Raleigh closer to Airbnb rules, but will City Council allow whole-house rentals?

The city moved closer this week to possible rules for Airbnbs, but whether Raleigh residents will be able to rent out their whole house remains far from decided.

Short-term rentals — popularized by websites like Airbnb and VRBO — are currently illegal in the city’s neighborhoods, but the City Council decided years ago to regulate, not prohibit, them.

On Tuesday the council’s Healthy Neighborhood Committee unanimously recommended rules that mirror the city of Asheville’s.

The rules would allow a person to rent out two guestrooms after paying a yet-to-be-determined fee for an annual short-term rental permit. Guests would be limited to four adults and their minor children in the two guestrooms. And no large cooking appliances like a stove or refrigerator would be allowed in the guestroom. Short-term rentals are normally less than 30 days.

People who want to rent out their guestrooms would have to notify neighbors within 100 feet of their property. This would give neighbors a “heads up” to be on the lookout for potential violations but the neighbors could not stop the applicant from getting a permit. The draft rules originally created a buffer between permit holders, but that was removed at the request of the committee.

There was less consensus on whole-house rentals, and the committee asked staff to bring back recommendations about them. In whole-house rentals, the homeowner is not present during their guests’ stay.

Council member Stef Mendell urged the committee to recommend those rules it agreed on.

“It’s my understanding that there is a majority of council who do not support whole-house, short-term rentals in residential areas,” she said. “My feeling is let’s get [partial rules] on the books because we think we have agreement on this and we can continue to discuss the whole-house issue. The votes aren’t there.”

Mendell said she doesn’t support whole-house rentals.

“I know there are a lot of good actors out there,” she said. “I know there are people who are responsible, who talk to their neighbors, who are happy with the situation. But for the people who live next door to the real ‘horror stories’ it is very different.”

Airbnb has 640 hosts within Raleigh. The company does not disclose how many are renting out a room, multiple rooms or an entire home.

“If you look at the hundreds of people across the city who are doing it consistently and doing it well, I don’t see the need to punish all of them if they are doing it right, when we as a city have the ability to take care of the people who are doing it wrong,” Mayor Nancy McFarlane said.

She asked staff to bring back whole-house options and how other cities address them. She also asked if other cities allow whole-house, short-term rentals for a portion of the year.

This, she said, would allow people to rent out their homes during big events or while on vacation, but would not encourage people to buy homes solely to list on websites like Airbnb.

There are benefits to short-term rentals, said council member Nicole Stewart. They can help people visit an area before they decide to move, she said, as well as help hosts earn extra money to pay their housing costs,

Stewart said the council may be trying to solve a problem, when “I’m not sure we actually have one.”

“Oh, we have a problem,” Mendell interjected.

The city needs rules for whole-house rentals that address the “bad actors” while still allowing the good renters to remain, Stewart said.

What’s next:

The short-term rental rules still have a long journey before becoming local law.

The City Council will likely get a report Jan. 22 and send the rules to the planning commission for review. The commission will have 90 days — with an option for an extension — to recommend or not recommend the rules. The rules will then go back to the council for a public hearing and council vote.

If those rules are approved, it doesn’t automatically mean the city would start enforcing its ban on whole-home, short-term rentals in residential areas. That would take a separate council action. It’s unclear when the whole-house rental information will come before the council committee.

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Anna Johnson covers Raleigh and Wake County for the News & Observer. She has previously covered city government, crime and business for newspapers across North Carolina and received many North Carolina Press Association awards, including first place for investigative reporting. She is a 2012 alumna of Elon University.
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