Tensions escalate over short-term rentals and the city budget as Council decides exactly how far it will go — for now
Above: Mayor Esther Manheimer, who cast the deciding vote against allowing Airbnb-style rentals in the city’s garage and basement apartments
Rowdy is not usually a word used to describe Asheville City Council meetings, but with tensions high over short-term rentals and city spending, the May 17 meeting was certainly an exception.
The meeting would feature two key issues: the public hearing on the annual budget and a controversial measure to extend the type of units allowed for rent to tourists and visitors on sites like Airbnb. Both would see emotions run high, though for very different reasons.
The latter would also show that while the dynamics of the short-term rental fight have changed — and aren’t going anywhere anytime soon — some of the basic vote-counting on Council hadn’t. Despite plenty of upheavals since the last election, the members of Council that were skeptical about extending short-term rentals remained skeptical, and voted accordingly.
Counting copper
The $161 million budget brought out many local activists and one very angry developer, and, though contextually it was the warm-up for the fight over the use of accessory dwelling units for short-term rentals, the scene definitely showed the divisions in the community over how the city spends its cash.
This year, the budget doesn’t include a property tax increase, something both 2015 and 2013 did, as city leaders asserted those were necessary to offset cuts from the state. However, it does include some notable fee hikes, increased spending on transit (for more buses in South Asheville and later service on some routes), a study on how well the city does (or doesn’t) carry out racial equity and stepped-up policing.
That last one was the most contested part at the public hearing, specifically the creation of a crime analyst position. Police are pushing for a crime analyst and, in the coming years, stepped-up policing in downtown, South Slope and the River Arts District, claiming the tourism boom has led to an increase in crime, including violent crime.
But some local activists pushed back, asserting that under the current model, more policing would just mean more problems for many marginalized populations within the city.
Bella Jackson, a local public housing resident and activist, spoke out against the creation and funding of the crime analyst position, noting that more cops in poor, minority neighborhoods is not a solution to racial inequality.
“You guys either have to believe that people of color are more prone to violence and crime, or you believe that there’s something wrong with the systems that we enact in our community,” Jackson told Council. “That system that criminalizes blackness, or that black people are just more prone to break laws. I’m assuming no one is going to stand up there and say that to me.
:So if we’re going with the argument that the way in which we treat our minority communities creates crime, then let’s not keep funding things that don’t work, things that keep putting our black and brown children behind prison bars at a rate that far surpasses the white children, right across the bridge in Monford.”
Amy Cantrell, director of BeLoved House, also spoke on this, pushing for more money in housing and transportation instead of the crime analyst position.
“We need to look at the ways we invest, and where we invest,” she said. “My spiritual tradition says this: where the treasure is, there your heart will be also. We know that when we put treasure into transit, then the heart of the people increases. People are able to access basic necessities, people are able to access jobs.”
Desaray Smith, a social worker and activist who works in the mental health field, also added her voice in opposition to the new crime analyst position, saying that the money is better used elsewhere.
“By conservative estimate, I believe I have met with more than 3,000 people in Western North Carolina who are having trouble with suicidal or homicidal thoughts, who are experiencing various symptoms of psychosis, who are withdrawing from drugs or alcohol, and who are doing those things in the context of poverty,” she began, going on to explain that the money used for a crime analyst would be better used to address these immediate crises within our community.
Following that, local developer Chris Peterson was thrown out during his address. He was speaking on the proposed changes–and finances behind them–to the land near the river, part of a redevelopment involving the city and federal government and tarring local government spending habits a “Ponzi scheme.”
“Unlike some of you up there that don’t believe in a democracy,” Peterson said. “But I’m going to tell you that the tax payers are all going to wake up in about three years. Y’all have been very clever, but guess what. You know, let’s talk about your transit. And I do believe poor people have a right to be on transit. But you have a $4 million dollar hole in that budget, it has been mismanaged.”
