After months of debate stepped-up fines on short-term rentals — and relaxed rules on residents renting out rooms — go to Council tonight. But a decision might be delayed due to concerns about how to grapple with a rapidly-changing issue
Above: The logo for Airbnb, the tech giant that’s played a major role in expanding the short-term rental market and has sent lobbyists to Asheville
UPDATE: After lengthy and often contentious public hearings, on Aug. 25 Asheville City Council unanimously voted to delay changing the rules on “homestays” pending further review to eliminate possible loopholes. Council also voted 5-2, with members Cecil Bothwell and Chris Pelly opposed, to raise fines on short-term rentals, citing concerns about the impact on neighborhoods and the city’s affordable housing crisis. More in our Council report on that meeting.
After months of debate, hearings, campaigns online flame wars and policy wrangling, two major changes on how Asheville handles vacation rentals are heading to the City Council dais tonight.
There are two proposals: the first would relax the rules on such rentals if it’s someone renting out a portion of a home they live in (or homestays, as the city’s code calls them) and continue the ban on all other short-term rentals in residential areas, with stepped up enforcement and fines of $500 per day for those who violate it. Short-term rentals are already banned in the city’s residential areas, but relatively light enforcement and the previous $100 fine had failed to deter them.
The proposals emerged from a rough consensus that Council reached in May: relax the rules on homestays to allow people to rent out part of the home they live in, but try to stop people or companies renting out second, third, fourth, etc. homes. The public debate volleyed back and forth, with STR supporters asserting it’s a way for them to make money off a booming tourism trade and opponents asserting that STRs worsen an already drastic housing crisis and damage local neighborhoods by replacing tenants with vacationers.
The issue is one cities around the country are struggling with, as Blade contributor Joy Chin analyzed in an in-depth comparison and opinion piece in July.
In our city, Council’s consensus it didn’t last long. Shortly after the May meeting Council member Cecil Bothwell, who had expressed doubts about the STR ban earlier, wrote publicly that he favored allowing and regulating short-term rentals instead.
Views from Council members heading into tonight’s meeting are mixed, and there’s a real possibility that either or both measures might get delayed. The Blade reached all Council members except for Mayor Esther Manheimer earlier today. Four of those six (Vice Mayor Marc Hunt and Council members Gordon Smith, Jan Davis and Gwen Wisler) say they want to delay the vote on homestays while two (Bothwell and Council member Chris Pelly) are in favor of going ahead with it. Meanwhile, three are currently in favor of the increased fines (Smith, Hunt and Wisler), two are against (Bothwell and Davis) and one (Pelly) is undecided.
Votes vary
Instead of a consensus, Council members vary, sometimes widely, in how to tackle what they describe as a complicated and quickly changing issue.
Pelly says he feels loosening the changes to the homestay restrictions “are common-sense rules.”
“Honestly, I’m still up in the air on the whole notion of whether we should be increasing the fines on short-term rentals,” he tells the Blade. “I’m really going into the meeting undecided on that one. On the one side I don’t believe increasing fines is going to drive out short-term rentals in this community. I think the internet-based economy is here to stay. But at the same time I really have concerns about their impacts on certain neighborhoods.”
Wisler said while she was “generally in favor” of making homestays easier, “but I’m a little concerned we’ve gone too far” and that the new rules could create loopholes and might ask staff “to do some tweaking.”
“The devil’s in the details on this one and I feel like we’ve gone a little too far,” she says, adding that discussion of lifting the STR ban is “not on the agenda.”
As far as the increased fines, Wisler said, “I’m supportive of that, I don’t think it’s excessive. Don’t worry about it if you’re in compliance with the law. Plus, I also feel city staff does a pretty good job of giving warnings. We’re not looking to fine people, but I do think there needs to be a more significant disincentive.”
Smith, one of the main proponents of curbing the explosion of STRs in Asheville, says that he now had some concerns over relaxing the rules on homestays.
“This whole phenomenon is happening very fast,” he says. “My reading on other municipalities and how they’re contending with this is that they’re not contending very well.”
“Investor groups are finding ways around their rules and buying up housing stock anyway,” he adds. “I still have some questions on how those rules staff’s made can be enforced” so they work to allow locals to rent out rooms in their own homes and tap into the tourism market, rather than creating loopholes that an investment group or larger landowner could use.
As for the increased fines, Smith says he’ll vote in favor.
Bothwell remains opposed to the short-term rental ban and will support relaxing the rules on homestays.
“I think the homestays rules are reasonable and fair,” he says. “The much-heavier fines and hiring someone to cruise the internet looking for potential violations is a mistake. I don’t think it’s effectively going to make any difference. I’m going to vote against those as they’ve been proposed.”
