New bill seeks to regulate short-term rentals in cities and towns

CHARLOTTE — Homeowners in North Carolina could finally get clarity on the rights they have to rent out their homes or rooms on a short-term basis, like through websites such as Airbnb or VRBO. The short-term rental industry has led to lawsuits and divided neighborhoods, and confused local governments trying to navigate the complex legal ramifications of regulating rentals.

North Carolina Senate Bill 291 provides homeowners clear guidance on what local governments can regulate, something the state does not currently have. The bill explicitly prohibits local governments from outright banning short-term rentals (STRs), while laying out what regulations those municipalities can adopt or enforce.

The bill states cities and towns cannot limit the number of nights the property is rented, require the owner to stay at the property at any time, or classify rentals as commercial use.

It does allow the regulation of short-term rentals, letting cities and towns limit the number of renters to two adults per bedroom, require a parking plan with one space per bedroom, restrict short-term rentals to residential zones, and require the host or their authorized agent to be within a 50-mile radius while the property is being rented. That provision would make it illegal for someone in Charlotte to rent out their beach or mountain house.

Local ordinances can also require a rental operator to obtain a permit for up to $25, which can be revoked if the rental incurs five health and safety violations within a 12-month period, as long as the host has an opportunity to contest and remedy the violations.

The bill starts by addressing the constitutional rights of homeowners to do what they want to with their own property. It also criticizes the efforts of some local governments to restrict STRs, stating “Cities often frustrate tourism and infringe on property owners’ private property rights by adopting ordinances that inhibit property owners’ right to use their property they see fit.”

The bill also notes the positive impact STRs have on the state saying, “Short-term rentals provide housing options for transitory workers, including nurses, tradespeople, and executives.”

Cities and counties like Charlotte, Cornelius, Matthews, and Iredell have considered and attempted to regulate STRs. This is not the first time lawmakers have attempted to provide guidance through state law, but previous efforts have not come to fruition. The opinions on the legality and attempts the regulate industry continue to cause divide in communities.

Federal judge rules on lawsuit that could decide future of NC short-term rentals

Short-term rentals are not a new concept, but the quick and easy access to rentals through apps like Airbnb and VRBO have put STRs in the spotlight in recent years. The technology and simplicity have made it easier than ever for homeowners to offer their homes to travelers as an alternative to hotels. But unlike hotels, the lack of statutory regulations has opened the door to legal challenges and debates on the rights of homeowners.

In North Carolina, the Vacation Rental Act – written years before the growth in popularity of online platforms like Airbnb – outlines the rights of tenants, but not the rights of homeowners. In the absence of clear requirements from the General Assembly, local governments have attempted to tackle the subject on their own, prompting lawsuits and contentious meetings for city councils and town commissions.

A 2023 lawsuit brought by homeowners in Wilmington, N.C., ended with the court declaring the city’s rental restrictions illegal, which has shaped how other cities across the state address regulations. If enacted, the bill would help both homeowners and local governments have uniformity when it comes to rental rights, removing the current patchwork regulations that often vary from community to community.

On Monday, the bill passed its first reading in the N.C. Senate and was referred to the Committee on Rules and Operations of the Senate. Both chambers of the legislature would need to approve three readings of the bill before it could become law.

VIDEO: Neighbors share concerns, criticism for hostel-style Charlotte Airbnb