Short Term Rentals In Charleston
My thoughts on a pressing issue here in downtown Charleston
At this moment, we are in the middle of unprecedented times. Technology has taken over nearly everything that we do and has transformed both local and global economies. It has become much easier to do things, such as get a ride to the airport (Uber), rent a car (Turo) and find a place to stay (Airbnb). There is no exchange of cash, people can leverage their assets and use them to make money and it can all be done through a cell phone. Although on the surface this sounds like a beautiful economic utopia where everyone is happy, there are other factors that need to be considered, especially in regards to Airbnb and short term housing rentals.
The idea behind Airbnb is that property owners are able to post their properties through the Airbnb website and those looking for accommodations are able to rent properties through the Airbnb website. These accommodations generally come in the form of a shared room, a private bedroom or an entire house. Airbnb, who owns the platform connecting hosts and guests, takes out their share of the revenue and then the property owner keeps the rest. These transactions are usually for short term rentals, which for general purposes can be loosely defined as a rental of 30 days or less. While this may seem ideal for all three parties involved, the negative consequences of the service certainly exist. One of the major problems cited with Airbnb is that it has an unfair advantage to traditional hotels because properties posted on the site are not subject to the same regulations as hotels. Secondly is the idea Airbnb is ruining residential neighborhoods by having the constant turnover of guests associated with short term rentals. Both issues bring about valid points that need to be considered, but Airbnb also has positive benefits, leaving room for regulating Airbnb rentals so that positive benefits are maximized and negative benefits are minimized.
First and foremost, a common way that Airbnb rentals have been regulated is by enacting a quota on the number of days space could legally be rented. In theory, this would only allow property owners to use their space as a business for a limited number of days and therefore ensure that the property is still a residence. Specifically, in the City of Charleston, the market for short term rentals has grown extremely quickly, so much so that according to Steve Bailey of the Post and Courier, "Charleston's short-term rental market is effectively unregulated and growing like a virus. In 2010, there were two Airbnb rentals in the city, according to Airdna, a California-based consulting and analytics firm that tracks Airbnb rentals. By 2015 that had exploded to 447 rentals". This dramatic increase in Charleston prompted residents to push for new laws addressing short term rentals. In my opinion, the method placing a cap on the number of nights that property owners are allowed to rent their properties is an infringement of their rights as property owners, depending on the zoning status of the property. The proposition is simple. If a property is zoned residential, it shall be illegal to rent short term for more than 30 days each calendar year, unless there is a full-time resident on site. For both mixed-use and commercially zoned properties, there shall be no cap the number of nights the property can be rented. This is a fair and sensible policy that will help to keep neighborhood houses filled with full-time residents but also allow property owners to leverage their assets. Also to that point, I believe that there should be no regulation on the status of the property (ex. Primary residence, secondary residence or investment property), only that it must be registered with the City, and include a property manager's name and contact information so that a single person can be held accountable in the event of any sort of incident.
Another pressing topic regarding short term rentals is taxes. Why is it fair that homeowners can rent their space, but not have to pay commercial tax rates? How can these people be taxed so that it levels the playing field? My proposed solution is quite simple. Airbnb without a doubt should have to pay taxes. As a company, they have far too much revenue to not be taxed or to only be taxed in certain areas. The solution to this issue is to subject Airbnb rentals to the same taxes, both state and local, that hotels pay in the zip code that the Airbnb is in. This would make things fairer for hotels and create revenue that can be put right into the City of Charleston. Just like hotels, the taxes would be well documented and Airbnb would write a check to the City, and state, each year. Also to that point, I would propose that properties that are rented short term for more than 100 days per year, without an onsite resident, should be subject to commercial tax rates, as such behavior concludes that the primary use of that property is running a business. This would be beneficial because it would dissuade people from using their properties solely for short term rentals and it could potentially increase revenue for the city.
Another issue that needs to be addressed is the idea of licensing and safety of the properties being rented. By law, hotels must have commercial business licenses and their buildings must meet certain specifications. In the case of Airbnb rentals, there is no current regulation of the properties being rented. Specifically, in Charleston, it would be advisable to put into effect the same 100-day rule that was mentioned above regarding tax rates. This would mean that if a property is rented for more than 100 days per year, without an onsite full-time resident, it would be subject to the same licensing requirements as a hotel along with mandatory property inspections. This can be easily justified due to the fact that the primary use of the property is for short term rentals and therefore, it operates as if it were a hotel. Again, this would discourage people from just using their properties for short term rentals and not actually having anyone live there full time.
It is easy to come up with a set of rules for short term rentals in the Charleston area, the difficult part is enforcing them. According to the Post and Courier, the City of Charleston has previously enforced the rules through "A handful of livability officers would pose as visitors on booking platforms, such as Airbnb and HomeAway, to find listings where short-term rentals weren't allowed. As the industry expanded to nearly 2,000 properties across the Charleston area, the city didn't have the time or the resources to keep up with the rampant violations. Only 77 cases have been successfully prosecuted to date.". It is evident that the method previously used by the City of Charleston to enforce the laws was ineffective. Moving forward, with a new set of rules and regulations, which covers short term rentals, there needs to be a new enforcement system. The enforcement system will be in the form of a tip-line that anyone can use to report what they may think is an illegal operation. This will make the scope of houses that need to be checked on much smaller, making it a more feasible task for city officials. This will also create a focus on properties that cause issues, as in theory, those bothered with the behavior of a property owner can report them.
In conclusion, this is a very difficult situation that Charleston and many other areas are facing. The negative consequences have been felt, and people want solutions, but it is not as easy as it may seem to fix the issues. It is my hope that through common sense policies and strategic enforcement, in the near future, cities like Charleston will be able to effectively maximize the benefits of short term rentals and minimize the negatives, creating a solution that is agreeable for all.
The mountainsErin Locke
The backside of the homeErin Locke
The rose gardensErin Locke
The outside view of the grand staircaseErin Locke
The "winter garden"Erin Locke
Dining at the Inn
HorsesErin Locke
The Inn at the BiltmoreErin Locke
Walking to the wineryErin Locke