Finally, after refusing to address all of Council and ignoring Mayor Esther Manheimer’s request that he do such, the mayor whipped out her gavel, slamming it down. The cop even got out of his chair to begin the process of forcibly escorting Peterson from the chambers, before the conservative former vice mayor left of his own volition.
(The gavel usage was a special moment; according to Blade editor David Forbes, as they have not seen Manheimer bang the authoritative noise maker to dismiss a speaker in the duration of her tenure.)
Rental rumble
With that, it was time for the main event: bare-knuckle Airbnb brawling, or technically, public comment over the proposed changes to short-term rental restrictions.
From the agenda, the public hearing was “to consider an amendment to the Unified Development Ordinance to expand the options for a homestay operation by allowing the use of an Accessory Dwelling Unit for guest accommodations when the property owner or resident manager resides on the same property and clarification of the current residency requirements.”
The issue has remained massively controversial throughout the last two years, as the practice has increased alongside the city’s worsening housing crisis and increased debate over the impact of the tourism boom on locals. Last year, Council embraced a two-pronged approach. They strengthened the city’s existing ban on STRs in residential neighborhoods with stepped-up fines and enforcement, while relaxing rules on “homestays” to allow locals to rent out parts of the homes they live in to tourists and visitors.
But serious questions have remained about how effective the enforcement is, and accessory dwelling units remained stuck somewhat in the middle. Proponents of allowing them to be rented out on Airbnb and similar sites said they weren’t that different from existing homestays and would allow some local residents to make much-needed cash off the tourism industry. Opponents pointed out that as many ADUs are self-contained, they can be (and are) rented out to locals. Putting them in the STR market, they fear, would bring tourists directly into residential areas and result in either taking away much-needed housing units or evicting locals already in those units due to the much-greater profits STRs could generate.
Both Council’s Housing and Community Development Committee and the city’s Planning and Zoning Commission found the latter argument more convincing. The first voted unanimously against the extension, the latter opposed it 5-2 following a heated debate.
The weeks before the meeting also saw extensive public debate about exactly what existing studies and information show about the impact of STRs in Asheville. They’re a rapidly changing market that’s hard to measure, on that most of the people and groups that have tried agree but beyond that, they come to some very different conclusions.
The day before the Council vote, the website Inside Airbnb, which skims the company’s site itself for information on how many and what types of rentals are offered in an area, released info for Asheville. It found 864 rentals in the city and the surrounding area, of which 61 percent were for whole homes/apartments and 40 percent were by users offering multiple listings, meaning one person or company renting out multiple rooms and apartments.
The information was far from perfect: some locations were listed twice, some might have been taken off the market months ago, some were outside city limits and the locations were often not very precise. But it does offer a glimpse at the broad extent of a very hard-to-track practice. Opponents in particular claimed the information revealed that Airbnb users were, often in violation of city law, renting out hundreds of units, including no shortage of whole houses and apartments, to tourists instead of locals during the middle of the housing crisis.
Proponents preferred to point to the Bowen Report, commissioned by the city and released early last year, it assessed overall housing needs in Asheville and the surrounding area. While it found a dire housing crisis, it also used STRs as a case study and, based on a survey, concluded that it probably wasn’t being done on a wide scale and were not a major factor in the housing shortage.
However, the report also noted multiple parts of the issue, including that there was a major profit incentive for property owners to convert rental housing to short-term rentals because they could make roughly four times as much money and concluded “conversions of housing to vacation rentals reduces the supply available to long-term residents, thereby exacerbating the challenges households have in finding housing they want and can afford.”
Another report, also commissioned by the city, came from Mai Nguyen, a planning professor at UNC Chapel Hill. Nguyen reviewed a range of studies and policies on short-term rentals, laying out a number of options for regulation. While she noted that STRs could have some positive impacts for local property owners seeking additional revenue and helping them renovate housing, noting that “the ability to rent a room in their home can help with mortgage payments and keep them in their homes.”
