Tech-Enabled Tourism fighting a continued legal battle in North Carolina

     Websites likeAirbnb, VRBO, and HomeAway have quickly become household names, known for theirshort-term rentals that are easily reserved on their websites and mobileapplications. These popular sites are an online marketplace that allow hosts toearn an income from their properties, whether that might be an empty house,apartment, room, or shared space. The websites are an intermediary that connect hosts totravelers that are looking to stay in the area and have expanded the marketfor travel accommodations to cities small and large, from New York City toBanner Elk, North Carolina.

     Guests enjoy theease of booking on their websites and many individuals prefer to stay at theseshort-term rentals because they can be less expensive for more space andprovide a unique experience by staying in a home rather than a hotel. As thesesites have grown, short-term rentals have boosted the economy in cities byproviding more lodging, promoting tourism, and giving local homeownersadditional income. However, local governmentshave become concerned about the negative impact of these short-term rentals onthe local communities. A large number of rentals in a city may contribute tohousing shortages and lessens the possibilities for individuals to make an areatheir permanent home. Current residents are also concerned about introducingshort-term rental properties and tourism into residentialneighborhoods. Among these concerns are worries about increased numbers ofcars on the street, loud neighbors, and safety risks.

     Several cities,including Chicago, New York, and San Francisco, have passed legislation aimedat regulatingshort-term rentals. In attempts to control these companies, cities have taxedthem, limited the number of days places can be rented, limited the rentals tocertain zoning areas, and have even bannedshort-term rentals in their communities. Despite numerous regulations, localauthorities have had difficulties enforcing the laws because of the high volumeof rentals, hosts, and different websites. Authorities are needing to turn todata searching tech toolsin order to find and monitor illegal rentals.

      Larger citieshave had ongoing legal battles with short-term rental companies and some, suchas San Francisco, have developed a cooperativepartnership with websites like Airbnb. Other cities have spent years working onregulatory legislation and are still struggling to create and enforce laws withthe desired effect. New York Citycreated some of the strictest legislation, banning short-term rentals unlessthe host is present, but thousands of illegal rentals continue to proliferatein the area.

     North Carolinacities have also seen an increase in the number of short-term rentals over thepast few years. Travelers are drawn to the state’s coasts for beautifulbeaches, like Wrightsville, mountains for hiking, like Asheville, and citiesfor work, like Charlotte. In Wilmington, North Carolina, local authorities havespent years holding public meetings and debating legislation to regulate theshort-term rental economy. When these companies originally began to host in Wilmington,the city’s land development code did not apply to these types of rentals. InJanuary, whole-house rentals were approved to be in residential districts, butnot without limitations.These whole-house rentals may not allow events, must be 400 feet from anotherrental, and must register with the city annually for a cost of $300, along withseveral other requirements.

     In addition to Wilmington,some North Carolina cities have passed legislation regulating short-termrentals, while others have left it to zoning ordinancesalready in place. In Raleigh, North Carolina, authorities have agreed to allowshort-term rentals, but not of entire homes. The new legislation requires hoststo notifyneighbors, purchase a rental permit, limit guests to two adults, and doesnot allow for events to be held at rentals. Hosts that are in violation ofthese regulations risk being fined $500 a day.

     Although Raleighbegan to finalize the newlegislation in May, “Governor Cooper signed into law Senate Bill 483, a one-page clarification to the VacationRental Act” in July, which may preempt the new legislation. The new senate billprohibits local governments from requiring hosts to obtain a permit to renttheir property, which is one of the requirements of the new rental legislation.The developments of these legislations are quickly changing and the interactionof the two will be addressed in the coming months.

     The popularity of short-term rentals has continued to grow despite the increasing legal battles between the companies and the cities they conduct business in. As more rentals continue to pop-up, more regulations do as well, and the legal issues will continue to abound. The legal community, as well as homeowners and rental hosts, should keep a close watch on cities like Raleigh that not only have legislation pending, but also have conflicts with current state rental and zoning regulations. The results of new rental legislation passed will have a broad impact that will reach not only local authorities but also short-term rental companies, homeowners, rental hosts, and travelers.

Chloe Altieri

September 11, 2019