Waynesville planning board to study short-term rental regulations

According to the planning board’s staff report, STR rental compliance consultant Granicus said there were 319 such rentals within Waynesville’s town limits in 2019, but 444 in 2021. Stock photo According to the planning board’s staff report, STR rental compliance consultant Granicus said there were 319 such rentals within Waynesville’s town limits in 2019, but 444 in 2021. Stock photo

Seeking to balance the economic benefits of short-term vacation rentals with the negative effects they have on housing affordability in a tourist-driven, service-based economy, Waynesville’s planning board has taken up deliberations on new regulations that could eventually be presented for consideration by Town Council. 

“This is a topic all across the United States, people struggling with these issues,” said Planning Board Chair Susan Teas Smith in opening the board’s April 15 meeting.

Short-term rentals (STRs) are private residential dwellings that can be reserved for 30 days or less through online platforms like Airbnb, VRBO and more than 70 others. According to the planning board’s staff report, STR rental compliance consultant Granicus said there were 319 such rentals within Waynesville’s town limits in 2019, but 444 in 2021. Last week, there were only 234, however listings fluctuate seasonally or even at the owner’s discretion.

Haywood County’s Tourism Development Authority reported that in 2023 a slight majority (53%) of visitors to the county stayed in one of the estimated 1,975 STRs instead of one of the county’s 1,615 hotel rooms. While not all of those STRs are suitable for long-term rental by local workers and families — multimillion-dollar mountaintop homes, for example — a 2021 report from the Dogwood Health Trust counted a 1,600-unit deficiency of long-term rentals in the county, which by restricting supply drives up costs and leaves locals with little choice but to pay rents far above the U.S. Department of Housing and Urban Development’s recommended level.

Unaffordable housing isn’t the only undesirable effect stemming from the proliferation of STRs. Livability concerns for neighbors, including noise, parking and trash management also arise, as does increasing competition in traditionally residential neighborhoods between working class homebuyers and corporate interests with near-limitless resources.

STRs do, however, encourage real estate investment and allow many Americans a second income, or their sole income — including workers engaged in cleaning, maintenance and management enterprises. Director of Development Services Elizabeth Teague said that revenue from STRs had helped fuel the renovations that make Waynesville’s Main Street so unique.

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“No one in Waynesville wants to ban short-term rentals,” Teague said.

The town has been monitoring STR activity since 2018. The planning board discussed possible regulations in 2019, in 2023 and earlier this year, when a draft ordinance was presented. That vigilance has come with a fair degree of uncertainty, not simply over maintaining a balance but also over attempts at pro-landlord intervention from the General Assembly and the courts.

In 2023, Sen. Tim Moffitt (R-Henderson) filed an unsuccessful bill that would prohibit municipalities from enforcing regulations that restrict the ability of homeowners to use residential property or accessory dwelling units as STRs. Moffit is a realtor.

That same year, a court case in Wilmington set the guardrails for how municipalities could regulate STRs — that is to say, barely at all.

The draft ordinance considered by the planning board on April 15, reviewed by planning board attorney Ron Sneed, attempts to thread the needle between what municipalities can and cannot do.

Previously, the town’s land development standards didn’t define the difference between a homestay and an STR.

The proposed definition for a homestay is “lodging that occurs within a resident-occupied dwelling, duplex or townhome, or an accessory dwelling unit on the same property” while an STR doesn’t need to be owner-occupied.

Homestays, per the proposed ordinance, would be protected in all of Waynesville’s neighborhoods, however members of the Town Council would have to decide where, exactly, STRs would be allowed or prohibited.

The ordinance would also create a regulatory structure for the management of STRs, to minimize the impact of guests on neighbors.

For STRs, one off-street parking space per bedroom would be required, as would $500,000 in commercial general liability insurance. Parties or other large gatherings would be prohibited, and any trash would have to be stored in bear-proof containers until collection day, at which time empty bins would have to be removed from the streetside collection point.

Existing STRs in retroactively prohibited neighborhoods could end up being treated as pre-existing nonconforming uses, unless and until STR rental activity lapses for a period of one year.

The planning board quickly realized that nearly every aspect of the proposed regulations, including the definitions of “homestay” and “STR” could carry unanticipated consequences, and that the issue needs further study before recommendations could be made.

Near the end of the meeting, the board appointed by motion three members — John Baus, Michael Blackburn and Travis Collins — to head up a working group that will recruit people from the community to provide input on the regulations.

If that input is anything like that of the six people who spoke during the meeting’s public comment session, the working group will be inundated with one-sided misinformation.

Three of the six speakers, including David Plyler, Tricia Hollifield and Carlos Vazquez — all STR owners — asserted in no uncertain terms that STRs do not contribute to housing unaffordability.

“You cannot tell us what to do,” Hollifield said.

Numerous studies dating back years draw a direct correlation between the proliferation of short term rentals and significant increases in housing prices.

In Haywood County alone, where developable land is scarce and housing inventory is extremely limited, nearly 2,000 properties have been taken off the long-term rental market in favor of operating as STRs, which has led to scarcity in the long-term rental market. Scarcity drives up the price of any commodity.

Smith lamented the fact that no one on the affordable housing side of the issue showed up to speak out at the meeting. Whether that precedent continues in the working group remains to be seen — the board recommended local property developer Jackie Curé as the first member of the working group, but will continue to seek others.

Once the working group gathers enough input, the planning board has the option to recommend the proposed regulations as presented, to alter them or to recommend no regulations whatsoever.

Any adopted regulations would only affect STRs within Waynesville’s town limits and its extra-territorial jurisdiction. STRs outside town limits and outside the ETJ — even those with a Waynesville mailing address — would not be affected.

Perhaps the biggest challenge ahead of the planning board, and eventually the Town Council, is the threat of litigation. In October, Iredell County voted to implement STR regulations, but a quick injunction will prevent enforcement of those regulations until the court rules otherwise.

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