Market Check affordable 1f (copy) (copy)

Housing affordablity is a challenge on Charleston's peninsula. This recently built house is for rent off Rutledge Avenue near Mount Pleasant Street. Leroy Burnell/Staff/File

In tourism-driven cities across the country, online booking platforms such as Airbnb and HomeAway have all but erased the line between vacation homes and residential rentals.

Zoning rules that once kept them in separate districts have become practically obsolete as the listing services make it easier and more profitable than ever for homeowners to rent a guest house or spare bedroom to visitors.

Over the past few years, many homes traditionally rented by residents have been converted to short-term rentals. In popular neighborhoods, property owners can earn twice as much renting to visitors as they would leasing to long-term tenants, according to data from Airdna, a California-based consulting and analytics firm that tracks Airbnb rentals.

For historic cities like Charleston that are seeing a rapidly growing population and a shrinking supply of affordable housing, the explosion of short-term rentals stands to make a bad situation worse.

That fact hasn't been lost on the city's Short-Term Rental Task Force, a group of local historic preservationists, residents and real estate professionals who have worked all year on a new set of regulations for short-term rentals.

"It’s indisputable that short-term rentals raise the cost for housing in neighborhoods," task force member Kristopher King, executive director of the Preservation Society of Charleston, said.

The group's proposed ordinance is being reviewed by the Planning Commission, which ultimately could approve it, change it, or reject it altogether before it goes to City Council.

The ordinance would legalize short-term rentals across the city for the first time. Currently, the city only permits them in commercial areas of Cannonborough-Elliottborough downtown, but city officials acknowledge there are hundreds operating illegally across the peninsula, West Ashley, James Island, Johns Island and Daniel Island.

The new rules aim to better regulate them and ultimately ensure that short-term rentals don't outnumber residences. But some provisions meant to protect the local housing stock are unpopular with homeowners already operating short-term rentals. Others say they don't go far enough to truly keep residents from being priced out of their neighborhoods.

Under the new ordinance, the rentals would have to be owner-occupied, registered and licensed by the city so that they can be monitored.

Eligible homes would have to be at least 50 years old, to keep developers from building new units solely for short-term rental use.

The most controversial proposal would require hosts to be on the premises throughout their guests' stays. Whole-home rentals are the most popular type of rentals on all the platforms, primarily because hosts can rent out their houses while they're traveling themselves, and most guests prefer the privacy.

City Planner Jacob Lindsey said the provision is designed to protect the stock of housing available to residents. 

"When whole homes are listed as vacation rentals, those homes are removed from the rental market, which lessens supply and therefore drives up cost," he said. "If someone rents a spare room to a traveler, it doesn’t seem to remove housing from the system."

Rashaunda Grant, who uses her family's secondary home on James Island as a whole-home rental, argued against the rule at one of the Planning Commission meetings.

"We tried long-term rentals, and it was terrible," she said. "People were tearing up our home."

Property owners who live in duplexes or have accessory dwelling units such as granny flats would have an advantage because they can be rented as private units but would still be considered owner-occupied.

But Daniel Ravenel, a Charleston native and real estate agent who serves on the task force, said those are the types of units his company often rents to residents. Allowing them to be used for short-term rentals still would shrink residents' already slim housing options. 

"I wonder how many young people who work in the hospitality industry or who go to the College of Charleston or who intern at the Medical University, how many of those folks will be able to afford living on the peninsula with the pervasiveness of short-term rentals?" he asked.

Asheville, N.C., a nearby tourist destination also in the throes of an affordable housing crisis, does not allow hosts to use their whole homes or accessory dwelling units for short-term rentals. 

In New Orleans, whole-home rentals are only banned in the historic French Quarter. In other neighborhoods where they're allowed, they're multiplying rapidly.

Breonne DeDecker, who works for a community land trust and housing rights organization in New Orleans, has been tracking short-term rental listings throughout the city since 2014 with other volunteers. She said whole-home listings have increased by more than 120 percent in the past two years.

"You can get so much more money in New Orleans renting to a tourist than you can to a renter," she said. "We've lost almost 4,000 entire homes off the market." 

In Charleston, Lindsey said the city plans to hire a data analytics firm next year to get a deeper understanding of how short-term rentals affect the housing stock. That will indicate whether stricter regulations on short-term rentals are needed to preserve long-term housing, he said.

The Planning Commission will meet again at 3 p.m. Dec. 4 to review the short-term rental ordinance. The meeting will be held in the auditorium of the Charleston County Public Library, 68 Calhoun St.

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

Abigail Darlington is a local government reporter focusing primarily on the City of Charleston. She previously covered local arts & entertainment, technology, innovation, tourism and retail for the Post and Courier.

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