AirBnB and its ilk (some of them at least) are back before Council as it tries to nail down rules for homestays and three members have their final meeting
Above: Vice Mayor Marc Hunt. File photo by Max Cooper.
When Asheville City Council members took their place on the dais Nov. 17 it indicated a changing time in many ways. This was the second of two meetings that took place after the election upsets earlier this month. Specifically, it was the last meeting for three Council members — Jan Davis, Marc Hunt and Chris Pelly — before three others — Keith Young, Brian Haynes and Julie Mayfield — take their place Dec. 1.
Mayor Esther Manheimer began the meeting by noting that one of the evening’s controversies actually wouldn’t be on the agenda. Rather than vote on a new policy for power substations in the city following major controversy over Duke Energy proposing to put one near Isaac Dickson Elementary, the matter would be put off for almost a year. Duke recently scaled back its plans considerably in the face of public pressure from an array of groups and constituencies.
“It has become apparent there’s a need to look for an alternate site to the substation location next to Isaac Dickson Elementary School,” Manheimer said. “I’ve been able to speak with Duke about that as well as the Isaac Dickson PTO and we have an agreement; I’m looking at a letter Duke has provided me. Duke will agree to forgo the permitting process on any of the three locations they’ve purchased in the city of Asheville for substations until 2017 so long as we delay our consideration of the buffering ordinance tonight. In addition, they have stated in this later that they will actively look for a new site instead of the Hill Street site.”
She added that the community groups involved agreed, and so did Council, delaying the matter until August of next year.
Indeed, like the meeting a week before, the evening proved eventful on a number of fronts, as city bus drivers showed up to demand change with a management company they assert causes major issues, and Council revisited contentious changes to rules aimed at allowing people to rent out part of their home on services like Airbnb.
End of service
But before those political battles, it was time for applause and appreciation, as Council marked the departure of its three outgoing members, with Manheimer presenting them with a plaque and touting what Council saw as their accomplishments, noting that it was a “bittersweet” moment.
First up was Jan Davis, who concluded 12 years on Council that night. A downtown business owner, Davis had a long career in shaping public policy, especially pushing for the renovation of the Civic Center (the lobby was recently renamed for him), community events, the advancement of the water system and the revival of downtown.
Davis’ “unique leadership ability enabled him to build consensus on complex and controversial issues,” Manheimer said, reading the official proclamation. Such traits, she continued, have “earned him the admiration and high regard of those he has come into contact with as well as the affection of his fellow public servants.”
“In a city like this, it’s better today than it was then,” Davis said of how Asheville has changed during his tenure. “A lot of people will tell you everything’s better in the past. Well it’s not. We’ve come a long way.”
He also asserted that incoming Council members should get to know city staff and heed their advice, “recognize that they probably have more talent in their field than you do. Listen to what they say and you try to make it work.”
Hunt, the vice mayor, came next. Hunt had, the proclamation asserted, help put the city on sound financial footing and improve the multimodal transit through his emphasis on infrastructure like greenways and bike lanes.
He also ended up making a number of controversial calls that probably played a role in his defeat a few weeks before (though Mayfield, a close ally, won a seat). The proclamation Manheimer read praised him for his frankness and, in her view, his willingness to make tough decisions as a public servant.
She called him “a powerful influence for good in the growth of the community, Marc was unique in his sensitivity for doing what was best for the entire community. He had courage in expressing his convictions and a special way in dealing with complex issues.”
“I’ve really come to appreciate the wisdom that comes with retiring gracefully from City Council, as opposed to going another way,” Hunt said, drawing laughter. “This work is challenging, it’s gut-wrenching at times.”
He praised Manheimer’s leadership, saying she used the position’s limited authority effectively. Like Davis, he praised city staff, including City manager Gary Jackson, extensively.
“We have a dedicated and loyal staff that care deeply about this city,” Hunt said. “Gary Jackson, you’re a special person and you make all of us on Council look better than we deserve.”
He also congratulated the incoming Council members and advised them to rely on the support of the community and staff.
Pelly, a realtor, made his first mark in politics as an advocate for East Asheville, particularly for better infrastructure and sidewalks. He ran for Council multiple times before winning a seat four years ago. While on Council, he continued to make neighborhoods a priority, setting up the neighborhood advisory board and the city-backed festival of neighborhoods.
