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Commissioner Buz Dotson talks with Commissioner Eric Pierson during their meeting last Thursday night.
After almost nine months of intense debate, public hearings, multiple meetings and several drafts of the Unified Development Ordinance, on Thursday, May 19, the Town of Highlands Board of Commissioners approved the final UDO, putting a stamp on what is allowed and what isn’t when it comes to short-term rentals.
Among the highlights in the changed UDO, the three changes causing tension are the disallowance of short-term rentals in R-2 zoning, nonconforming use, which would allow current STR owners to continue to operate their STR and a zoning compliance permit owners would have to apply for in order to run a STR.
Public comment
Before taking action on the UDO, the board of commissioners heard once again from the public on their thoughts about the changes in the UDO.
Kristy Favalli with Save Highlands started out the public comment period, stating that the zoning permit is impermissible due to Schroeder vs. Wilmington’s recent decision.
“We have carefully studied the proposed amendments,” Favalli said. “For time restrictions, I will stick to our two main concerns. Section 4.7.10, despite its clever naming, it is still in fact an impermissible registration requirement according to the law of the State of North Carolina and the North Carolina Vacation Rental Act. By prompting property owners to provide the address, name, contact information of the owner, manager and tax information and a septic tank certificate, the town is plainly instituting a system to track short-term rentals. Although the town describes this as a short-term rental zoning compliance permit,
the information required to obtain this permit has absolutely nothing to do with zoning compliance.”
The next concern Favalli had was to do with Section 6.5.18 of the UDO, specifically, the vested rights section.
“This section cannot apply retrospectively to property owners who have long standing short-term rentals,” Favalli said. “The town cannot lawfully require valid, nonconforming short-term rentals to comply with new standards that diminish or eliminate their established property rights. This, in its entirety, is contrary to the law on valid nonconforming use on vested rights.”
Favalli ended by saying that the ordinance amendments are problematic for many reasons.
“The previous provisions are especially concerning,” Favalli said. “By producing these ordinance amendments, the town has blatantly disregarded the recommendations of the planning board and the legal advice from at least two reputable land use attorneys. The amendments also disregard the demonstrated will of the citizens and residents who spoke, overwhelmingly, in favor of short-term rentals at the board’s February 17 meeting. Despite the dozens of people who voiced their support of the free use of short-term rentals and the notable few who voiced their opposition, the town is choosing to adopt regulations that will drastically and detrimentally hinder short-term rentals in Highlands. The town is making this choice without giving proper notice to the public and without providing a reasonable time for our neighbors to meaningfully consider the amendments and voice their comments. Save Highlands has always fought to compromise with the town and with the Highlands Neighborhood Coalition. Had the town provided more of an advanced notice of the proposed amendments Save Highlands might have successfully negotiated with the town to reach a resolution that all parties could live with, but the town has short circuited the process and has left Save Highlands with no other choice than to continue fighting through the legal justice system. Simply put, we know what our legal rights are and all we have ever asked is for an ordinance that is within the confines of the law, which this certainly is not. It is my sincere hope that the town makes a reasonable decision against these invalid, overreaching ordinance amendments. If not, then Save Highlands will have no other option than to remain steadfast in challenging any and all ordinance amendments that improperly infringe upon individual property rights.”
Jerry Moore, who is running for Macon County Commissioner and owns two short-term rentals in R-2, spoke next in the public comments section, stating that though the town is moving in the right direction, he has some concerns with the proposed amendments.