But Nguyen also noted that other studies and data pointed to negative impacts, especially on housing shortages and costs for local renters, and that the market remained difficult to assess, concluding that some of the studies indicated “STRs can exacerbate housing supply shortages and increase housing prices when there are other pressures on the housing market including increases in jobs and population, but the independent impact of STRs is difficult to isolate.”
During the hearing, there were many in the house wearing green “ADU” stickers in support of the relaxed restrictions. However, notably there were more people speaking against the proposed changes than in support of them, a rarity in a town where the pro-Airbnb crowd is known to pack the house on days like this.
Opening up the comments was a local man named Mike, who called out a potential conflict-of-interest in councilman Brian Haynes. Mike’s understanding was that Haynes’ son was considering a ADU rental; however, Haynes clarified that his son was considering an already-legal homestay, not an ADU.
Following this, a flurry of opposition followed in short succession. Local business owner Casey Campfield spoke against the proposal on the basis of the already critical housing shortage in Asheville.
“There’s a huge housing crisis in our city,” he said. “Not enough units are available, and the units that are available are among the most expensive in the entire state. Thousands of hardworking people who make this city run can no longer afford to live here. So how, at a time like this, can we even be discussing providing more lodging for tourists when our own citizens can’t find homes.”
Various neighborhood groups also opposed the change. Lisa Thompson, speaking on behalf of Haw Creek, and Barber Melton of the Coalition of Asheville Neighborhoods echoed this sentiment, citing the housing crisis and the needs of Ashevillians. “Let’s not help the tourists,” as Melton put it, adding that the move would undermine the city’s efforts to solve the housing crisis.
“I also sit on the affordable housing committee and we have a group of dedicated volunteers who’ve spent four years so far trying to come up with solutions for affordable housing, and folks, you’re fixing to stab us in the back.”
Others opposed to ADUs and STRs do so on the basis of an unwanted mix of commercial endeavors in their residential neighborhoods.
“I’d like to speak violently in opposition to this proposal,” Chuck Freeman said. “Why? I bought a house in Asheville in a very nice neighborhood, which incidentally across the street from your [Manheimer’s] mother. It’s a very nice neighborhood. I bought it in the assurance of the zoning that made it a residential area that would protect my property values.”
However, many in favor of the changes to ADUs cite their need for the additional income provided by such STRs as a means for them to stay in Asheville.
One of those was Mike Devange, who said he operated a legal homestay.
“I’m a public school teacher, and two years ago I started t o face a dilemma of being able to afford to remain in Asheville and remain a teacher in this community which matters greatly to me,” he told Council. “I’ve been a teacher for 23 years, and 14 of those have been in the Asheville area. I have a home that I decided to divide and offer to guests as a way to keep my son and myself here and this has worked brilliantly. This has actually kept me here in a job that I care about and has enabled my son to have stability.”
Brandee Boggs, who has a homestay, also spoke in defense of ADUs, claiming a sense of persecution felt by those who engage in Airbnb-type rentals.
“All of the studies show we’re not the ones to blame for the housing dilemma,” she asserted.
Specifically, she claimed both the Bowen and Nguyen reports backed this up, though both documents noted problems and issues with short-term rentals as well in their assessments of their impacts.
Public comment on the matter continued for several hours, with Manheimer noting wryly that council is “conditioned to listen to [public comment] for hours” while flexing. Many citizens from both sides of the issue spoke passionately in defense of their views, painting a portrait of just how complicated and fraught an issue STRs are in the context of the current housing crisis.
Following public comment, Council member Gordon Smith, one of the main opponents of expanding STRs, spoke first. “We know that 50 percent of Ashevillians are renters,” he said, adding that we are the 6th most unsustainable housing market in the nation and in the midst of a severe housing crisis. He also cited his personal experiences as a renter, and how it made it possible for he and his then-fiancee to buy their first home.