“Chris has been a powerful influence for good in the growth and progress of the community,” Manheimer read, adding that he “demonstrated in many practical ways his deep and genuine love for this city and the surrounding area.”
“The reason Council is successful is because we have such a strong staff here, beginning with City manager Gary Jackson,” he said. “Any of the results and any of the successes that we’re enjoying here in our community is largely due to such a terrific staff.”
“So much of what we try to do here is balance competing interests: economic growth, the preservation of a community, the preservation of a landscape, city services, trying to keep the tax rate as low as we can,” he continued. “It’s a constant balancing act. We’re going to be hearing issues tonight that try to strike those same balances here.”
Six months
The next point, however, marked a shift from the “era of good feelings” vibe to a call for Council and staff to take a different route from the one they planned. On Council’s consent agenda (a list of usually routine items passed on a single vote) was a six month extension for First Transit, the company that’s managed the city’s bus system since 2008.
Due to a conflict between federal and state law, the city has to hire a management company to deal with the unionized transit system employees. For over a year, transit drivers and advocates have asserted that First Transit was failing to fulfill its duties, leaving buses lacking critical maintenance, drivers overworked and routes delayed.
After the issues were raised publicly last month, Council countermanded the city’s multimodal commission (which had opted to give the company another year) and decided to put the management of the system up for bid, potentially opening it up to a new company.
However, putting out that proposal would — Jackson declared — take time, hence the six month extension while the city crafted the terms for putting the contract up for bid and sought a new company.
“We’re in that process right now and the point of this extension to July 1 is to allow for that process, o get proposals from competing management companies, to evaluate the merits of those proposals and then make a recommendation to have the next management company in place,” he said. “To get us through that transitional period, an extension is recommended.” At the same time, First Transit would be renegotiating the contract with the union.
But both transit advocates and drivers warned that things would only get worse over the coming months, given First Transit’s record.
“I would prefer it be three months rather than six months, whether that’s administratively and financially feasible I can’t speak to,” advocate Sabrah N’haRaven told Council, but took issue with the staff’s assessment that the extension would help the system operate in a safe and efficient manner. “There are serious concerns if this system is operating in a safe manner now and I’m not seeing any reason to believe that it will do so or it will change to operate in a safe and efficient manner while this is in place. If you approve it for six months it should be because it’s a bureaucratic necessity, without pretending safety has anything to do with it.”
Diane Allen, a driver and local union president, noted that her bus was recently shot at, shattering one of the windows, but with no concern from the management company.
“They’ve not asked about the wellbeing of the passengers nor the wellbeing of the employees,” Allen said. “Six months is way too long. We’ve waited long enough to make sure that our taxpayer and our riders and our employees are in a safe environment. We are missing routes, people are getting terminated from their positions because the buses are not coming at all.”
I’ve been hearing from some constituents about the missing buses,” Council member Cecil Bothwell said. “From what I’ve heard some of the buses haven’t been maintained to the point that they’re not available at a given time. If that’s the responsibility of the management company, it seems like that’s a serious shortcoming and I would ask ‘do we need to take six months?’ is that just the way it has to be structured.”
“Based on past contracts we’ve done, when we’ve gone through the process it’s been that intense,” Transportation Director Ken Putnam claimed.
Bothwell then asked if there were ways to push First Transit to improve its service over the next six months.
“The reports we’re getting don’t necessarily agree with what you’ve heard tonight but I don’t necessarily have all the hard data,” Putnam said. “But yes, we can look into that and make sure the buses are on route.”
But driver Linus Weston, who’s worked for the system for 13 years, said the situation had declined immensely under First Transit’s management.
“We know our job, what can be done, what can not be done,” he said, but First Transit refused to listen. “Right now we have eight buses down” and, he claimed, the system is so short-staffed that many drivers worked on their scheduled days off and were often exhausted.
As for scrutiny from staff, he asserted that “this has been going on for eight years and we ain’t seen nothing yet.” He warned Council that “six months, that’s too long. I already see drivers leaving, pretty soon there ain’t going to be a bus system left to run.”
“If we could do it quicker I’d prefer to do it quicker,” Council member Gordon Smith said, but noted that six months was likely as fast as things could go. “To everyone out there driving the buses, every single day I just want to say thank you. I realize how hard this work is that you’re doing and the service you’re performing for every citizen in the city.”
