Planning board approves document of recommendations for STRs

After several meetings and hammering out of details, the Town of Highlands Planning Board approved, on Monday, to send a document of recommendations to the board of commissioners regarding short-term rentals.

The board was tasked with dissecting a draft proposal given to them by the town attorneys and a working group. After combing through the draft, the board ended up making recommendations that would allow short-term rentals in all zoning districts with limitations.

 

Public comments

Out of the three planning board meetings regarding short-term rentals, this is the first meeting where the public was allowed to comment.

Tucker Chambers with Chambers Realty said there wasn’t a problem with short-term rentals until the big companies, such as AirBnB and VRBO came into the picture.

“People not being local started running these houses,” Chambers said. “I was wondering if the homeowners’ associations were thinking about updating their restrictions and if the town would help them bring them up to date, instead of them causing a problem for the whole community.”

Chambers said in his experience with rentals, he has only had one complaint.

“There were only five complaints last year in regard to short-term rentals,” Chambers said. “Five complaints and all of a sudden we have $100,000 in legal fees. I think this is a little ridiculous for five complaints. I don’t think any restrictions should be made as far as rentals in each of these districts. I have been doing this since 1980, and I think most of the problems are because most of these homeowners are out of town. Somebody needs to be here in town in order to take care of the properties. If somebody is not in town, then they should have a two-week minimum. If there is somebody who lives in town then make it a three-night minimum, because we will be able to handle it. I think we only had one complaint in all of these years and that was because a wedding party in a subdivision. I’ve never had the police called or anything like that.”

Lila Howland said she believes she is the most affected by the board’s recommendations.

“From my perspective, your discussions have disregarded some extremely critical facts,” Howland said. “In August, the town attorney clearly stated that the current UDO prohibits short-term rentals in R-1 residential districts. More than 62 percent of those responding to the Community Plan survey identified STRs in residential neighborhoods as a significant problem that needs to be addressed. In the recent election, the three candidates who clearly opposed STRs in residential neighborhoods were overwhelmingly elected in a landslide. The town and its political leadership have a clear and compelling mandate from the voters to prohibit short term rentals in residential neighborhoods.”

Howland went on stating that there has been no public support to open all of Highlands’ neighborhoods to short-term rentals.

“Tourist homes have always been a clearly defined commercial use and have been prohibited in R-1 and R-3 zones and subject to significant restrictions in R-2 zones since the first Highlands zoning code was adopted,” Howland said. “Regardless of durational limits in any proposed legislation, whether one week or two weeks, the practical effort of these proposals will be to allow whole house short-term rentals every weekend in most neighborhoods.”

Regarding the planning board’s discussions, Howland said they have been focusing less on appropriate land use in highlands residential neighborhoods, and more on the ability of buyers to finance the purchase of single-family homes that will be converted into short-term rentals.

“Assuring an adequate income stream to obtain a mortgage for investors isn’t within this board’s responsibilities or a proper subject of Highlands zoning ordinances,” Howland said. “The planning board also seemed to focus on ensuring that there were adequate accommodations for the wedding industry, again something that is not within the board’s responsibility, especially when that proposal sacrifices all of Highlands’ single-family neighborhoods.”

In the end, Howland asked the planning board to defer to the board of commissioners instead of making recommendations.

“Given the fact that the planning board’s recommendations are contrary to the clear mandate of the public, as represented in the Community Plan survey and election results, I would ask that the planning board simply defer to the Town Board of Commissioners on this issue, rather than pass on recommendations that do not represent the public’s position on short-term rentals, do not solve any of the issues related to short-term rentals, and in fact, create numerous additional problems.”

Slocomb Howland bought his home in 1998 and said he assumed that since the home was zoned in R-1, it would be prohibited from any commercial activity.

“Commercial activity to me, means money was exchanged,” Howland said. “We did not anticipate that in our neighborhood. I think it is important to respect what we thought was a clear-cut residential area that prohibited commercial activity.”

Hickory Hill Road resident Michael King bought his home in 2001 and said back then he couldn’t fire a rifle and hit a short-term rental.

“In the last three years, we have had numerous people come in and they say that it isn’t a commercial activity, then why is the house in the name of such-and-such LLC?” King said. “To me, that is a commercial enterprise once you put it that way. In the original tourist home definition, it says that no one owner could have more than one tourist home in the town of Highlands. Why is it going to be different in transient dwelling unit? I know of at least one entity that has at least three in my neighborhood already. There is a fellow that has built two houses on a two-acre lot. One of the houses is a seven-bedroom, seven-bathroom house that he was able to build because it fit in the current watershed restrictions. Those things trouble me because I don’t have any idea what that is for. I asked him about it, and he said that he had a lot of friends.”

Kristy Favalli said that there is a lot of noise and misinformation going around about the STR issue.

