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.