Hunt asked staff to take any measures it could “and redouble our efforts” to ensure First Transit improved its service. Council then approved the six-month extension unanimously.
Home, sweet homestay
The major item of the evening, however, was the latest chapter in a long-running battle over housing in Asheville — whether it’s a bedroom or a whole home — being rented out on sites like Airbnb. The issue has proven intensely controversial.
The city’s code defines a short-term rental as someone renting out a whole home to travelers, while someone renting out a room in their home is defined as a “homestay.” The former is banned in the city’s residential neighborhoods (though notably not in downtown) while the latter was allowed, with permits, inspections and a number of other constraints. However, as Asheville simultaneously became a major tourism destination and faced a sharply rising cost of living, many short-term rentals had popped up without ever going to the city for a permit of any variety. Asheville has more short-term rentals on Airbnb, by a good margin, than any other city in the state.
For over a year, this situation has been the topic of intense debate. Critics of the practice assert that it’s worsening an already-dire housing crisis — because every unit on Airbnb or a similar site is one that isn’t available for tenants or homeowners — and that by injecting tourists into residential neighborhoods, it poses a threat to their very fabric.
On the other side are Airbnb operators and their supporters, who assert that they’re also trying to make some money off a tourism boom they see as mostly favoring hoteliers while some homeowners are trying to survive the same cost-of-living increases that leave many renters in a hard situation.
For one in-depth analysis and opinion on this topic, read Joy Chin’s piece from earlier this year.
Council — with some notable dissent – opted for a two-pronged approach earlier this year. On the one hand, it stepped up enforcement of the previously lax ban on short-term rentals, upping the fines to $500 a day and hiring a staffer to investigate and enforce the rule more vigorously. Last month, some operators renting out whole homes shot back with a lawsuit claiming the city’s existing rules aren’t legal.
At the same time, Council also sought to loosen the rules on homestays a bit, eliminating — for example — requirements that the homes had to be of a minimum size and had to be 500 feet apart. Homestay operators would have to purchase a $200 annual permit and meet annual safety inspections.
But cities around the country are struggling with exactly how to tackle this same situation. At the same meeting in August that Council bolstered the fines with some dissent (from Bothwell, who believes the city should allow and regulate short-term rentals), they demurred on new homestay rules, partly out of concern that if not carefully done it could have unintended consequences that would make the short-term rental ban pointless.
Even the tech giant at the center of much of this debate, Airbnb, got involved, lobbying Council and sending its lawyers in to recommend changes to the homestay rules. Notably one of the changes it recommended — and that staff adopted in their initial proposal — would have eliminated a requirement that the full-time resident stay there overnight while the homestay was being used. Instead, Airbnb proposed that the resident only had to live there half the previous year. The company also recommended that accessory dwellings be allowed as homestays, a change staff did not adopt.
Critics were concerned this would create a loophole that would throw open many short-term rentals to essentially still getting to operate by claiming they were homestays. At the same time, some short-term rental supporters were concerned the changes didn’t go far enough by, for example, not allowing accessory apartments to be rented out to travelers.
Now the proposal was back before Council. While it still allowed more people to use homestays than the previous rules did, it also made some changes from those proposed in August. The requirement that the residents had to be in the home overnight while the travelers were renting a room was back, as were more detailed rules about who qualified as a resident (they had to provide three documents proving such) for the purpose of renting out a homestay and the maximum numbers of bedrooms a resident could rent out was reduced from three to two and specified no more than a quarter of a home could be used as a homestay. Accessory units as homestays were still prohibited.
“We’re adding potential properties that would be eligible,” Development Services Director Shannon Tuch said and in the ways it loosened restrictions “these are going to have a dramatic impact on who can use this opportunity.”
In the course of ensuing discussion among Council about the details of the rules, Hunt raised the possibility of a larger rental company or landowner giving a tenant a discount to essentially manage a property mostly used to rent to tourists. He asked if the new rules made that possible.
City Attorney Robin Currin replied that “I don’t really think that’s within our province to get into the relationship of the owner of the property, who the long-term tenant is and what their compensation arrangement is. I think that goes beyond, really, what we should be looking at as a municipality as long as you’ve got someone who’s in there full-time.”
