CAROLINA BEACH — Like falling dominos, there is a chain reaction happening not only locally, but across the country as more and more cities and towns begin the conversation (or actually make new laws) on regulation short-term rentals.
As the Town of Carolina Beach continues the process of creating its Coastal Area Management Act (CAMA) Land Use Plan (LUP), short-term rentals have become a matter of contention and concern for those involved in the process.
The Land Use Plan
So what exactly is a LUP — and what is the point of creating one? According to Interim Town Manager Ed Parvin, the plan will serve as a 5-year guide for development.
The plan is being created with plenty of community input along with an ad hoc committee — the Land Use Plan Committee, which is made up of various members of the community.
“The fundamental focus of all planning and land use and development regulation is to protect the health, safety, and welfare of the community. A Land Use Plan sets out a road map to guide the regulation of development and public investment of resources. It also communicates a cohesive community direction and provides a framework for making land-use decisions,” according to the LUP update’s website.
Not only does the LUP allow the town to guide development since it is a coastal community in North Carolina, CAMA guidelines actually require it. The last plan was approved in 2007.
“The Coastal Area Management Act (CAMA) requires each jurisdiction in the 20 coastal counties to have a local land use plan in accordance with guidelines established by the Coastal Resources Commission (CRC). The current Town of Carolina Beach CAMA Core Land Use Plan was adopted in 2007. This project will focus on reevaluating community conditions and sentiment and updating the plan,” according to the LUP’s website.
Affordable housing, short-term rentals
One of the biggest issues the community has voiced concerns about it the future of short-term rentals.
While the LUP would not set specific guidelines dictating what homeowners can and cannot do, it would offer the town several options for regulating them according to Jay McLeod, project planner for the LUP.
There are also concerns regarding affordable housing in the small island town.
”There is a lack of affordable housing and it seems that the most profitable development project is residential in nature. Second homes or vacation rental properties are in high demand. Standalone residential apartment or condos will displace nonresidential uses if left unchecked, which changes the character and balance of land uses. The many short-term rentals are also a concern,” according to the draft of the plan.
While the cost of owning a home has increased, the number of homeowners has decreased in the past several years. Further, the homes that are available for rent in the town have seen a steady increase in rent and renters are considered to be cost-burdened, or spending more than 30% of their income on rent annually.
“Homeownership rates have seen a decline in the past two decades. Rates of homeownership went from 65.7% in the year 2000 to 54.7% in 2016 while rental rates have increased by 45.3% over the same time period (2000 Census, 2016 ACS 5-year Estimates). Nearly 40% of occupied rental units in Carolina Beach are paying more than 35% of household income on rent,” according to the draft.
An even more impressive statistic that has been a contributing factor to the increase in costs on the island is the fact that nearly half of the available housing units in Carolina Beach are vacant housing (for seasonal, recreational, or occasional use).
“Vacant housing makes up 54.2% of the housing units within the Town. The 2,979 vacant units include occupancy status of persons who have a typical residence elsewhere,” the draft plan states.
Impact of short-term rentals
As more homeowners purchase investment properties in Carolina Beach for short-term rental purposes, the available housing stock decreases leading to an inevitable rise in rents and the cost to live in the town.
The town does not currently regulate short-term rentals but the topic has been brought up more than once.
“Often short-term rentals are zoned residential and developed to residential standards, but in Carolina Beach these properties should be regulated as what they are: small-scale commercial hotels. This will affect zoning, use and nuisance regulation, building standards (including fire safety), and also potentially taxation,” according to the drafted plan.
While vacation rentals do drive the economy, there are lasting impacts the draft plan points out.
“Short-term rentals have the potential to be strong economic engines for tourism, but also have the potential to diminish the character of established neighborhoods, akin to the impact of a predominance of vacation rentals. To give certainty to homeowners, residents, investment property owners, rental managers, and vacationers, the Town should establish clear geographic boundaries, policies, and guidelines for short-term rentals,” according to the draft.
While the LUP will not be the sole decisionmaker when it comes to short-term rentals, there are several presented suggestions to regulate them.
- Increased standards and zoning regulation of short-term rentals, which may include any of the following:
- • LC-6.1.Require short-term rentals over five bedrooms (or 10-person sleeping accommodation) to be constructed to commercial egress and safety standards, including fire sprinklers.
- LC-6.1.b Require the registration of short-term rentals with the town, including the payment and tracking of occupancy and bed taxes.
- LC-6.1.c Require enhanced parking and landscaping standards to accommodate the additional traffic and parking requirements of these properties.
- LC-6.1.d Require a minimum separation between short-term rentals in areas where they are not desired, such as 500 feet.
- LC-6.2 Consider excluding or discouraging short-term rentals in the following general areas:
- LC-6.2.a West of Lake Park Boulevard
- LC-6.2.b West of the Myrtle Grove Sound. • LC-6.2.c Around the elementary school.
- LC-6.2.d In the current R-2 and R-3 residential zoning districts
- LC-6.3 Consider allowing short-term rentals in the following general areas:
- • LC-6.3.a East of Lake Park Blvd and the Myrtle Grove Sound, along the beachfront (south of Canal Drive).
- LC-6.3.b In the corridor along Ocean Boulevard.
- LC-6.3.c Immediately around the boardwalk area.
- LC-6.3.d In the R-1 residential zoning district.
When asked about the potential of regulating short-term rentals, Mayor Joe Benson said he would be hesitant to set any new laws until the General Assembly takes action at the state-wide level.
Those interested can view the entire draft plan here.
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