“I think it can be very hard to simplify the issue with all of the static,” Favalli said. “Basically, when that static is drowned out, what it is boiled down to is a legal rights issue that the board is giving their stamp of approval on. Questions like, are the ideas that are being discussed align with the North Carolina Vacation Rental Act? Are the ideas being discussed align with the North Carolina State Law? For that reason, I commend the board for leaving the vested rights pieces to the attorneys. Having said that, there are a couple of questions in the proposal that I would like to illuminate so the board can take them into consideration moving forward. The first question, in section 4.7.1, I would like to see the town adopt better language around what is allowed for nonconforming uses. For example, currently the language is ambiguous around what changes can be made to still allow a nonconforming use. As currently stated, a repair would warrant an issuance of a zoning permit. What if a pipe burst on a weekend and you can’t wait for the town opening to issue a zoning certificate? What is the process for the town to allow or deny a zoning certificate? I heard Brad ask in a previous meeting, what are the unintended consequences, and in my mind, an unintended consequence of this is a lot of dilapidated properties sitting around because the owners are afraid to make the necessary repairs. Secondly, the zoning certificate being required as a guise for registration is prohibited by Senate Bill 483, which passed into law effective July 2019 and states, ‘cities and counties are not authorized to adopt or enforce any ordinance that would require an owner or manager of rental property to obtain any permit or permission from the local government to lease residential property. Lastly, trash and noise complaints are trivial nuisances to all of us regardless of the primary use of the residence and should be enforced as such. I don’t know a single short term rental owner that would disagree. It makes us all look bad.”

Jeannie Chambers with Chambers Reality addressed the LLC topic and said she believed the definitions of STRs are well-defined.

“In reference to the LLC, we have a few of our homeowners that are LLCs because they are a family renting their house,” Chambers said. “I think the terms transient and whole house short term rentals are well defined. Has anyone suggested STR monthly limits? If each property had a limit of three or four rentals per month, it would really reduce the number of rentals. They keep saying rentals coming and going every three days. We had two homes in 2021 - only two (and one isn’t in R-1 or R-2) that had three rentals in a seven-day period.”

 

Thoughts from the board

 

Planning board member Wendall Willard said that he has owned a short-term rental in Florida for two years and is not against STRs.

“It was a great piece of property,” Willard said. “We had to manage it, but we did make good money off of it, but it was not in a quote, ‘all residential type neighborhood,’ because everyone on the beach rented their property. I just think you could destroy the neighborhood by allowing unlimited type of rentals. I would think that is something we need to be cautious about. To go back to the land use plan, the plan is set to protect neighborhoods.”

Board member Chris Wilkes said he has lived in several different locations where the town has become a weekend community.

“That is not what we have here,” Wilkes said. “That is not what I want and certainly not where I want to live. If you start catering to only that, then you will start to lose most of your local residents, a lot of people who invest in the community. I’ve seen it happen. I don’t think anybody is coming at this with any bad faith argument. I feel like this has been at warp speed for six months. Just now, we were talking about looking at R-2 and what that actually was and the rest of us are trying to catch up. I still don’t think we have got it absolutely right. This is something that needs to be correct. This is also something that is not necessarily unique to this town. There are a lot of places that have gotten it right. In my opionon, the way they got it right was by controlling this market. As many places as I think got it wrong, I think of Hilton Head, East Hampton, Vale, I could rattle off a ton of those places that eventually a lot of people moved from. There are a lot of places that got it right. In my opinion, Charleston got it right, Sun Valley got it right, and these are places people want to move to be. I have tried to learn as much as I can as I go, but to either allow it outright with no sort of barriers is completely dangerous, but to say none at all, also is not good going forward. I don’t think anybody is coming at this with a bad faith, selfish argument. I think everybody is coming at this with good intent, but if you get it wrong, you’re setting yourself up for failure in a shorter time than you think.”

In summary, planning director Michael Mathis read off the each recommendation that was approved and was sent to the board of commissioners.

Below is a rundown of each recommendation:

1. When discussing Transient Dwelling Lodging (Whole house rentals of less than 7 days), this Board’s recommendation is to prohibit the use in the R-1 zoning district, allow the use in the R-2 zoning district with the issuance of a Special Use Permit, and allow by right in all other zoning districts (R-3 through B-4). The Planning Board mentioned that this use should be limited and based upon geographical location and adjacent land use.

2. When discussing Tourist Homes, this Board’s recommendation is to allow the use in R-1 as an accessory use and with a two-bedroom max; allow the use in R-2 as an accessory use; and allow the use “by right” in all other zoning districts (R-3 through B-4).

3. When discussing Whole House Short Term Rentals (Whole house rentals between 7 and 30 days), this Board’s recommendation is to allow this use in R-1 and R-2 with a 14-day minimum stay; and allow the use “by right” in all other zoning districts (R-3 through B-4).

4. This Board elected to strike the “Incidental Use” language from the WHSTR section, then voted to leave it in the document.

5. This Board elected to replace the “4 car per lot maximum” with a requirement of 1 car per 2 guests. This language was later amended to require 1 car per bedroom in the rental.

6. This Board elected to strike the “25-week per calendar year” language in section 6.5.18 (The reasoning is that the two-week minimum set on WHSTR’s in R-1 and R-2 will replace this requirement.)

7. This Board elected to strike the septic system inspection requirement from the draft.

8. This Board added a Fire Safety Inspection requirement to the draft.

9. This Board made a motion to change “Call Center” to “Owner or Operator” to provide consistency among the language in the draft.

10. This Board made a motion to suspend a WHSTR owners’ rights for six months if they accumulated three violations within a 12-month period.

 

Planning board chairman Brad Armstrong said this issue is important to the Town of Highlands and commends the board on the work they did.

“This is such an important issue to so many people, whichever side of the discussion you might be on,” Armstrong said. “From everyone that I have talked to, they have been respectful and thoughtful about this issue and I want to say thank you to the people of this community and for the board and staff.”

According to Mathis, the next step is to have a special called Town Board of Commissioners meeting to present the recommendations sometime in February.

- By Christopher Lugo