Bothwell asked if the people being fined for violating the city’s rules were being informed of the possibility of complying with the new homestay rules, Tuch replied that the city generally informed property owners receiving a fine of what their options were, and staff confirmed that they were putting off levying the fines until the rules changes were adopted.
In the extensive ensuing public hearing, many homestay proponents thought Council should still regulate with a lighter hand than was proposed.
“We believe that homesharing arrangements optimize the use of property, which is especially important where housing is limited,” Lisa Schumacher, who noted that she lives in a home with four roommates and two units rented out to visitors, an arrangement she claims makes the house more affordable.
Speaking on behalf of the Asheville Homesharing Network, a new group of homestay operators, Schumacher asserted that “we believe homesharing should be self-regulated” and that homestays helped “schoolteachers who afford a summer vacation by renting their home, musicians who tour all over the place but could never afford to own a home, yet in Asheville they have a place to come home to.”
Schumacher also asserted that it benefited travelers who couldn’t afford more expensive hotel prices rather than “the type of tourist who reads about us in the Wall Street Journal and gives Anthropologie their spending cash.”
While “we applaud” the effort to make homestays more widely affordable, Schumacher noted that the group wanted the rental of accessory units allowed as well and the elimination of the requirement that the resident stay overnight while the visitors were there. Also, she asserted that representatives of their homestay group should be the ones conducting inspections of other homestays, not city staff.
“Unfortunately this language falls short of what’s need to have reasonable homestay rules, the rules are still overly restrictive in parts and vague in others” Jackson Tiernay declared, asking that Council delay the vote until new Council members are on board, claiming that a “loud majority” were actually in favor of less restrictions on short-term rentals.
The inspections requirements, he continued, were too vague, and he instead suggested the city look to places like Austin, Texas and Portland, Ore. as its models for striking a balance of “government control and homeowner flexibility.”
But not so fast, said Stewart Alford.
“Austin, Texas right? The land of milk and honey and vacation rentals last week their City Council imposed a moratorium” on some short-term rental permits, he noted. “The problems facing Austin as a result of their rush to legalize and permit vacation rentals have been well-documented.”
“Other cities with large tourist populations have had to enact moratoriums to address similar problems,” he continued. “I’d urge Council to take a hard look at what’s happening around tourist cities like Asheville and wade very cautiously and deliberately into these murky waters.”
He felt that the amended ordinance was stronger, especially in its residency requirements, though he felt it should go farther and cap the number of homestays allowed per neighborhood or reinstate the requirement that the homestays be 500 feet apart.
“The discussion of homestays has notably divorced itself from the huge issues facing Asheville: housing availability and affordability,” Jane Mathews claimed. “Our city leaders can not in good conscience espouse a policy of promoting affordable housing while at the same time undermining the ability of existing housing stock to meet that need by turning it over to non-residents through the homestay ordinance.”
People renting out rooms or accessory apartments to long-term tenants rather than travelers, she claimed, was a major part of affordable housing in Asheville. When she moved to Asheville, it had allowed her to live in Asheville rent before eventually finding a place to own.
“It was modest housing by all means, but it allowed us over five years to save up toward a downpayment on our first home” and gave their landlady both income and help around the house. But now “our neighborhood faces becoming prey to those who see purchasing a house there as an investment for tourist accommodations rather than as a home for their family or as accommodations for someone that needs stable, long-term housing.”
If more homestays and short-term rentals were allowed, she warned “those who do not or can not own property will be left with fewer and fewer options.”
But Charlie Soterquist said that as an Asheville native and property owner, he preferred renting short-term rentals to having to deal with long-term tenants.
“I own properties all over the city of Asheville,” he said. “I think you’re trying to fix a problem that doesn’t exist. I have a long-term rental property that’s been un-rented because the last renters that were in there tore it all to pieces. I refuse to re-rent that piece of property because I couldn’t get them out of it. Short-term rentals solve that problem because you don’t have to worry about kicking them out, you don’t have to go to court to get them evicted.”
Rita Hayes said she agreed with the end of the 500 feet separation, as she was denied a homestay permit under the old rules only because her property was 425 feet from a bed and breakfast.
