Is enforcement of the city’s short-term rental ordinance treating citizens like criminals?

by Bill Davis | News Editor

Charleston’s new short-term housing rental ordinance is going to be retooled, but not before some people who own houses in West Ashley take big hits.

Last month, retired widow Shelley McMurry was in court on the peninsula, getting hit with a cash fine after being threatened with as many as 30 days in jail.

Her crime was renting out a home on Magnolia Road she co-owns with her daughter through, and similar short-term rental companies. She admits having been told earlier to cease and desist, and when she asked a city official what about the travelers coming that night she was told to send them away.

McMurry was upset about the way she was treated throughout the process. A simple cease and desist letter would have sufficed. Instead she had to make a court appearance and was even nervous that she or her daughter could end up behind bars for doing something that is done in nearly every other city in the country and around the world.

But McMurry and her daughter promptly cooperated and shut it down immediately, and as a result faced no jail time. But now, they will likely have to sell the house they paid hundreds of thousands of dollars for last year, possibly at a loss.

With hotel after hotel continued to be approved and built in Charleston, it has some wondering where the city’s interests lie. The Hotel Bennett, which is billing itself as “the South’s Grandest New Luxury Hotel” is set to open any day. Located on King Street, at Marion Square, the hotel boasts 179 rooms that begin at nearly $500 per night with suites that are more than $2,500 per night.

Meanwhile, the city’s short-term ordinance went “live” last month, and is forcing families like McMurry’s to eat the expenses of having rehabbed homes and outfitted them with more attractive furnishings.

A harsh turnaround for what was supposed to supply McMurry with some spending money and help cover the cost of cars, insurance, and colleges for her teenaged grandkids.

While she fell in line immediately, and while she sees both sides – protecting neighborhoods from rental party houses – McMurry had almost nothing but positive experiences renting out the Avondale-area home.

In fact, an inveterate world traveler, she and her late husband had fallen in love with short-term rentals on trips with friends to Europe and beyond. “Some people are house people, while others are hotel people,” she says.

But, she says there is something innately “elitist” about blocking investors from renting homes for short terms, as they tend to be cheaper than hotels and similar accommodations in a city with overnight rates higher than the national average.

“It’s just a shame the city is going to limit the people who come here to only people who can afford expensive hotels,” says McMurry.

Jacob Lindsey, the city’s head of zoning and planning, disagrees. He says that the recently enacted ordinance, which tries to recognize the differences between overnight markets on the peninsula and in the “suburbs,” also allows owner-occupied homes in West Ashley to continue to delve into the short-term market.

Lindsey openly admits that he has used short-term rentals in his personal travels. But he says, those travels further enforce that Charleston is “different” from any place else in the world due to its small size and massive number of visitors who come here every year.

Lindsey also openly admits that the ordinance was intended to be “tweaked” to better serve the city as a whole. But he says the core issue that McMurry fell afoul of, a de facto zoning change of a property from a residential use to a commercial use, will not fall out of the city’s crosshairs.

City Councilman Keith Waring, who represents a large chunk of West Ashley, wants to know why those “tweaks” haven’t been made in the six months since City Council first voted on the ordinance. And at council’s last meeting in October, he voted to revisit the ordinance after city staffers asked for nine more months to further assess the ordinance.

Ironically, Waring finds problems with a portion of the ordinance that governs peninsular homes being rented out on a short-term basis, as the initial push for the ordinance originated downtown.

That issue, specifically, would govern which homes are allowed to be rented on a short-term basis downtown depending on whether or not they were listed on a national registry of historic properties.

Waring does not like the idea an out-of-town organization — over which the city has no control — playing such a potentially large, and unregulated, role in the ordinance’s application.

Waring alleges that city staff, namely Lindsey, had been given ample time to study and tweak the ordinance, and wonders if political pressure had played a part in the slow-footing.

Waring holds that part of the reason he and other councilmen voted in favor of the ordinance back in March was the understanding that city staffers would address a short laundry list of issues. But, Waring now says, only a third of those issues have been looked at.

Lindsey denies there was any political motivation in the time it has taken to study and tweak the ordinance. “The truth of the matter, from our standpoint, as often the case, is that we have to look at every angle, from planning to legal to other factors and that can take some time,” he says.

Commercial realtor Aubry Alexander, who used to represent a different chunk of West Ashley on council, thinks there is way too much focus on potential negative secondary impacts of short-term rentals on this side of the Ashley River.

Alexander points out that many of those who invested in homes for short-term rentals have helped bolster the real estate market, increased home values in some neighborhoods, and improved the local economy by hiring contractors and craftsman to spruce up the homes.

West Ashley is a significantly different beast than the peninsula, in Alexander’s eyes, and is more likely to welcome professionals for short stays than revelry-seekers headed downtown. He thinks the city is evolving and that, like Uber, AirBnB ventures will become more the norm in the very near future, despite City Hall’s reluctance to keep pace.

Realtor Charlie Smith, a former long-term member of the county’s planning commission and West Ashley resident, disagrees.

“I personally had big troubles within my business trying to show a property that was for sale that was being rented out on AirBnB,” says Smith. “It was impossible to show it, and very problematic.”

Smith says the key is to protect the property rights of the other people in a neighborhood who purchased their homes when there wasn’t a de facto hotel in their midst. As such, he was “disappointed” by council’s vote to reopen the issue of the ordinance so soon.

Lindsey also acknowledges that as the city gets closer to the ordinance final iteration, it could cause problems for families involved in the market who may not have the deepest pockets.

Lindsey reminds that owner-occupied homes in West Ashley that are not part of a subdivision with restrictive covenants or home owners association, can still rent out rooms. This, he says, is a nod to people running boarding houses in the past.

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