Public makes more comments on STR situation

At the last regularly scheduled Highlands Town Board of Commissioners meeting, Thursday, Sept. 16, the public comment section was full of people raising issues and protecting short term rentals.

The comments come in reference to a decision made during a special called meeting on Aug. 24, where commissioners reached a verbal consensus to enforce all its residential ordinances, which bans short term rentals in R-1.

The public comment section began with Highlands Chamber of Commerce executive director Kaye McHan giving a statement on behalf of the chamber’s board.

“The Chamber’s role is not to take sides on this issue, as we deeply respect the concerns and opinions of all involved parties,” McHan said. “We are grateful for the Commission’s expressed willingness to consider this issue further, and our interest in that process can be stated simply:

• We want to help, in any we can, to assure that the consideration of this complex subject is collegial and fact-based, and that all views are welcomed and respectfully considered. We know that the Commission shares this goal; and

• We want to assure that, in addressing this challenge, nothing is done that might impose lasting harm on the economy of Highlands that depends so heavily on tourism, as we all depend on that economy for our livelihoods and for essential public services.”

McHan went on to bring up the several challenges involved in the short-term rental situation in Highlands.

“We have asked for this opportunity to speak because we believe a thoughtful process, one that respects all sides in the debate, is the best way to find a constructive path forward that serves the best interests of Highlands and everyone who lives here,” McHan said. “Before we suggest a specific process, we think it is appropriate to candidly acknowledge the challenges involved.”

Below are the following challenges McHan detailed:

1. The zoning practices at the heart of the current controversy -- allowing STR’s in R-1 districts -- have been followed in Highlands, rightly or wrongly, for a very long time, some would argue for as long as 40 years.

2. An unknown but certainly large number of individuals and families have invested substantial sums to purchase, renovate, or build residences now used partially as STRs, and in so doing have relied upon those long-standing zoning practices.

3. The challenges now posed to those long-standing zoning practices are not frivolous and are based on the text of the zoning ordinance which, the challengers believe, clearly prohibits STR’s in R-1 districts, while others, of course, reach different conclusions.

4. It appears that litigation may be considered by both challengers and defenders of the long-standing zoning practices.

5. The Highlands economy depends substantially on tourism, and on the expenditures of overnight visitors to our community.

6. We lack reliable data to make reasonable predictions about the economic impact of changing the long-standing zoning practices, but we know what some of the questions are:

a. Will the proposed changes reduce the availability of overnight accommodations and thus the number of local visitors and, if so, how will that impact tax revenues (sales, property, occupancy) and overall business revenues?

b. If those tax revenues decline, will public services decline accordingly, or will they have to be supported by other new taxes?

c. If overall business revenues decline, how might that impact jobs and new capital investment in Highlands?

d. Will the January 3 “enforcement date” cause a rush to sell properties used partially as STR’s, and if so, how might that impact home values in the short and long terms?

7. We have not fully examined options to the current zoning practices that are being challenged. For example, to address the concerns that have been raised by challengers, should Highlands consider revising the ordinance to permit STRs in R-1 districts but with strict new rules backed by strong enforcement, an approach suggested by some in Highlands and used successfully in other communities?

“The Chamber is well aware that zoning disagreements often lead to litigation, and that contending groups in Highlands are giving that serious consideration,” McHan said. “Before anyone chooses that path, we hope the Commission will establish a process, open to the participation of all, that offers genuine promise of constructive compromise.”

One way that McHan said the commission could establish a process is by creating a special committee on STR Zoning.

Composition.

Up to 12 members named by the mayor, to include representation from the Commission, the Chamber, the principal groups favoring or opposing STR’s in R-1 districts, and other civic, business and neighborhood leaders. The mayor could appoint a committee chair who is respected in the community and who has experience in leading committees of this kind dealing with issues of public importance. The Town Manager and Town Attorney might serve ex officio.

Mission.

The committee could be instructed:

• to consider all points of view;

• to gather information, data, and analysis as needed to inform the committee’s work;

• to give the public opportunities for input through hearings and otherwise;

• to review STR zoning systems in other towns of similar size where the economy depends substantially on tourism;

• to consider all reasonable options and proposals;

• to develop a proposal to resolve the STR zoning issue in Highlands; and

• to submit that proposal to the Commission for their consideration.

