Raleigh leaders agreed Tuesday to let people to rent out guest rooms in their homes on websites like Airbnb but not their entire home.
It’s the end of a years-long limbo for the hundreds of people who rent out rooms on a short-term basis and the thousands of guests who may have visited Raleigh without ever knowing they were technically breaking local rules.
City Council members David Cox, Kay Crowder, Stef Mendell, Russ Stephenson and Dickie Thompson voted in favor of allowing people to rent out one or two of their rooms, called homestays.
Council members Corey Branch and Nicole Stewart voted against the rule, while Mayor Nancy McFarlane missed the meeting due to her back surgery.
The rules require short-term rental hosts to:
- Purchase an annual $172 short-term rental permit. That drops to $86 for renewal.
- Notify neighbors within 100 feet of the property they are seeking a permit – though neighbors cannot stop the process.
- Live on the property while a guest is staying at the home.
The ordinance originally limited adult guests to four, but Thompson asked for a two-adult limit. The rooms cannot be used for special events, and backyard cottages cannot be used for short-term rentals.
In theory, creating homestay rules wouldn’t have affected residents who wanted to rent out their entire homes, called whole-house rental. That’s because the council had previously agreed not to enforce a ban it passed on short-term rentals several years ago.
But Mendell made a motion to begin enforcing the city’s ban on short-term rentals beginning Jan. 1, 2020. The council approved that by the same 5-to-2 margin.
That means unless the city creates rules for renting out a home, as it did Tuesday for renting out one of two rooms, by the enforcement deadline, whole-house rentals will be barred.
“My understanding from the city attorney was once we passed the homestay (rules), it wasn’t a good idea, from a legal perspective, to not enforce the regulations in the [Unified development Ordinance],” Mendell said. “I have a lot of sympathy for the people who have invested and make money doing this, but giving them a little over seven months to figure out what they are going to do and get it underway gives them adequate time to prepare.”
In addition to the nuisance renters, Mendell said she has two core concerns about renting out a home on a short-term basis.
“By taking some of those properties off the market for short-term rentals, it hurts the ability of people who want to live in Raleigh and make Raleigh their home,” she said. “That is a big factor to me. And the other issue is introducing commerce into a residential neighborhood.”
But the immediate follow-up motions to begin enforcement was jarring, Stewart said, adding she was hopeful she the committee could have taken action before the city began enforcing its ban.
“I think it is a move backward for Raleigh,” she said. “I think it sends mixed signal or a bad signal to folks who are looking to move here, looking to visit here, to people who are trying to bring their friends here to visit, that we are limiting their ways to do so.”
Renting out an entire home is allowed in five non-residential zoning districts, but critics of the council’s ban say there aren’t many homes within those zoning districts.
Raleigh leaders held a public hearing about the proposed changes May 7 but waited to vote at the request of Thompson who was not at the meeting.
Gregg Stebben, who asked about renting out an entire home during the hearing, called the council “uninformed cowards and fools.” He’s been a long-term advocate for short-term rentals and rents out a spare room.
“What message will this vote send to the business community?” he said after Tuesday’s meeting. “Those who are here, those that now or in the future might have thought of relocating to Raleigh? Especially companies in the tech sector.”
During the public hearing Jenny Faison said the city shouldn’t over-regulate short-term rentals because there are already rules that address concerns like noise.
That was echoed by Chris Maxwell, who said people need options and Airbnb also has controls in place to get rid of bad hosts.
The people renting with him currently, were in between homes and were staying with their pets and electric vehicle, Maxwell said.
“You can’t find that at a hotel,” he said.
But John Green said a short-term rental on his street has challenged his family’s sense of safety because of large parties late into the night, and cars blocking their streets and driveways. If short-term rentals are allowed there, he said his family would move from the city.
“Those of you who are (for) Airbnb and short-term rentals, probably don’t have one next to your home,” he said.
Airbnb has previously said it has more than 600 hosts in Wake County but did not break down how many rented out their entire homes or just a room. The company said it generated $24 million in tax revenue, including $15 million in city and county occupancy taxes, in 2018, according to a Tuesday press release.