proposed short-term rental regulation language from the draft Unified Development Ordinance (UDO).
The
City Attorney’s Office will continue to monitor the courts and state
legislative activity on the topic of short-term rentals and can work
with City Planning Staff on drafting appropriate regulations once the
ability of local jurisdictions becomes more clear and certain."
Seems regulations are paused for now. Does anyone have any insight about what could be brewing at the State level?
@Lane C. Yes I manage myself. For a typical 3/2 in Austin right now I'm seeing around a 3% CoC and a 6.6% cap rate. Not great, but if I was to do a LTR it would be -17% CoC and a 1.2% Cap. The return will be higher but depends on your market what your CoC will be
@Brian Schuler Just an update on this.. because of the appeals issue that went to the Supreme Court in NC, the DA for Charlotte has advised them to remove ALL language restricting STRs in Charlotte city limits. Very positive turn of events for prospective STR buyers inside city limits!
@Bonnie Low yes there is a national group that works on all of our behalf. At the VRMA conference over $400K was raised. They work with lobbyist, counties, cities, property managers etc to protect travelers’ rights to choose the type of accommodation they want, protect the rights of property owners to rent their vacation homes, and protect businesses’ rights to rent vacation properties. You can see the site at https://www.vrmaadvocacy.org/.
If your city is not effected yet it will be in some fashion in the future. Maybe something like property taxes double due to a new classification causing the amounts to increase. Very important to work together on this.