Duration.

The committee should report its findings and conclusions to the Commission within a reasonable period of time, possibly 120 days.

Support.

Ideally, the Commission would provide the committee with staff assistance and some funding to help with data collection and other assistance to the committee.

If the Commission decides to create such a Special Committee, there is one other action we would urge you to consider. To succeed in their mission, the Special Committee members need to believe they are free to consider all options, that none are foreclosed, that they are being given a real chance to bring the committee and community together in the spirit of compromise to serve the interests of Highlands. The best way the Commission can give that assurance to the Special Committee would be to rescind, at least temporarily, the decision to begin enforcement action of the existing ordinance on January 3, 2022. If the Special Committee is not able to develop a solution for the overall STR zoning problem that the Commission finds acceptable in 120 days, then the Commission can set a new commencement date for that enforcement if it wishes.

“We respectfully urge the Commission to create a Special Committee for this purpose,” McHan said. “It may not succeed, but if it does, Highlands will be able to resolve this controversy without rancor, without creating lasting divisions in the community, and without expensive and unnecessary litigation. As we all know, people of good will often solve seemingly intractable problems, given a fair opportunity, and nothing will be lost by trying. Thank you again for the opportunity to be heard on this matter of great importance to our community.”

Jennifer Huff, the organizer of savehighlands.net, also had the opportunity to talk during the public comment section.

The group she is a part of has already fundraised $115,000 to fund legal representation from the Asheville law firm of Allen Stahl + Kilbourne, with attorney Derek Allen acting as lead counsel.

“It is unfortunate that the decision whether or not Highlands should ban short term rentals has been framed by some as us versus them or locals versus out of towners,” Huff said. “This is not what this is all about. Those of us that have started the Save Highlands group love Highlands. And we have been an integral part of this community for many years. That is why we have come here for decades and why we have purchased homes here. One of our member’s family has owned property here since the 1920s. Others have repurchased and restored family property. In fact, I know a property in their fifth generation. They have been a part of Highlands for a century. We are Highlands too. We want all of us to come together to make sure the town retains its charm and beauty for decades to come because we love this beautiful mountain town.”

Huff said the people that come to Highlands contribute a substantial amount to the town’s economy.

“We could discuss occupancy tax, and those who spend money in our shops, and we know it would be well into the millions,” Huff said. “That loss of revenue would not only hurt property owners, many of whom have put their life savings into their property, it would also be very devastating to our community. To the shops, the restaurants, the spas, I could go on and on. Furthermore, the banning of short-term rentals could be damaging to our neighbors. For example, we know of a local woman who rents out her family home. She is 85 years old. The income that she is able to derive from herself and what is she going to do after Jan. 3?”

The second topic Huff brought up was property rights and whether or not the government can tell them what they can and can’t do with their private property.

“Obviously, there are limits,” Huff said. “We seek to be good neighbors and citizens, but as long as someone is not violating the rights of others, or endangering them, a private property owner should be able to enjoy and use their property as they wish. Many of the members of ‘Save Highlands’ have invested substantially in their property to improve it. Never was there an indication from the town that short term rentals were illegal. In fact, many were told just the opposite. The town happily continued to accept revenue from short term rentals for many years. We have to work together to save Highlands from local government infringing on our property rights and from suddenly changing their interpretation of zoning laws based on complaints from a vocal minority. The community should be at the table when these decisions are made and the decision should be based on analysis and careful study, not on emotion and personal bias.”

Kathy Henson owns a house on Satulah Mountain and has owned that house since 2004.

“I always believed that the zoning laws protected my husband and me from commercial activity in our neighborhood,” Henson said. “I have never called the police about the neighbors that change every weekend, because I don’t think that is the best use of police time in the Town of Highlands. But every weekend I have new neighbors and every weekend, it is a new learning curve. One weekend, it is the neighbors who put the dog on the screen porch and let it bark all afternoon. The next weekend, it is the wedding party that’s celebrating the wedding long after the ceremony is finished. The next weekend, it is the birthday party for the 60-year-old women, who enjoy the fine wine and play ‘name that tune’ until 11 p.m. As much as I hear that we can just teach people to put the trash out and not be noisy, it’s a learning curve that starts every Friday afternoon. I thank the town for agreeing to enforce the existing prohibition in R-1 zoning. It’s not that the town has suddenly decided to prohibit short term rentals, it’s that the town has finally heard enough from the silent majority that something needs to be done to protect those property owners who don’t want a hotel next door.”

