Monday, December 4, 2023

Residents take issue with short-term rentals in historic district

The first block of North Front Street. Photo by Ben Brown.
Some locals are fighting to keep short-term rentals out of the residential zones of downtown Wilmington’s Historic District and move them into the central business district. File Photo.

The advent of websites like Airbnb and others similar to it have given travelers an opportunity to find accommodations other than standard hotels when they visit new cities.

While that has been great for visitors looking for a unique, local experience, it has raised many questions of the legality of such businesses, which are mostly unregulated, in cities across the nation.

That debate has now come to Wilmington. Some residents in downtown Wilmington’s Historic District, many of whom have spent their time and money renovating the old homes that line the streets, are speaking out against short-term rentals. Also known as vacation rentals by owner, or VRBOs, they have been popping up around town in greater numbers as property owners are seizing an opportunity to make extra money off their homes.

According to those against the practice, city codes, which state that occupants VRBOs must stay a minimum of seven days, make such rentals illegal.

“These businesses don’t belong in residential areas,” said Mary Delmar, a 6th Street resident and owner of Delmar Properties, a real estate company. “These areas are supposed to be for homes, not hotels.”

According to Delmar, several houses adjacent to hers, including the ones on either side of her residence, have been rented out as VRBOs several times, often for just two or three days. Many of the visitors have turned those places into party houses on the weekends, Delmar said, leading her to complain to both the guests and the property owners.

“Some of them told me they paid good money and they’re going to party as much as they want to,” said Delmar, who shares a driveway with one of the next-door properties. “Our houses are close together. They’re disruptive.”

Since those complaints, Delmar said property owners, perhaps realizing they are under more scrutiny, have rented to “quieter” guests. In October, Delmar wrote an email to the mayor and entire city council outlining her concerns as both a 21-year veteran of the real estate industry and a homeowner.

“It is like a cancer growing in our Historic District,” Delmar wrote in October. “Basically they are businesses that get no permission, follow no rules and have no consideration for anyone around them.”

She also alerted Sylvia Kochler, president of the group Residents of Old Wilmington. Kochler, a trained lawyer, studied the issue and sees it not as a matter of residents versus businesses, but as one of zoning.

“It’s a public policy thing that vibrant neighborhoods are zoned to have businesses and residential next to each other,” Kochler said. “From time to time, businesses intrude.”

Though the Historic District encompasses much of downtown, not all of it is zoned the same way. While there are some parts south of Market Street, especially by the river, that are zoned as mixed use or business, the majority is zoned as residential.

“ROW is not anti-business. We are great boosters and supporters of the central business district. This is where we shop and eat,” added Kochler. “We just don’t think short-term rentals belong in residential areas because they change the character of the neighborhood.”

Kochler has no issue with short-term rentals further up Front Street in the heart of the central business district.

“There are many apartments and buildings that are dilapidated and can be bought and fixed up,” Kochler said. “Those would be perfect VRBOs. They’re in a central location in an area that’s zoned for businesses.”

Short-term rentals in the residential district, however, are a different story. Based on her reading of the city codes, she believes they are not permitted in those areas.

Fellow downtown Wilmington resident Daniel Rustine disagrees. He said he recently remodeled the downstairs part of his 8th Street home for the purpose of renting it out on Airbnb in order to supplement his income and help him pay rent.

Rustine, who lives on the top floor of the house, said his guests have always been courteous, and he has never received complaints from neighbors.

“On Airbnb you have to review guests and they have to review me,” Rustine said. “So they have incentive to behave because otherwise they’ll get a bad review and no one will want to host them.”

Rustine said he has been paying room occupancy taxes for his rental, which hotels and licensed bed and breakfasts also have to pay and helps the county pay for tourism-related projects, such as getting more sand on the local beaches.

“The push by ROW to ban them is blowing my mind,” said Rustine. “It’s detrimental to people like myself and the tourism industry. If we want to be a tourism-friendly city, we need to have all these options available. Not everyone wants to stay in a typical hotel room.”

While Rustine believes the codes should be updated, he does not think VRBOs should be regulated like hotels unless there are “major concerns.” Stricter rules, Rustine said, would kill the industry.

He agrees that problems could arise if large, out-of-town management companies are running the short-term rentals with little to no on-site supervision. For him and other locals he knows who run VRBOs out of the homes they live in, however, he feels a ban would be unfair.

“It’s not like we’re not invested in the neighborhood,” said Rustine. “We live here in the community, too.”

The city is now looking into how best to deal with the issue. According to Wilmington city staff, based on their research of legislation in other cities like Asheville and San Francisco, they have not found commonalities or trends across the board in terms of policies. Each city has tailored ordinances to fit their unique needs.

Councilmember Kevin O’Grady said this is important to remember in the next few months when Wilmington looks at ways to address these short-term rentals.

“We need to define short-term rentals and the districts where they’re permitted,” said O’Grady, a staunch supporter of preserving many historic elements of downtown. “In my view, there’s a clear line. There’s an area that’s residential, and businesses don’t belong there.”

Though city staff have already done preliminary research, they have now been instructed to fully look into the problem locally. They intend to hold a public information session in March and collect that information for inclusion in their report to council, which they hope to present in August. A public hearing on any proposed resolution or ordinance related to the matter may also be scheduled.

Rustine said he plans to be at the meetings speaking up for his short-term rental, which he says is more work for him but makes more money than long-term rentals.

“I hope the city can get together and get something that works for everyone,” he said.

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