Dozens of property owners are being sued by a coalition of business interests called Global Real Property Trust, to put a halt to the practice of short term rentals. These short term rentals are described as a stay of less than 30 days and you will find them on sites such as Airbnb and Craigslist. The popularity of these rentals have set off a debate pitting the rights of private property owners against local government efforts to regulate these hotel alternatives. Many home owners, especially in the peninsula of Charleston, see the huge benefit in using part of their homes or their entire home as a source of income.
So who exactly is the responsible for the enforcement of the ordinance that bans these short term rentals? It has fallen to the Dept. of Planning, Preservation and Sustainability, where they search listing sites for evidence and follow up tips they receive from the community and online reviews. When they find a homeowner who is in violation of the ordinance, they are tried in Livability Court where they can face fines in the $1000 range or 30 days in jail if found guilty! The jail term can in most cases be lifted if the guilty home owner pays the city the equivalent of a 2% hospitality tax on all of the rental revenue. Airbnb hosts are required to pay federal taxes but in places where short term rentals are illegal, they do not pay state, county or municipal taxes, which can add up to about 14% in Charleston.
So, is this deterring residents of Charleston who are rental hosts? According to Charleston City Paper, many rental hosts who are fined and pay the fine, continue to operate their rentals. I guess they play the odds of getting caught and don’t mind paying the fines.
There is one area in Charleston where short term rentals are legal. That is the Cannonborough-Elliotborough neighborhood. Under a 2012 ordinance , the owners of houses in this neighborhood with certain types of commercial zoning can apply for a business license to offer short term rentals. Home owners are prohibited from putting a sign in the front of the house and they must keep the rental part of their property physically separate from the residential section. This has actually had a positive effect on the neighborhood. Many homeowners have spent money renovating and improving their properties to become a short term rental host. But opposition runs strong in many areas on the peninsula of Charleston. They say that many of these short term rentals attract young people who rent them out for bachelor parties or Spring Break. They say the noise, garbage and traffics is unacceptable.
Many residents on the peninsula are not aware of the ordinance and laws regarding rentals of less than 30 days. One resident in particular was fined in June 2014. They of course paid the citation but was surprised because they never received a warning which would have educated them on the laws regarding being a rental host. That resident was John Tecklenberg’s wife who at the time was just a candidate for Mayor. This just goes to show you how little is known of this city ordinance.
Maybe with time, this ordinance will be changed or overturned but in the meantime, it does create some debate among the residents of Charleston.