Bothwell notes that “this is a really, really hard issue. There are an awful lot of people, local residents, who have been doing these rentals, making some money and doing it in good faith. I bet most of them, until this all blew up, didn’t even kn0w it was illegal. Some of them have put money into refurbishing their homes. At the same time I understand the neighborhood complaints and really believe the best way forward is to legalize and do a permit system.”
He says he’s looking at cities like San Francisco, where “they’re spending a great deal of money on enforcement, but at least when they’re legal we’re collecting fees” as zoning fines go to the school system. “Anything that people like and that makes money, it’s really hard to enforce a prohibition. I think we’re looking at a lot of expense.”
Davis is also skeptical of the higher fines, but has some conerns about relaxing the homestay rules as well. He believes neither matter will come up for a final vote tonight.
“I don’t feel like homestays are the answer to the short-term rental situation and I don’t think there will be movement tonight, that may end up going back to staff,” Davis tells the Blade. “I also think the short-term rental piece won’t moved forward, in fact, I’m almost certain it won’t.”
“I would like to see [short-term rentals] permitted it and regulated,” Davis said. “It’s a work in progress and I don’t think it’s ready right now.” So far, he says, he doesn’t see any city that’s developed a perfect solution to the issue.
Hunt also wants the homestay rules delayed after, he claims, extensively researching the issue.
“In cities that have liberalized homestay regulations, some of them are now stepping much more carefully, they’re tightening regulations, most are dramatically increasing their enforcement,” he said, due to the impact they had as well. “This is an incredibly dynamic time for cities across the country due to the market forces and growth of this industry.”
Concerns about “neighborhood integrity,” he says, drive his vote. He’s fine with allowing homeowners or renters to supplement their income, but not companies using the homestay rules as a cover and is worried the current proposal would allow that. He believes that stepped-up enforcement and steeper fines are necessary, something the city has to “step up to” and worries about going too far in allowing short-term rentals “because it’s very hard to go back.” He notes that Charleston, S.C. has gone so far as to levy fines of over $1,000 and threaten jail sentences on those who break its STR restrictions.
He thinks STR proponents’ concerns “are legitimate issues” but believes “more compelling are the concerns about the impact on neighborhood integrity, land values, rental rates and affordability.”
“The market dynamics, the pressures on this in Asheville are as intense as anywhere in the U.S.,” he says. “I don’t think anybody has it right yet.”
In come the lobbyists
Tech giant Airbnb, one of the main companies behind the surge in short-term rentals, has also weighed in, sending in lobbyists to meet with local officials and organize meetings to rally support for STRs. The Asheville area has some of the most Airbnb listings in the state, exceeding much larger N.C. cities like Charlotte and Raleigh. Starting in June, city emails reveal, lobbyist Jeff Tippett of the Raleigh-based firm Targeted Persuasion started contacting Manheimer and Council officials to try to arrange a meeting with Max Pomeranc, the company’s regional head of public policy. Tippett also requested documents on the ordinance changes from city staff.
Multiple attempts to contact Pomeranc to discuss what specific policies the company was endorsing have not been returned. However, Bothwell noted that the company has submitted some draft proposals to city staff. Earlier today, the Blade requested those documents.
Wisler says that while she spoke with Airbnb’s representative, she remains in favor of the city’s current STR ban and higher fines, and attributes some of the flood of emails she’s received to the lobbying campaign.
“The biggest thing they were troubled by in our ordinance was not allowing accessory dwelling units for Airbnb,” “They have clearly put out a public relations campaign, the number of emails we’ve received is a lot, from people who don’t live in Asheville. They’ve definitely made a pretty significant campaign.”
Smith says he hasn’t spoken with Airbnb lobbyists but doesn’t think their pushing hard against the city’s ordinance changes because “they’re just going to tell people how to get around it, because that’s what we’re seeing in other places.”
Davis said he that attempts to arrange meeting with Airbnb representatives fell through, and he hasn’t spoken directly with them about the issue.
Hunt notes that he met with Pomeranc in July, and felt it productive, but “they’re clearly advocating for things that may not be in the interest of Asheville.” He doesn’t feel that the amount of emails he’s received is from the lobbying campaign, but from the local interest in the issue.
Bothwell attended a meeting organized by Airbnb to rally local STR supporters.
“Their main concern, of course, is that they wanted to keep it legal,” and were trying to pass along regulations they asserted worked in other cities, “but I haven’t seen anything recently.”
However things turn out tonight, no one on Council sees the issue goes away.
“This set of decisions we’re making regard short-term rentals and homestays is the most profound Asheville City Council will have made in years,” Hunt says.
“No matter what we decide tonight, some folks are going to be happy and some are going to be unhappy,” Smith says.
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