John Farquar claimed that “this process has been overtaken by events,” including the election and the lawsuit, and asserted that “this whole process should be put off for 13 more days until the new Council members take their places.” He continued that given that uncertainty, the city should freeze its enforcement of its short-term rental ban and the increased fines.
“This whole program is like trying to cut butter with a chainsaw,” Laurie Fisher said. “Is there really a homestay problem? I think not. There may be a parking problem, there may be an affordable housing problem, but these are not caused by homestayers. These are caused by many other bigger things in our economy, including a lot of hotels that take up a lot of real estate.”
Manheimer noted that she was now open to allowing accessory units as homestays as some of the speakers encouraged, but that would take a different ordinance change than the one on offer that night.
After the public hearing, Council members had their own wrangling to do.
Bothwell noted that he felt the homestay advocates had “a potent point” about the lack of issues they caused, given the limited number of complaints before the city stepped up its enforcement and expressed doubts that the impacts of homestays really posed that significant of a problem. Tuch replied in response that the “vast majority of complaints” were about whole homes being rented out as short-term rentals, not about homestays.
“What I’m leading to there is: how much as a Council do we want to regulate something that hasn’t been causing a problem?” Bothwell said.
“But what we’re trying to do is make it easier to comply with the homestay rules,” Council member Gwen Wisler said. “In general I feel like we’re loosening up the requirements. We’re trying to get people out of the dark and into the light.”
“Yes, but we’re dealing with a hundred or so people who didn’t know it was illegal,” Bothwell replied. “So we’re making it easier for them to do something they didn’t have to do before.”
At that, the homestay proponents in the room clapped.
“This is definitely an emerging phenomenon: two years ago I hadn’t even heard of Airbnb,” Manheimer said. She said she might come to looser regulations on short-term rentals, but wasn’t there yet and wanted to make permitting “as smooth as possible.”
“It’s funny that someone said something tonight about ‘don’t rush to judgment’ but I feel like we probably don’t have any issue we’ve vetted more than this one,” she later added. “It’s complicated and it does warrant some pretty close study.”
Smith said the issue was probably the most complicated one he’d ever had to address on Council.
“People justifiably want to have this use and people are justifiably concerned about this use,” he said. “Owners of property deserve this consideration and I think renters deserve this consideration.”
While he said “the old ordinance was too restrictive,” he also noted that “we’re saying we’re going to permit tourist businesses in our neighborhoods. That’s happening tonight. That’s a very, very big thing.”
He added that while he recognized that homestays did make housing more affordable for some, he also said cities that had taken the approach of allowing more short-term rentals were now regretting it and facing growing housing crises.
“This is basic supply and demand economics, folks,” he said. “If there’s less supply and there’s high demand, prices go up. This is not arguable.” He felt the new homestay rules struck a balance.
Hunt cautioned that he remained cautious of rules that would “allow de facto STRs.” Specifically he worried that a “creative investor can own multiple properties” and put operators in them, raking up to $30,000 annually if three bedrooms were rented out at a modest rate about two-thirds of the year.
“Taht same property might rent on a long-term basis for $1500-2000 a month, so the revenue levels are dramatically different,” he observed. “The people expressing interest are owners that want an edge for themselves in this economy.”
Hunt wanted to limit homestays to 100 nights a year and the separation requirement to remain in place. Otherwise, he warned, the door would be open too far.
But Bothwell replied that “the demand for this is not infinite. If everyone turned their house into a homestay, a lot of them would be empty a lot of the time.” If an investor bought up 10 houses, turned three of the four bedrooms into homestays while having the operator live there for a cheap rate, he said, “you’ve just created 10 units of affordable housing. Those 10 people are getting cheap rent for doing their job.”
In an extensive discussion about the minute specifics of the ordinance (the formal motion was the longest I’ve witnessed in a decade of covering Council), a majority agreed to limit the number of bedrooms that could be rented as a homestay to two, chuck the percentage limits and reduce the number of identifying documents required from three to two, allow the homestay operator to run another business out of the same location and kept the ban, in addition to the other changes city staff encouraged.
Council also agreed to reassess the effects of these changes in four, eight and 12 months at Smith’s suggestion as, he said, “we’re not going to get this perfect tonight.”
What they didn’t agree on were the changes themselves. As he didn’t receive the limits on homestays he desired, Hunt voted against the measure and it passed 6-1, with his dissent.
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