WILMINGTON — It took several years for the City of Wilmington to finally agree on regulations and restrictions for short-term rentals and full-on enforcement of the new rules will go into effect on May 1, 2020, but as expected, the new requirements are putting some homeowners effectively out of business.
The new restrictions put a 400-foot distance requirement between short term rentals in residential districts leading the city to enact a ‘lottery’ style system of picking which homes will be allowed to operate as a short-term rental.
According to City Spokesman Dylan Lee the city has seen more than 150 short-term rentals register with the city per the new ordinance, not all subject to the lottery.
“At the time of the lottery, we had 158 total registrations. Of those, 93 were subject to the lottery ( whole-house rental in a residential district). There were 20 that “lost” and will be subject to the 1 year amortization period (can keep operating through May 1, 2020 if they register). As of May 31, another 20 registrations had come in. Not sure the locations as they relate to the 400-foot buffer,” he said.
Despite the rules going into effect earlier this year, there are still hundreds of short term rentals that are not registered with the city yet.
“We are currently enforcing violations and we will be sending courtesy letters to several hundred operators to let them know of registration requirements,” Lee said.
The restrictions
For those wanting to operate their home as a short-term rental, registration is required and can be found online.
“Applicants may check the Registered Short-term Lodging and Bed & Breakfast map to see if their property is sufficiently spaced from existing registered short-term lodgings. If spacing is not sufficient, registration for whole-house short-term lodgings in residential areas will be amortized,” according to the city’s website.
It’s important to note that the 400-foot buffer zone applies only to whole-home rentals in residential districts, that is, homes that are rented out completely without a homeowner on site.
Whole-home rentals also require that an owner or ‘local operator’ be within 25 miles from the home and available 24 hours a day.
Homestays, on the other hand, is when a homeowner resides in the house and rents a room to visitors.
One of the concerns about short-term rentals has been the myth that homeowners do not pay taxes on their rentals as hotels do — but that is not the case.
According to an Airbnb press release, “Airbnb, the world’s leading community-driven hospitality company, announced today that it remitted over $24 million in home sharing tax revenue on behalf of its North Carolina hosts to the state in 2018.
“Collecting and remitting hotel taxes can be very complicated. The rules were designed for traditional hospitality providers and large hotel corporations with teams of lawyers and accountants. For this reason, Airbnb has partnered with over 400 local governments throughout the U.S. to collect and remit taxes, making the process easy for hosts to pay their fair share while contributing new revenue for local governments,” the release continues.
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