Members of the public got their final opportunity to weigh-in on proposed changes to the Highlands Unified Development Ordinance related to short term rentals on Thursday night.
The standing-room-only crowd represented both sides of the aisle, both pro and anti-STR. Each speaker was given three minutes to make their comments and many of the speakers who signed up to address the town board ceded their time to the attorney representing either pro-STR group “Save Highlands,” or anti-STR group “Highlands Neighborhood Coalition.”
During the public hearing, three proposals were discussed. The first proposal would force STR’s in R1 and R2 residential zones to be permitted and stop future STRs from operating in those zones. The second proposal would eliminate short term rentals in R1 and R2 zones after a to-be-determined grace period via amortization. The final proposal was sent to the town board by the planning board, and it would allow STRs to continue to operate in R1 and R2 zones but with added restrictions such as a seven-day minimum stay requirement.
“This issue has been going on for a year and one day now and we are disappointed in the town, and how the process has been handled,” Save Highlands attorney Derek Allen said. “The town can not take away a valid nonconforming use, or take away a grandfathered right of property owners. The issue is really the town’s ability to regulate short term rentals in the future, but that is not how the ordinance has been presented. We feel as though the Town of Highlands is in a very weak legal area.”
Allen pointed out multiple towns where similar, albeit not the same, ordinances attempting to regulate STRs have been struck down in court – places such as Austin, TX, New Orleans, LA and Wilmington, NC.
Attorney Mac McCarley, representing Highlands Neighborhood Coalition, disagreed with Allen’s assessment of the ordinances the town prepared for consideration.
“First, the draft ordinances do not violate any of the provisions from the recent Wilmington case,” McCarley said. “Second, amortization is a settled issue in at least six cases in North Carolina going back to 1972. In the six cases that have dealt with amortization of a nonconforming use, they all have been settled by the court of appeals and the state supreme court has declined to review them. There is solid legal footing that allows for amortization.”
Of the six court cases McCarley mentioned, none dealt with short term rentals. The primary function of amortization in those cases was to get rid of businesses that were considered “nuisances,” such as unpermitted scrap yards, nonconforming billboards, or sexually oriented businesses.
Carol Gable, a Highlands Neighborhood Coalition member, addressed the board and noted that the town does not owe any property owner a return on their investment. Rick Seigel agreed and pointed out that the town has the right to change its ordinances to deal with problems that arise over time.
“The intent of R1 zoning was and is to protect residential homeowners from the encroachment of businesses,” Seigel said. “You can look at STRs however you choose to, but they are for-profit businesses. As for the idea that the town can’t or shouldn’t regulate STRs because people have bought homes for that purpose and they may sue, that is nonsense. If someone gives you a stock tip, and that stock goes south, the result is on you for buying that stock not the person who gave you the tip.”
STR owner Michael Eady, whose home has been in his family for four generations, spoke to the necessity of short-term rentals as an outlet for large families to be able to vacation in Highlands.
“Our economy is soon going to be driven by our children and they are going to vacation differently than their parents and grandparents,” Eady said. “We are going to need properties where families can vacation all together. In my family’s case, we can’t afford to book multiple rooms for a week at Old Edwards Inn or some of the other hotel properties in the area, and even if we could, no one would want my children running around their luxury hotel. When we go on vacation we use our home in Highlands or we book a similar accommodation wherever we may be traveling to.”
Jeanie Chambers, who operates a short term rental management company in Highlands, asked the board to consider the recommended ordinance built by the planning board.
“It feels like short term rental owners are in the middle of a witch hunt,” Chambers said. “In looking at these proposals, the one the planning board drafted is the easiest to implement. I’m not opposed to having a minimum stay requirement or making the improper advertising of STR properties a fineable offense, if that is what’s leading to properties being overbooked by large groups that cause issues.”
Along with the in-person comments, the town received more than 165 pages of written comments both for and against STRs operating in R1 and R2 zones.
Following the nearly two hours of public comments, Highlands Mayor Patrick Taylor informed the crowd that the board of commissioners would hold a work session to discuss all three proposed ordinances on Tuesday, Aug. 30.