MOUNT PLEASANT — New limits and regulations on short-term rentals, such as those listed with Airbnb and Vrbo, are on track to begin in August in South Carolina's fourth-largest city.
Located between the Charleston peninsula and the barrier islands Isle of Palms and Sullivan's Island, Mount Pleasant has become a popular place for property owners to rent homes or bedrooms by the night or weekend. It's been an unlicensed and largely unregulated business here, but that's about to end.
Pending rules endorsed Tuesday night by Town Council would limit short-term rentals to no more than 1 percent of dwellings in the town — that would allow about 400 — and would prohibit them entirely in apartment and condominium complexes and in communities where homeowner associations prohibit them.
Software used by the town to identify short-term rentals has shown that there are plenty of them operating in apartment and condo communities, and in subdivisions where they are prohibited. Such properties would be unable to get permits from the town, under the pending regulations.
Rentals must have local managers, who could be the property owners, and there would be rules about parking, fire safety, and town ordinances. If owners of a short-term rental property are unable to be on-site within 60 minutes, in case of an emergency, they would have to hire a manager who could be.
The regulations follow years of debate and are less strict than those proposed earlier this year. Gone is a rule that would have limited short-term rentals to one per block, and a prohibition on townhouses being used for short-term rentals.
Some owners of short-term rental properties objected Tuesday. Zachary Moore said the rules would benefit hotel companies while limiting his rights.
"This ordinance will not accomplish any of the things it claims to do," Moore said. "I ask that you reject what I am calling the 'Joe Bustos hotel corporation protection act,' and stand for freedom."
Bustos, a town councilman, led the effort to create the new rules. Town Council voted 7-1 to approve them Tuesday, and a final vote is expected in August. Councilman Kevin Cunnane cast the lone opposing vote, primarily because he thinks the town should require fire safety inspections in the new rules. Councilwoman Guang Ming Whitley was absent.
“This was based on something that was recognized as a need," Bustos said. “This gives us a way to at least have a handle on short-term rentals in the town; where they are, that they are licensed, that they are paying taxes."
Readers of Travel + Leisure magazine has named Charleston the top city in the U.S. for seven years in a row, and the millions of tourists visiting the area create great demand for short-stay properties. Some local entrepreneurs have even offered boats as short-term rentals.
Mount Pleasant would allow short-term rentals only in residential dwellings. The town recently began requiring business licenses for the owners of fewer than five short-term rental properties, and soon permits could also be required, along with $250 in application fees.
Some residents said the rules don't go far enough and complained that short-term rentals disrupt their neighborhoods.
"Nobody wants to be next door to a short-term rental," said Amanda Snedeker, from the Village Square subdivision.
Issues of housing affordability also have played a role in the years-long discussions. Owners of short-term rentals have said the income has allowed them to afford to live in Mount Pleasant, or avoid bankruptcy during the Great Recession. However, when residences are used like hotels, that reduces the number of homes that people could buy or rent, potentially driving up prices.
The town plans to hire a full-time staffer to enforce the new rules, which could be challenging. The town has prohibited short-term rentals in the Old Village Historic District since 2008, and many communities currently don't allow them, but the rentals turn up in those places nonetheless.
The city of Charleston has been aggressively enforcing its recent regulations, issuing fines and taking property owners to court.
“We tried to learn from Charleston and other places that have gone through the learning curve," Bustos said. "There may be changes that have to be made, but we’re hoping that will be minimal."