Wednesday, February 8, 2023

Update: After three years, Wilmington approves partial short-term rental plan

For years, proposed regulations have been rejected as either too strict, or too loose. The latest decision side-steps the most contentious topic: whole house rentals in residential areas.

According to Wilmington city staff estimates, there are about 400 active short-term rentals in the city. (Port City Daily photo | City of Wilmington)
According to Wilmington city staff estimates, there are about 400 active short-term rentals in the city. (Port City Daily photo | City of Wilmington)

Update: Wednesday, 6:00 a.m. — Wilmington City Council approved the proposed regulations on short-term rentals.

However, the regulations leave open the issue of whole house rentals in residential areas.

For property owners, many who live in the city part-time, or own properties as an investment, this is the most contentious issue.

Whole house rentals have been the target of the bulk of accusations over the past three years. Detractors claim that the transient population of short-term, whole house rentals in residential years could cause an increase in crime by fostering drugs, prostitution, and other crime.

Other claims include that whole house rentals will cause on-street parking crunches and that whole house rentals reduce the affordable and workforce housing stock.

On the other hand, advocate say there is no evidence that whole house rentals increase crime, for example from police reports from Wilmington or other benchmark cities. Whole house rentals are popular with tourists in the region’s beach towns and, based on public comment in the past, there are numerous whole house rentals currently operating or planned as part of the downtown’s tourist industry.

While regulations approved on Tuesday night appear to prohibit whole house by default – that is, by approving them only in commercial areas – they do not. Instead, the regulations postpone the vote until fall.

Council members Paul Lawler and Mayor Pro Tem Margaret Haynes voted against the regulations. Council member Kevin O’Grady appeared to step out before the final vote, although he did vote against amending the proposal and, in general, has voiced concerns about allowing short-term rentals in the city’s historic district.

City council plans to vote on whole house rental regulations at their Oct. 2 meeting.

WILMINGTON—After three contentious years of debate over short-term rentals, Wilmington City Council will hold a public hearing on proposed regulations.

The regulations council will consider on Tuesday, June 19, represent the results of the latest joint session of city council and the Wilmington Planning commission.

In general, the new regulations address “homestay” and “whole-house” rentals separately.

Homestays are defined as “renting rooms with the host living in the residence full-time,” and would be allowed in all residential districts but limited to some commercial and mixed-use districts.

“Whole-house” rentals, as the name implies, are defined as renting the entire house, as would be allowed provided the “host” must themselves live in the house for at least half the year. These would be prohibited in residential areas, though they would be allowed in some commercial and mixed-use districts.

An overview of proposed regulations on short-term rentals. (Port City Daily photo | Courtesy City of Wilmington)
An overview of proposed regulations on short-term rentals. (Port City Daily photo | Courtesy City of Wilmington)

The regulations abandon previous attempts to find an agreeable mandatory separation distance. The planning commission had formerly proposed a mandatory 400-foot separation between the property lines of any two rented properties – about a downtown city block of space; the commission proposed a 650-foot separation outside the city’s 1945 corporate limits.

Also dropped from the latest proposed regulations are requirements for on-street parking.

The plan does require the renters to carry $500,000 in homeowner’s insurance and register their property with the City of Wilmington each year.

In addition to the registration requirement, the city has been considering for some time adopting short-term rental software – already in use by the county – that would allow the city to identify online rentals and cross-reference them with property records. The software would allow the city to track rentals, as well as police incidents and civil violations.

Related story: New software will redefine how New Hanover County tracks Short Term Rentals

According to Jennifer R. Maready, Wilmington’s finance director, the city has not yet decided if they will use the software.

A difficult compromise

The city’s planning commission has struggled for years to come up with regulations on AirBnB, VRBO, and other short-term rentals. Several public information and planning sessions have dead ended, with proposed regulations shot down as either too draconian or too lax.

Related story: Short-term rentals debate about to hit the two-year mark without a decision

Attempts to model regulations on “benchmark cities” were apparently unhelpful. According to a May staff report, “The benchmark research shows that there are no clear best practices or standards for addressing the issue of peer-to-peer rentals. While many cities are working towards developing regulations, other cities have adopted standards and are working on amendments to those standards.

At public hearings, there seemed to be little middle ground on short-term rentals for Wilmington residents.

Advocates have routinely pointed to the increase in Room Occupancy Tax, a boost to the tourist industry, and the rights of homeowners to earn revenue from their residents. Detractors have pointed to the potential for crime, on-street parking issues, and other disruptions of neighborhoods – largely in Wilmington’s historic downtown district.

If city council approves the regulations it may not end the debate over short-term rentals, but it will, after years of back and forth between council and planning commission, put some actual ordinances on the books.

Wilmington City Council meets it City Hall on Tuesday, June 19, at 6:30 p.m.

Supporting Documents – Short Term Rental – City of Wilmington by Ben Schachtman on Scribd


Send comments and tips to Benjamin Schachtman at ben@localvoicemedia.com, @pcdben on Twitter, and (910) 538-2001.

Related Articles