NC bill would prevent cities from prohibiting short-term rentals

Cities wouldn’t be allowed to outright ban short-term rentals, like Airbnb or VRBO homes, but it would allow some regulations including permitting.
Cities wouldn’t be allowed to outright ban short-term rentals, like Airbnb or VRBO homes, but it would allow some regulations including permitting.
Published: Apr. 10, 2023 at 4:47 PM EDT
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CHARLOTTE, N.C. (WBTV) - As the popularity of short-term rentals increases more cities across North Carolina are looking at ways to regulate the booming business.

It’s a point of contention between private property rights, and regulating what some call businesses in their backyards.

In Charlotte regulating short-term rentals, like Airbnb or VRBO properties, has caused tensions between neighbors and some have called for more regulations on the rentals.

From late-night parties to safety concerns these issues have presented challenges to cities across the state, but local governments don’t have guidance from the state that gives clarity as to what they are allowed to do.

Related: Some Charlotte residents say they want to see more regulations for Airbnb rentals

Now, a new bill introduced in the North Carolina State Senate would make it clear --- cities won’t be able to prohibit homeowners from renting them out --- but there are some requirements cities could require.

The bill titled, Regulation of Short-Term Rentals, outlines what cities can, and can’t do when it comes to deciding who can rent their home and for how long.

At first glance, it appears that the bill would allow all rentals by prohibiting cities from creating ordinances that stop homeowners from using residential properties as short-term rentals. But there are some rules and ordinances that cities can enact like requiring a permit and zoning restrictions.

It’s a divisive subject and has prompted several lawsuits, one of which made it to the State Court of Appeals after the City of Wilmington told a family they were not able to rent their home anymore.

The court ruled against the City of Wilmington’s ordinance saying it violated state law already in place that prohibits cities from requiring permits to rent a property.

Attorneys for the city called the law ambiguous and said the restrictions were legal because they were in the city’s zoning ordinances.

Since that ruling, other cities across the state have questioned the legality of their own ordinances and many have discussed waiting on the North Carolina General Assembly to create a law that explicitly states what is, and what is not allowed.

“A way to potentially address the problem would be a mandate where you’d have to have a certain duration like two months or so,” John Craver, who rents an apartment in the Savoy Uptown, told WBTV.

Craver said the corporate rentals at his complex need to be regulated to be longer term, but under this bill they would not.

“As long as we continue to protect special interests, we will continue to see housing prices soar in the city and in the state of North Carolina,” Craver said.

Not Permitted

The first part of the bill states what would not be allowed which includes:

“No city may adopt or enforce an ordinance, rule, or regulation that does any of the following:

(1) Prohibits the use of residential property as a short-term rental.

(2) Prohibits the use of accessory dwelling units as short-term rentals.

(3) Limits the number of nights a property can be rented as a short-term rental.

(4) Requires the owner of the short-term rental to occupy the property for any 2 period of time during a rental to an occupant.

(5) Classifies short-term rentals as a commercial use.

(6) Limits the operation of a short-term rental marketplace.”


The list of actions a city may take are also included and include:

(1) Requiring a lodging operator to obtain a permit to operate a short-term rental within the city’s corporate limits. The city may revoke the permit if the short-term rental incurs five health and safety violations within a 12-month rolling period; provided, however, the city shall, prior to revoking the permit, give the lodging operator an opportunity to contest the alleged violations and, if found to exist, an opportunity to remedy the violations. The city may charge a one-time fee of not more than twenty-five dollars ($25.00) for each permit issued and may charge an additional fee of not more than twenty-five dollars 15 ($25.00) to reinstate a permit that has expired or been revoked.

(2) As part of the permitting process authorized under subdivision (1) of this subsection, limiting the number of occupants allowed to stay in a short-term rental. The city may consider State and local building code standards and septic tank capacity in determining the number of occupants under this subdivision.

(3) As part of the permitting process authorized under subdivision (1) of this subsection, restricting the number of occupant vehicles to one vehicle per bedroom.

(4) Restricting the location of short-term rentals to areas of the city that have been zoned for residential use, and requiring that the property remains in compliance with all applicable residential zoning requirements.

(5) Requiring that short-term rentals comply with all applicable city ordinances and codes, including building codes and housing codes.

(6) Requiring that all contracts for short-term rentals include a copy of any city ordinances that regulate noise, waste removal, and parking or, in the alternative, that the lodging operator provides to the occupants a written 32 summary of city ordinances that regulate noise, waste removal, and parking.

(7) Prohibiting the use of short-term rentals for any purpose other than that which is allowed in hotels, motels, and inns without the property owner’s prior approval, which shall be evidenced by a written agreement between the lodging operator and the occupant.

(8) Requiring a lodging operator or authorized agent of a lodging operator be within a 50-mile radius of a short-term rental during the time that an occupant is staying in a short-term rental.

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