Highlands Vacation Property owner David Bee moved to Highlands more than 20 years ago, when he opened the sports-based sandwich shop, followed by Hilltop Grill and the pizza place on Main Street. Bee has been managing short term rentals since 2005, when he received his North Carolina real estate license.

Bee said his company now has 90 properties in the area, most of which are within city limits.

“There is no way to fathom the economic impact this decision will have on the town, but here are a few numbers from my own business,” Bee said. “For 2021, owners of properties that I manage in town will receive $600,000 in revenue. How much of that will be lost to the town now that they will no longer remodel, purchase necessary items in the town from Reeves, Bryson’s, gift baskets from Kilwins and other repairs that they need?”

Bee said his own office will lose approximately $185,000, if the town continues with the STR ban.

“This is one employee that I cannot hire, and one employee that I might have to release,” Bee said. “My house keeping staff will lose $64,000. The chamber of commerce will lose $30,000 in occupancy tax. The town will lose $20,000 in sales tax. Additionally, I purchase lunch every day for my entire staff from the local restaurants in town, which totals almost $19,000 a year. I purchase things at Reeves from toilet seats to lightbulbs and grills. I buy gas in this town for four of my company vehicles, as do my employees, housekeeping staff and repair people. The economic impact of this is far too significant to have this type of knee jerk reaction that has been made without rational discussion. Please stop and consider all of the people that will suffer from this, from homeowners to the general workforce. For the three of you that are business owners, how would it affect you? Rethink this decision before the detriment is insurmountable.”

Highlands local Lynn Loosier’s family has had a home on Dog Mountain for approximately 60 years. She said she agrees with both sides of the situation.

“I understand people that live here that want their peace and quiet,” Loosier said. “I also understand those that want short term rentals. Our family has short term rentals because we are all getting older, and we are not able to get up there. We can have short term rentals and that is what we want. We want to pass this home down to other family members, but if we have to stop short term rentals, we are not going to be able to keep the home. That is upsetting to my family. I want to reiterate that I do feel for the other people who live on the mountains and have people staying up all hours of the night. I feel like we can find a way to come together on both sides and maybe put something in place for these leases that will be more concrete with what tourists can do and not do in rental homes, so we can protect the quiet times that people who live on the homes want to have. This decision is going to impact more than just the economy. It is going to impact revenue for a lot of people. I love Highlands, but I do want the other side to have what they want too. I hope we can come together as a town and figure out a better way to do this.”

After hearing public comments, the Board of Commissioners went into an executive session to talk about the short-term rental situation with their attorney, Jay Coward.

After the meeting, the town released a statement saying the mayor signed a fee agreement retaining the services of attorney Craig Justus of the Van Winkle Law, Buck, Wall, Starnes and Davis Law Firm, concerning Short Term Rental/Lodging Ordinance Revisions.

Below is the full statement:

Last week, the mayor signed a fee agreement retaining the services of attorney Craig Justus of the Van Winkle Law, Buck, Wall, Starnes & Davis Law Firm, concerning Short Term Rental / Lodging Ordinance Revisions.  Mr. Justus will be reviewing and advising the Town Board on Town of Highlands current residential ordinances relating to short term rental, lodging and related matters.  Mr. Justus will provide legal advice to the Town Board as the review of short-term rentals in residential zones moves forward.

In the close session of the Sept. 16, 2021, Town Board meeting, Justus and town attorney, Jay Coward briefed the board and outlined possible procedures to address short term rentals.  The Board will continue to meet with these two attorneys as the process moves forward. No action was taken at this time.

The Board discussed the contract and the completion of construction of the Dark Fiber Project.

No board action was taken at this time.

- By Christopher Smith