“I’ve been an ADU resident. I’ve seen what it does. I see what it’s done in my life.”
Smith also mentioned that not only are there a lot of feelings about ADU and STR usage, but that there are many, many ways to resolve the issue, as other cities around the world have demonstrated. He then advocated a “patient and prudent” response, asserting that allowing STRs in ADUs would be a step too far while the city tried to work out a complicated topic.
Council member Cecil Bothwell responded, pointing out the difficulties in any attempt to regulate something that fits easily into the realm of black market illegalities.
“My bottom line on this issue has been from the beginning that black markets are impossible to regulate,” he said. “The reason we don’t know how many short-term rentals there are in the city is because outside of the ones that are legal in the urban center, or the commercial areas, is they’re not legal. So of course we don’t know how many there are.”
Council member Keith Young then pointed out that many of Asheville’s lower-income people are not at these meetings, as they are struggling and cannot make the time, calling the current fracas “a battle of wills between middle class and upper class neighbors.”
“If our focus is going to be affordable housing, that’s a totally different argument.”
To solve this conundrum, a task force was proposed, something both STR opponents and proponents had advocated for, though they differed about what Council should do in the meantime.
Council member Julie Mayfield approved of this approach while wanting to hold off on allowing ADUs as short-term rentals.
“I agree with Gordon, this is a complex issue, with well-intentioned, thoughtful people on both sides, who I like and respect and I appreciate the respectful way in which we’ve been able to have these conversations, it’s been really helpful. I do also think that even though we’ve been talking about STRs for years, this particular nut, this ADU nut, is relatively new, at least to me. And I think it is the hardest nut to crack. And I think we have to figure out where we were on the easier stuff, on the whole houses and on the homestays, and this is the thing in the middle.
“I do think we need to take time to get it right.”
Council member Brian Haynes, however, spoke briefly in support of ADUs. “There are people that need these rentals to survive in this town and those are the people I’m concerned with here tonight.”
Vice Mayor Gwen Wisler also advocated the “wait-and-see” approach. “The issue, I think for me with ADUs is it is a whole different thing, and I do think it will require regulations and limitations that by just taking the lid off and saying ‘okay ADUs can be homestays’ doesn’t address some of the uniquenesses of ADUs.”
Manheimer was the swing vote on the issue. Wisler, Smith and Mayfield had all voted against the ADU expansion on Council’s housing committee while Bothwell, Haynes and Young had all indicated their support of the move. But following last year’s election, Manheimer — previously opposed to the expansion of STRs — indicated she was open to the idea. During this debate, she said she remained torn about the topic.
“I continue to have concerns about the integrity of the neighborhood,” she began. “Asheville is a wonderful place, and my family lived in Norwood park when I was younger and that’s the kind of place where your neighbor is very close to you and it’s a close knit community, but it’s also a great place for a possible homestay.
“I continue to have that concern, but I do worry about folk who are essentially being priced out of the home that they may have purchased ten years ago, 15 years ago, and they’re struggling be able to stay in our community.”
In the end, she couldn’t side with an expansion yet. The motion against ADUs as homestays passed 4-3, with Bothwell, Haynes, and Young opposed.
Future work will focus on developing a task force to examine the short-term rental market and its effects on the Asheville housing market as council searches for a compromise in this complicated issue. The motion to create the task force passed unanimously.
This approach is, it should be noted, not atypical for Council. After controversy over the fate of property across from the Basilica of St. Lawrence exploded last year, the elected officials agreed to appoint a committee to study the matter. They appointed the first members at this same meeting, as it became clear that the fight over STRs is headed for the task force route.
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Leigh Cowart is a freelance journalist and writer covering science, sports, and sex. Her work has appeared in The Independent, Hazlitt, Vice, The Daily Beast, Buzzfeed News, the Verge, SB Nation and Deadspin, among others. She resides in Asheville.
Blade Editor David Forbes also contributed to this report.
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