“If you recall, back at the last public comment period, I really emphasized having an enforceable ordinance for dealing with short-term rentals and problematic short-term rentals,” Moore said. “I talked about the ordinance dealing with occupancy, parking, noise and trash, which this ordinance does. What concerns me, and I know you have had attorneys look at this, and I have read the case law of Schroeder vs. Wilmington, and I see how you could have reached a conclusion you were trying to reach in this document. There is definitely some leeway, but I would say my concern is, and I have to agree with the last speaker, a zoning compliance permit is, in essence, a registration requirement. It’s not the worst thing in the world, but I’m not sure it meets the law. I’m sure the attorneys told you that it does meet the law, so I will rely on you for that. It appears that short-term rentals are singled out, compared to long-term rentals and the North Carolina General Assembly, in their original legislation, said you could not separate the two, but they did not do that in their subsequent legislation. With that, one concern of mine is the septic inspection. So, you’re going to have a septic inspection for a short-term rental, but you’re not going to have one for a long-term rental? What about a single-family home? People live in their homes for 365 days. Don’t they have the possibility of having a bad septic system? You’re clearly singling out short-term rentals. As far as I’m aware of, short-term rentals don’t use as much septic as a business on Main Street or a single-family home, where six people live in that home. That’s concerning, and it’s an additional burden put on the short-term rental owner.”
Moore went on to talk about obedience of the ordinance itself.
“If you have an ordinance and it is enforceable, then people will obey it,” Moore said. “If you have one that is not enforceable, then this person will obey it because they follow the law, but this other person will not obey it if it’s not enforced.”
When it comes to vested rights and the ordinance amendments, Moore said he knows people in R-1 zoning that will have a problem with it.
“I know that there is at least one person here that is in R-1, and they just bought their Airbnb and have been renting it long term and they are not going to have the days in the bank in order to rent for more than 30 days out of the year,” Moore said. “People have made significant investments. I have no qualms with you forbidding this moving forward, but the people that bought for the purpose of short-term rental, to limit them, I think it is very damaging and is concerning to me. I think it infringes on their property rights. If they would have known, then they may not have made the decision to buy that property.”
Board deliberation
Before talking about the proposed amendment changes, Commissioner Marc Hehn made a motion to send the UDO back to the planning board. Without a second, the board voted 4-1, against doing so.
After the vote, Hehn then made a motion to send the UDO back to the attorneys. Without a second, again, the board voted 4-1, against doing so.
“We have made so many changes to the ordinance, I think it is best if we send it back to the planning board so there can be a public hearing,” Hehn said. “I make a motion that we send it back to our legal council so Jay and Craig can meet with the opposing counsel to see if there can be any compromise possible.”
For those that were concerned with the zoning compliance permit being considered registration, Commissioner Amy Patterson said it was certainly considered in the committee meetings.
“We came back with this recommendation because it is zoning,” Patterson said. “We have rules about uses and zoning and that sort of thing. You have to have some way of knowing what the rules are and that they are compliant. It doesn’t do us any good if we have rules and we have no way of knowing if they are being compliant. So, this is just like us asking for a special use permit or any other permit. It is a compliance permit.”
When discussing the change of allowing STRs in R-2 and disallowing them, Patterson said it came down to what they saw as the future of Highlands.
“The future of Highlands should not be as a short-term rental venue,” Patterson said. “I think we need to protect what we have and the residents we have to contribute to our town in so many ways, like the thousands of dollars that we gave in scholarships. I doubt that the short-term rental people that come here for a couple of days contribute to that. To me, short-term rentals are not conducive to what Highlands is. Rentals may be fine, but short-term rentals that are weekend type, turnover, destination venue type things are not what we are. We are going to lose what we are if we don’t do something. If we don’t restrict them in R-2, then it is going to explode, and we are going to lose a lot of our communities and it will drag the rest of Highlands down with it.”
Along with disallowing STRs in R-2, the board voted to allow STRs in B-4 zoning.
Commissioner Brian Stiehler made the motion to approve the changes, with Patterson seconding the motion. The vote was 4-1, with Hehn opposing.
“This has been a tense situation,” Highlands Mayor Patrick Taylor said. “I’ve heard comments from the public saying that we are rushing through, but I beg to differ. We consulted with two of the best legal firms in land use and zoning in North Carolina. A lot of the things they were advising us were all congruent and in line. We want to listen to the public and respond, but also, we have to listen to North Carolina statute of law and our best legal advice. I felt like we had a lot of good legal options, and we made that decision based on what the courts and legislature have said and I know that some people are not going to be happy. It’s not just Highlands that has this problem. It’s a change in our lifestyle in our country that is putting pressure on everything. Who knows how it will work out? The legislature might come in here and preempt everything the municipalities have done and another thing, if we have a severe recession and the economy tanks, the whole situation could change very fast on short-term rentals.”
