Short Term Rentals (copy) (copy)

Short-term rentals have only been allowed in downtown Charleston's Cannonborough-Elliottborough neighborhood, until now. Brad Nettles/Staff/File

Four years ago, as short-term rentals were just sprouting up throughout Charleston, one of the city’s only options to enforce its ban on them was to set up online sting operations.

A handful of livability officers would pose as visitors on booking platforms, such as Airbnb and HomeAway, to find listings where short-term rentals weren’t allowed.

As the industry expanded to nearly 2,000 properties across the Charleston area, the city didn’t have the time or the resources to keep up with the rampant violations. Only 77 cases have been successfully prosecuted to date.

After a year-long process to rethink the city’s strategy, the free-for-all is coming to a close.

Charleston City Council finalized a new set of rules Tuesday that allows short-term rentals citywide, but only under strict circumstances. It bans whole-home rentals and requires property owners to stay home whenever they host guests.

The ordinance was carefully designed by a resident-led task force over the past year to give the city the tools it needs to finally get a grip on the industry.

"We’ve had a system that is basically unenforceable, or difficult to enforce," said Mayor John Tecklenburg. "I believe having this system in place is going to deter people who are illegally doing STRs."

But the city will continue making adjustments to it as needed. Moments after approving the ordinance, council directed the planning staff to create a process for people to make a case for a special exception if they're considered ineligible for a permit under the new rules. 

Councilmen Dudley Gregorie and Keith Waring said they were particularly concerned about a James Island woman who wouldn't be able to operate a short-term rental on a 1-acre property her family inherited. 

Staff could bring back a list of special exceptions by the end of next month.

Some of the short-term rental rules that would apply in all cases include the following:

  • Operators must obtain a special license from the city's Department of Planning, Preservation and Sustainability and list the registration number on all online advertisements. They will have to present site plans to identify where guests would stay and park their cars. 
  • To be eligible, operators must own and live on the property full time, determined by the 4 percent owner-occupied property tax assessment.
  • The short-term rental cannot host more than four adults at a time.
  • Operators must pay business license fees and accommodations taxes. 

It creates separate sets of rules for three different areas:

  • Category 1 includes the Old & Historic Districts on the lower peninsula, but only properties listed on the National Register of Historic Places are eligible for a short-term rental permit.
  • Category 2 is for the rest of the peninsula, where properties have to be at least 50 years old. The class does not include the Cannonborough-Elliottborough neighborhood because it already has short-term rental rules in place.
  • Category 3 spans the rest of the city beyond the peninsula, where there will not be an age limit on properties.

There will be a 90-day grace period before the rules are enforced so city staff can implement a new enforcement apparatus.

Three new enforcement officers were recently hired in the livability department specifically to monitor short-term rental compliance. 

They will use a data-scraping software to gather information from online listings, such as bedroom counts and addresses. Many platforms conceal information that identifies hosts and their properties.

The city might hire a part-time lawyer to help with the caseload if necessary, Tecklenburg said. 

Still, Councilmen Robert Mitchell and James Lewis voted against it, arguing that they weren't convinced it would be any better enforced than the existing ordinance.

While neighborhood leaders and members of the Short-Term Rental Task Force urged council to adopt the ordinance, rental operators felt it was unfair.

Ginger Blaas said the city should be limiting short-term rentals by putting permit caps on neighborhoods. Otherwise, property owner rights would be infringed upon, she said.

"In general, this ordinance is too long, too confusing, and people in this industry still have so many questions," she said.

Phyllis Ewing of the Charlestowne Neighborhood Association, which is in Category 1, disagreed.

"Nobody is depriving you. You bought into a residential neighborhood," she said.

City Council will re-examine how the process is working nine months after it's implemented.

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Reach Abigail Darlington at 843-937-5906 and follow her on Twitter @A_Big_Gail.