
By Katie Loovis, Vice President for External Affairs, The Greater Chapel Hill-Carrboro Chamber of Commerce
The short-term rental (STR) market has taken off nationally and Airbnb leads the pack here in Orange County. With roughly 50 percent year-over-year growth, $1 million in local monthly revenues and nearly 20 percent of all visitor stays in our community, Airbnb has many people talking. (See this table for some of the latest facts and figures.)
Here are some of the questions we are hearing:
- “Isn’t this just another market innovation (think Uber and food trucks) that allows property owners to earn a side income and connects tourists to lower-cost options?”
- “Is this here to stay and should hotels simply adjust to this new reality?”
- “What are the rules and regulations on hotels vs. STRs? Are they taxed and inspected the same? Is there a difference — and should there be?”
- “Are STRs affecting the character of our local neighborhoods, housing affordability, and/or having any other negative or positive economic impacts?”
- “Is there a difference between owner-occupied homes (when the owner stays in the home with the renter; aka “Homestay”) vs. second or third homes that are purchased exclusively for commercial purposes and used as permanent vacation rentals (aka “Whole House STR”)?
All these questions led us to ask the most obvious question: Are STRs even allowed in Chapel Hill and Carrboro? As it turns out, based on our research, the answer is largely, no.
- In Carrboro, STRs (both Homestay and Whole House STR) are only allowed in certain zones and require a permit (“Tourist Home” and “Bed & Breakfast”).
- In Chapel Hill, Whole House STR is only allowed in certain commercial zones and requires a permit (“Tourist Home”). Homestay is only allowed with a permit (“Home Occupation”) for an owner-occupied, home-based business that takes up no more than 35 percent of the home nor more than 750 square feet.
There are approximately 360 Airbnbs on any given night in Orange County and a majority are offered in Chapel Hill and Carrboro. (Note – this figure is just Airbnb and not counting the many other STR platforms, such as HomeAway, FlipKey, or VRBO.)
While STRs are generally not permitted in Chapel Hill and Carrboro, very little enforcement of local rules is taking place. Other popular destination communities like ours (think Asheville and Boulder) are setting and enforcing new STR rules, as have other communities across North Carolina.
The lack of clarity and enforcement of the rules in our community is holding up nearly $100 million in potential investment for new hotels and a new conference center. Maintaining the status quo means delaying or foregoing as much as $1.5 million in future city and county property taxes.
The Chamber is carefully considering a position on STRs. Ultimately, we think local government will have to figure out how to enforce the current laws or change the laws.
I invite your input and insights (please comment below), and recommend two helpful resources as you consider your own opinion on the matter: Presentations capturing the most recent state-of-play by the UNC School of Government and the Orange County Visitors Bureau.
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I favor and support Airbnbs and feel that discouraging them is bad policy. They provide reasonable, flexible and transparent access to our communities, allow part-time incomes for our citizens and provide diverse possibilities for travelers. Stop the nonsense of pretending that limiting their use is in any way protective of our community.
Thank you Gary – Do you think the current short-term rentals should be in compliance to the current zoning rules (ie: permit required, only allowed in certain zones) and do you think they should have a health and/or fire inspection?
I agree with Mr. Phillips. Protecting corporate interests by squashing the competition is unfair and not free enterprise that, supposedly, the Chamber advocates.
I totally agree, Mr. Phillips!
I agree, Mr. Sherwood!
MW Sherwood – Thank you and I pose the same follow-up question to you that I asked of Gary: Do you think the current short-term rentals should be in compliance to the current zoning rules (ie: permit required, only allowed in certain zones) and do you think they should have a health and/or fire inspection? Your feedback would be helpful as The Chamber absorbs input and determines what our position will be. Thank you.
I believe that our local governments and our local chamber should be working to legalize and regulate private home rentals in a fair, reasonable, and equitable manner.
A private home rental is a private residence that is rented to guests or tenants for any amount of time.
I believe that any specific problems directly attributable to private home rentals can be addressed, resolved, or eliminated by reasonable operating regulations.
I support reasonable minimum safety standards for all private home rentals, including long-term rentals.
I challenge unsupported assertions that private home rentals are the sole, primary, or even substantial cause of many of the issues, problems, and changes that have affected Orange County in recent years. For example, while rising property values and rental rates may affect communities (both positively and negatively), private home rentals should receive neither the credit nor the blame for such changes without reliable supporting data.
I disagree with the assertion that short-term rentals negatively impact the availability of affordable housing. In fact, short-term rentals improve access to housing. People on fixed incomes may be empowered to retain home ownership with the added income from a short-term rental in a portion of their home. Communities can benefit economically from the introduction of short-term rentals, with the financial outlay of hosts and guests for goods and services procured within that community. Local living economy, anyone?
