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Creating a balance

HILTON HEAD SHORT-TERM RENTALS ORDINANCE AIMS TO SATISFY ISLAND RESIDENTS AND RENTAL OWNERS

By Mark E. Lett

Call it “The Great Balancing Act of 2023.”

The town of Hilton Head is moving ahead with a sweeping plan — enforceable Jan. 1, 2023 — to guide the fast-expanding operations of short-term rentals.

It’s a daunting initiative to align the sometimes conflicting interests of residential and resort neighborhoods while protecting the Hilton Head lifestyle and a robust piece of the tourism economy.

An ordinance approved by Town Council in May is a result of nearly a year of research, review, debates, deliberations, comments, criticisms and suggestions from all segments of the community, including consultants, property owners, town officials and others. A range of opinions were harvested by town staffers at public forums, online virtual meetings, surveys and mailings.

The goal, as defined by the Hilton Head government website, is to “develop a fair, predictable and balanced approach to manage short-term rental impacts on our neighborhoods, economy, housing stock, public facilities and the quality of life of our residents and experiences of our visitors.”

Anne Cyran, the town’s interim community planning manager, said the ordinance is intended to “establish expectations for the management and operation of short-term rentals.

“Residents expect to enjoy their homes in peace and tranquility, and short-term rental owners expect to benefit from their investments, which contribute significantly to Hilton Head Island’s economy.

“The ordinance will help create a balance to ensure residents, short-term rental owners and guests are all able to enjoy the island.”

The measure approved by Town Council excludes timeshares, hotels, motels and hospitals. Unaffected are Hilton Head communities where internal guidelines restrict or prohibit short-term rentals. Among those are Wexford, Long Cove Club, Spanish Wells, Indigo Run, Port Royal, Hilton Head Plantation and Palmetto Hall.

The ordinance to take effect Jan. 1 calls for:

  • A $250 permit fee for each short-term rental property;
  • Stepped-up demands on property owners to post information about fire safety, noise, parking and other rules of conduct for renters. 
  • A system of inspections, including additional code enforcement officers and so-called “spot” inspections for safety compliance;
  •  Heightened expectations for owners to be available and responsive to complaints related to their property.
  • Fines of up to $500 or 30 days in jail, or both.

The need is clear, officials said. Short-term rentals – those for less than 30 days – have been available for decades. However, a town staff report estimated a 31-percent increase in annual short-term rental listings (to more than 10,000) between July 2019 and 2022.

An additional report covering gated and non-gated communities identified a sharp uptick in complaints, to more than 36,000 in 2021.

The trend has riled some full-time residents while causing rental owners concerns about whether town restrictions would adversely affect their business opportunities.

The contrasting concerns are threaded through responses to a town survey about short-term rentals. Some residents complain about noise, parking, trespassing and safety. Some rental owners fret that proposed solutions will unfairly stunt rental opportunities.

A sampling:

“I understand we all have a right to be here, but the short-term rentals are forcing the people with accumulated wealth out. What you will end up with is a low-end resort.”

“Why are you spending so much money trying to destroy the livelihood of so many people who have contributed so much to the island? … By limiting rentals, you will destroy what’s left of the small mom-and-pop establishments. Think about the impact it will have on retail, golf courses, restaurants, gas stations, bike rentals, grocery stores, liquor stores, activity companies, boat rentals, kennels, and many more.”

The debate is not unique to Hilton Head. The popularity of Airbnb, VRBO and other vacation bookings have boosted short-term rental activity. Communities from the Atlantic Ocean to the Hawaiian Islands are wrestling with the issue.

Among those:

  • A proposal to cap the number of short-term rentals has stirred debate at the Isle of Palms, a Charleston destination popular with owners and tourists.
  • North Carolina’s Pinehurst village – known for its golf getaways and lakes – is debating the impact of short-term rental restrictions on the area’s
    $363 million in annual tourism-generated revenues. 
  • Honolulu announced a crackdown on short-term rentals, requiring travelers to stay for at least three months to book one.

In researching short-term rental policies in South Carolina, Hilton Head staffers compiled a list to compare fees and permits. The Hilton Head plan calls for owners to pay a $250 annual fee for each short-term rental property. Elsewhere in the Palmetto State, according to a Hilton Head report, charges for short-term rental permits include:

  • $100 for City of Beaufort;
  • $25 for Beaufort County;
  • $325 for Town of Bluffton;
  • $100 to $300 for City of Charleston;
  •  $200 to $500 for Kiawah Island.

Town officials encourage citizens and other interested parties to review the ordinance and related materials on the town website at www.hiltonheadislandsc.gov. The town offers a sign-up option to provide e-mail updates on short-term rental announcements.