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City Council, February 26

Short term rental ordinance gets first reading
Council opts for more restrictive Task Force recommendations
Marc Knapp

The long awaited short term rental (STR) ordinance made it through the first reading last night. Its passage was not easy and some changes, perhaps modest, are likely before the second and final readings. Council members had many issues but most related to enforcement. Ultimately, only Council member Lewis and Mitchell opposed the ordinance.

Over 40 citizens spoke at the public hearing that preceded the vote on Council. The majority spoke in favor of the proposed ordinance but it was not a large majority. Representatives of the real estate and rental agencies opposed the ordinance and noted that the City Task Force (TF) that shaped the ordinance had no industry representatives. Some also claimed that the new ordinance was wide open to legal challenge.

The contents of the ordinance are broadly known. The findings of the TF and the views of the Planning Commission (PC) which met to consider the ordinance, have been widely reported. Staff in its introduction noted that the recommendations of both were before Council. Broadly, the recommendations were similar but those of the TF were more restrictive, and in particular, did not allow for managers, and thus for a managed rental for a maximum of 72 days as proposed by the PC. Staff recommended that Council approve the recommendations of the TF.

Herewith an attempt to summarize the ordinance.

  • Presently, no STR– less than 30 days – is allowed in the City except in the Elliotborough and Cannonborough neighborhoods. The proposed ordinance is designed to regulate STRs but to also protect residential neighborhoods. Two types of STRs are proposed – Commercial and Residential. Permits will be required for both licenses. Commercial STRs are confined to the Elliotborough and Cannonborough neighborhoods and no change has been recommended in relation to this area. The changes proposed relate only to Residential areas of the City.

  • STR’s are divided into three classes. Class I relates to those in the Old and Historic districts (on the Peninsula), Class 2, the Old City district (on the Peninsula), and Class 3, just about everywhere else. To see map, press View image The STR in each of these districts must be conducted by the resident owner. The property must be registered in the owner’s name, and the owner hold a business license. Only one STR is allowed per property. Occupancy is limited to 4 adults. Advertisements by the owner or an agent would need to show the permit number.

  • Class I. STRS will be allowed only on properties that are on the National Register of Historic Places. If the property has been used for long-term rentals (i.e.greater than 29 days ) and incurs a 6% property tax rate, the owner will have to wait 12 months and apply for a 4% tax rate before converting to an STR. One off street parking space to be provided for each bedroom.

  • Class II. Properties need to be 50 years or older. One parking space to be provided for each bedroom.

  • Class III. Terms still need to be precisely defined. The PC recommended that buildings should be at least five years old. The TF wanted about 50 years. As Council member White observed, the TF limitation would preclude all houses on Daniel Island. No parking space needs to be provided for the first bedroom but one space was to be provided for each additional bedroom.

There was some confusion as to precisely what the TF had recommended. As Councilmember Gregorie noted, there was no clear copy of the recommendations. There was a copy of the PC recommendations and we suspect members were confused as to what was what.

But there was no confusion in relation to enforcement and indeed this was the principal area of concern.

Staff told Council that under the plan, three officers would be hired and dedicated to enforcement. As well, software would be purchased to enable viewing, locating and tracking property rentals on the Internet. These tasks be performed automatically 24 hours a day every day of the year. As well there would be a fine $1087 per day for an infringement. If the fines were not paid, the City would take out an injunction.

Some Council members were cynical. There were some thousand or so properties being rented illegally and there was no enforcement. What was going to change? The City Attorney said that penalties under the old ordinance were poorly drafted and imposed standards on the City difficult to comply with. This changes with the new ordinance. She noted that Attorney Robert Rosen had spoken at the public hearing and questioned the need for the STR ordinance as he had successfully prosecuted an owner and manager. The City Attorney noted that Mr. Rosen had been able to secure the testimony of the tenant to win his case. Testimony of tenants was hard to come by and would not be necessary under the proposed new ordinance.

There were other conditions imposed in the new ordinance but of lesser significance. Bed-and-Breakfast’s licenses and STRs under the existing ordinance will be grandfathered. We would also add that the Historic Charleston Foundation and the Preservation Society spoke in favor of the TF recommendation. They were also joined by Yvonne Fortenberry, retired City Planning Director, and of course many others..

It was a long meeting and the STR hearing drew a large crowd that filled the Dock Street Theater. There was a short break after the STR business was concluded and probably no more than 10 citizens remained. Public Participation brought out only a few speakers, most of which spoke about their concern of flooding and congestion on Johns Island. At the conclusion of the meeting, Mayor Tecklenberg reported that he met recently with Chairman Rawl of the County. This followed the Mayor’s proposal at the last Council meeting to create a Johns Island Infrastructure Commission. It would be a joint effort of the City and the County to bring relief to the Island’s woes of development and flooding. The Mayor said he was waiting for a reply.