Charlotte dumps regulation changes for short-term rentals, citing recent legal cases
The city of Charlotte said Friday it is scrapping all of its proposed new regulations around short-term rentals, citing a recent legal case and possible state legislation around the industry.
The changes comes just weeks after a North Carolina appeals court ruling struck down parts of Wilmington’s regulations, which were adopted two years ago by the City Council.
Wilmington was violating a state statute when it required short-term rental operators to register their properties, the court ruled. The court also struck down a cap on the number of rental properties in certain parts of the city and a requirement to keep rentals separated by a certain distance since both were tied to the registration program.
The ruling, however, did not close the door for cities to regulate short-term rentals like Airbnbs and VRBO. It affirmed cites can regulate them through general zoning laws, government and legal experts told The Charlotte Observer.
Charlotte’s regulations can be found in the first draft of the Unified Development Ordinance.
While there have been other hot-button issues, the proposals around short-term rentals have attracted the most public comment and reaction since the draft was released in October.
Most comments centered around a 400-foot separation rule — meaning all “whole dwelling” short-term rentals separated by 400 feet — and what impact that would have on existing short-term rentals. The city had a number of other proposals, including a requirement for rental owners to get a zoning permit.
Charlotte’s City Attorney’s Office recommended refraining from proposing any short-term rental regulations “at this time,” according to an email sent out from the city.
Charlotte city staff is anticipating there may be state legislation enacted around short-term rental regulations, the email stated.
Charlotte’s email also stated Wilmington can still appeal the April 5 appeals court ruling. Reached Friday afternoon by email, a Wilmington spokeswoman said the city attorney’s office will present recommendations to the council early Monday on whether to appeal.
Meanwhile, Wilmington has ended all registration requirements.
“The City Attorney’s Office will continue to monitor the courts and state legislative activity on the topic of short-term rentals and can work with city planning staff on drafting appropriate regulations once the ability of local jurisdictions becomes more clear and certain,” the Charlotte email stated.
As of mid-April, there were 3,170 active rentals in Charlotte, according to AirDNA, a vacation rental research firm.
Rental regulation discussion
Charlotte officials have been discussing how to balance complaints from neighbors over problem properties and the fact that some people rely on the rental properties for additional income.
Some residents thanked the city for the 400-foot rule, saying they live close to someone who rents out their home and have problems with loud noise and other issues.
The rentals are a “detriment of our community” as Airbnb corporate owners “gobble” affordable housing stock and monetize the properties through rentals, one person commented.
Still, many people expressed how they own the rentals and rely on the supplemental income.
Addressing quality of life
Charlotte City attorney Patrick Baker gave council members an update on the short-term rental topic earlier this week, Councilwoman Dimple Ajmera told the Observer Friday afternoon.
Baker mentioned that the General Assembly could have some legislation around the topic so the city should wait to have a discussion until then, Ajmera said.
Still, Ajmera expressed an interest in addressing concerns she’s heard from residents around rentals that have brought loud noise and other disruptions to certain parts of the city. “We must address this quality-of-life concern that our residents have raised,” Ajmera said.
Councilman Malcolm Graham wants to have closer discussions with Baker and his colleagues on City Council about how to move forward, especially given the case in Wilmington and potential state legislation.
He’s also heard plenty of concerns from constituents over problem houses when it comes to short-term rentals.
“We need some safeguards for sure,” Graham said.
Next steps
Council members are expected to vote on a final draft of the Unified Development Ordinance in July. Mayor Vi Lyles called a special meeting May 5 to discuss the UDO.
But the 608-page document is being developed as a “living” document that will be updated on a regular basis, city spokesman Cory Burkarth wrote to the Observer in an email Friday afternoon.
The city will be able to revisit a topic like short-term rentals when there is more clarity around how cities can regulate the properties.
“It’s also important that we don’t create confusion or uncertainty with the community by introducing regulations that may have to be changed soon after they are introduced,” Burkarth wrote in the email.
This story was originally published April 29, 2022 at 2:29 PM.