While there are differences between the various types of private home rentals, they each have their own appeal to diverse travelers, and none of these options are inherently detrimental to the community or to Big Lodging. My experience is that some guests specifically prefer the availability of onsite hosts, while others value their privacy and prefer to be left on their own. It is always good to have choices. The owners and operators of all private home rentals and their tenants should be responsible and accountable to each other, to neighbors, and to the community.
I support the enforcement of reasonable regulations. I challenge the argument that short-term rentals are inherently different from longer rental periods. What inspections and regulations should apply to a seven-day rental that don’t apply to an eight-day rental?
I respect the Chamber, and believe they should be required to demonstrate that the views and positions they take actually reflect the views and positions of the businesses they claim to represent. Without such data, it is inappropriate for the Chamber to take any formal position relative to private home rentals – whether for or against.
I support consideration of the views and concerns of out-of-town developers and professional organizations such as the North Carolina Restaurant and Lodging Association in determining what regulations may be reasonable and appropriate. I oppose consideration of the views and concerns of such organizations when the objective is to eliminate competition or to obtain or preserve an unfair competitive advantage.
I support consideration of the views and concerns of Orange County residents and local businesses in determining what regulations may be reasonable and appropriate. I oppose the consideration of the specific views and concerns of out-of-town developers relative to specific private home rentals as evidence of a broader problem that relates to many, most, or all private home rentals. The solution to specific problems is to adopt reasonable enforceable regulations which address those specific problems.
I support consideration of the views and concerns of property owners and property managers who operate or want to operate private home rentals.
As Orange County is a desirable visitor destination, I support consideration of the wants, needs, and desires of our visitors. These include tourists, visitors coming for special events (festivals, graduations, weddings), business travelers (job applicants, people seeking to permanently relocate, artists, and performers), and visitors for other reasons (hospital patients, adoptive parents). The undisputed fact that private home rentals exist in increasing numbers is persuasive evidence that there is a very substantial demand for different visitor housing choices, including the option to stay in private home rentals.
I agree with the all the comments at this point. I encourage the chamber to support free enterprise it’s good for the community in many ways.
Concur with all the rational that Salette stated. STRs provides a wonderful alternative to hotel accommodations that showcase our town in a way that has never been possible before. Stop building mega complexes in our community for large out of county corporations, and let competition reign.
It’s easy to characterize this issue as the little guy (home owners trying to get a little rent) versus the big guys (the corporations that own hotels). We must remember that Airbnb is now one of the largest corporations in the world (valued at $38B in 2018) and hotels come in all shapes & sizes, large & small, locally owned or not.
In any case, hotels must comply with health and safety laws which are in place to protect everyone. Airbnbs are not being asked to maintain any kind of standard. it’s not a level playing field.
Armand, new hotels in this area are generally multi-story high-rise structures. Guests typically take an elevator to one of a hundred or more indistinguishable doors when they arrive. The elevators don’t work in an emergency evacuation, so of course there should be lighted exit signs and directions to the stairs, which is not the way guests came in. Now, how many times have you had to exit a home and weren’t sure how to get out? Usually, it’s pretty easy to remember how you came in. What is the difference between exiting a house that you’ve just rented for the week or exiting a house that you’ve just rented for a month? Are you saying that all rental housing should comply with the same health and safety laws as a high-rise hotel? Wouldn’t that be a bit onerous for small landlords?
Did you know that AirBnB is already automatically paying the same taxes as hotels? So as far as economic development goes, it’s already a level playing field, and more government regulation on small local businesses seems to run contrary to the values of a local living economy.
Finally, when I ran a short-term rental in another town, I paid one of my neighbors $25 an hour to clean. I paid another neighbor a similar rate to take care of the lawn. Do you know if the hotels in question have committed to paying a living wage or a housing wage?
I think there is a huge issue that hasn’t been addressed here as of yet. I’ve lived in several large cities (Hoboken, Manhattan, and Atlanta) where Airbnb has become a large problem. Here is the gist of the issue:
As Airbnb’s rise in popularity, in rate, and in profit, they begin eating into the market supply of homes and available apartment rentals. In many cases, it begins to be more profitable for a management company of an apartment or condo building to set aside a large amount of their available inventory to these STR’s. The law of supply and demand states that as these STR’s begin eating into the supply of apartments and condos, the purchasing a condo or renting an apartment in the area will increase.
I have seen this happen many times, and it has only increased rental and purchase prices in these markets. It begins to put apartment prices out of reach of the middle class graduates or families.
Yes, that is the narrative that Big Lodging has pursued. Do you have any evidence that apartment or condo managers are doing this in Carrboro?
https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html
I agree completely with Mr. Phillips and Sherwood. It is part time income that helps tremendously. Hotels cannot offer affordable rooms for multiple family members.
Agreed Katie, I lived in Chapel hill paying almost 8000 for property tax a year, and my next door neighbor using their basement as Airbnb, I have to deal with different strangers every day when they used the path on the lawn to the entrance, and you don’t know who’s parking along your house, as a homeowner in this community should have a right to know whether they are permitted and should have health/fire inspections too