News: CJ Exclusives

Raleigh debate over short-term rentals continues

City still hasn't legalized Airbnb and other rental alternatives but enforcement has been confusing and haphazard

(File photo)
(File photo)

It began with an anonymous complaint.

It’s now a full-scale debate — about property rights, the free market, and, in fact, freedom of choice.

Short-term rentals — Airbnbs, for example — have been banned in Raleigh for years, though enforcement of that ban has been lax as the city debates ways to regulate the industry.

Airbnb, VRBO, and Home Away are all online platforms letting people rent out rooms or their entire home to guests. These platforms are an increasingly popular alternative to hotels, largely because of their affordability and unique personal touch. As their popularity grows, cities have taken an interest and have stepped in to regulate the industry.

Charlotte, for instance, has a provision in its city code requiring residents to register their rental property. In Asheville, short-term rentals are prohibited in residential districts but allowed in some non-residential areas. Raleigh city officials are working with owners of short-term rental properties to legalize the practice while also addressing concerns, such as how the additional renters would affect traffic flow and a constant turnover of people living in a neighborhood.

The anonymous complaint, against Raleigh resident and tech entrepreneur Gregg Stebben, sparked the debate over whether short-term rentals have a place in the city.

The city’s Economic Development and Innovation Committee in the coming months is set to consider a proposed ordinance, yet the debate lingers and the issue remains unsolved.

The complaint against Stebben came in 2014.

“When you list something on Airbnb — at least at that time — you would get a little pop-up thing that said check with your local authorities to make sure this is OK,” Stebben explained. “I did that.”

Stebben called the City Planning Department. Officials told him it was unclear whether short-term rentals were legal but to place his listing on Airbnb anyway. If someone filed a complaint, the city would then get involved.

Someone complained.

“Ironically, I was the first one in Raleigh to get cited,” Stebben said. “The city could no longer be cavalier about, ‘We don’t know if it’s illegal or not.’ Now they had to respond to the complaint, and they came to the conclusion that given how the zoning laws are currently written, it’s not legal.”

What followed were years of town hall meetings, City Council hearings, committee discussions, and several votes without an ordinance.

Travis Crane, assistant director of planning and zoning, said the process takes time.

“I think that the length of time that we are seeing in relation to short-term rentals is a reflection of the different community values that are being discussed here,” Crane said. “There are certainly different viewpoints on the use and related to the use. Those viewpoints are all being expressed in public forum.”

In January, the City Council tried a new way to address the issue.

The council appointed a task force, composed of 16 members — including Stebben — who concluded a review in May and offered its recommendations.

The task force recommended three categories for short-term rentals: Type I, Type II, and Type III.

Type I properties require a resident manager to live on the property at least 181 calendar days each year. The owner also must be present on the property throughout the rental period. Type I properties can have no more than five bedrooms. Type II properties have the same requirements as Type I, and allow the rental property to include a detached accessory, such as a standalone garage. Type III properties don’t require a resident manager.

Short-term rentals would require that a zoning permit be renewed annually. The resident manager also must meet other standards, such as providing proof of insurance, maintaining a guest registry, prohibiting exterior advertising, and including a minimum amount of floor space per bedroom.

The regulations would allow owners renting Type III properties before the ordinance to ask the city for a grandfather clause.

But the City Council has yet to even vote on the ordinance.

Rather, it forwarded them to the Economic Development and Innovation Committee, led by the city mayor Nancy McFarlane. It’s unclear when the committee will meet to discuss the proposed rules.

“There’s a lot of little concerns, but the biggest is still the whole-house rentals in residential areas with no owner or manager,” Councilman Dickie Thompson told The News & Observer.

Stebben is frustrated by yet another delay.

“How many man hours has the city staff spent on this?” Stebben asked. “It’s not just that the city has spent 2 ½ years on this, the city staff has spent a ton of time on this.”

Chris Browder shares Stebben’s sentiments. Browder began renting his Brentwood home in August of last year.

“I really hope they pass whole house rental,” Browder said. “At the end of the day, let us go get a permit and get back to working so we don’t have to worry about it.”

Crane cited the constant stream of new renters as a primary issue in the debate.

“In a normal neighborhood context you might know your neighbors, you might recognize them and you see them time and time again,” Crane said. “It’s just that there is always a different set of people that are being introduced in the neighborhood, and there are people who find that objectionable.”

According to Stebben, the task force tried to address that concern, but city attorneys rejected its plan.

“In the city of Raleigh, there are several things where neighbors can make a determination for their neighborhood. For instance, if you think the speed limit on your street is too high, you can petition your neighbors to lower the speed limit,” Stebben said. “We used that as a model so that any neighborhood that wanted short-term rentals could have them, and any neighborhood that didn’t want them could make sure that didn’t happen.

“A lot of people in Raleigh like short-term rentals,” Stebben said, pointing out that all the town hall meetings and public hearings show a majority favoring the practice. “By my count it’s 1,580 positive responses and 17 negative.”

“Banning whole-house rentals won’t make them go away. Instead, we’ll miss out on tax revenue and tourism opportunities,” Baldwin told  The News & Observer last year. “We’re basically curbing entrepreneurship and creativity, and that’s not what I want Raleigh to be known for.”