After the board meeting on Thursday, The Highlander reached out to both the Highlands Neighborhood Coalition and Save Highlands for their thoughts on the action.
Below are their statements:
Highlands Neighborhood Coalition Statement
The Highlands Neighborhood Coalition was formed by homeowners throughout Highlands to preserve the historic character of our Town and to ensure that there are neighborhoods in Highlands that are purely residential and free from commercial activity, specifically short-term rentals (STR’s).
We welcome the Town Board’s May 19 action of amending the current Unified Development Ordinance (UDO) as a good first step in halting the unchecked proliferation of STR’s in Highlands. The changes clarify what some saw as ambiguities in the previous language, which did not use the term “short-term rental.” Short-term rentals are now defined in the UDO as a Commercial Use and prohibited in certain residential neighborhoods - those zoned R-1 and R-2.
The difficulty the Board has struggled with since last summer - as many, many communities have done throughout the country - is what to do with currently operating STR’s in these now prohibited residential zones. After consultation with two prominent land use attorneys, hours of public comments, a thorough review of state statutes, and an analysis of the recently decided Schroeder v. City of Wilmington decision by the North Carolina Court of Appeals, the Town Board determined that the best way forward is to allow these STR’s in R-1 and R-2 to continue operating as long as they can provide proof to obtain a Nonconforming Use Permit (NUP) and then must operate strictly within the parameters of past use.
In addition, all STR’s, no matter where they are located in Highlands, must obtain a permit to operate a short-term rental (STR Permit). The standards for obtaining both permits are clear and reasonable, as are the compliance rules. For example, any STR attached to the Town sewer system cannot exceed 12 guests. All STR guests must comply with Town nuisance, noise and trash ordinances. Special events are not allowed. Vehicles cannot park on the public right-of-way. Contact information for the STR owner or operator must be posted on the premises.
Permitting and enforcement will be time-consuming for the Town, and we trust that they are up to the task they have created for themselves. The mayor accurately predicted that no one will be totally happy with these changes. For those of us who want to live quietly in our mountain homes, the option chosen by the Town still leaves many of us with mini-hotels operating next door. And so HNC remains concerned, but hopeful that this first step will allow the Town to fully understand and manage the problems created by commercial activities in residential neighborhoods.
Commissioner Amy Patterson said it best at the meeting, “The future of the Town is worth fighting for.”
We agree and will continue to support the Town’s efforts to preserve the character we cherish about Highlands.
Save Highlands Statement
The ordinance on its face clearly violates the law of the State of North Carolina. Below is an excerpt from the North Carolina Vacation Rental Act that was signed into law by Gov Cooper on July 1, 2019…
“…cities and counties are not authorized to do any of the following, among other things: Adopt or enforce any ordinance that would require any owner or manager of rental property to obtain any permit or permission from the local government to lease or rent residential real property or to register rental property with the local government.”
This board has blatantly and recklessly dismissed the advice of the NC School of Government. They have ignored the legal advice of at least two reputable land use attorneys, including their own hired outside legal counsel. They completely scrapped and dismissed the proposal set forth by the Town of Highlands Planning Board--the only officials who attempted to mediate instead of unnecessarily squandering taxpayer dollars on legal fees. In addition, Commissioner Patterson made it abundantly clear that spending in excess of $200,000 of taxpayer money is a worthwhile use of taxpayer funds that could be better spent on items such as workforce housing solutions. Finally, after months of deliberation and awaiting a verdict in Schroeder v. Wilmington, the Town completely disregarded the judge’s ruling and decided to rush through an overreaching and invalid ordinance with no public comment. The entire thing is illogical and perplexing.”
- By Christopher Lugo