Orange County

What rules should Chapel Hill employ for homeowners’ short-term rentals?

Chapel Hill native Mike Few served in the Army and then worked as a data analytics professional before investing in short-term rental housing.

He now hosts Airbnb guests at four houses he owns in Carrboro and Chapel Hill, earning a full-time income and paying about 20% of his annual revenues in taxes.

Few has had roughly 250 guests since 2017. They have included local families who needed temporary housing, visiting professors, doctors and nurses, and domestic and international tourists. There also were patients seeking medical care at UNC and their families.

May is the busiest month because of graduation, he said, and when football and basketball are in season. In June and July, guests come for weddings, he said.

“What I love about it, and why I would like to keep doing it, is it feels good when people are coming into town for a wedding, and they come back and tell me it was a great time,” Few said. “If you don’t maintain your property, you’re not investing into it, you’re not making good neighbors, then you’re probably not a good host either, and that is reflected in your reviews.”

Task force, new rules

Chapel Hill-Carrboro Chamber of Commerce and tourism officials estimated there are over 300 short-term rentals in Chapel Hill. However, the data may be skewed by homes and apartments with Chapel Hill addresses that are located outside the town limits.

“No one actually knows what the real data is,” Few said, concerned by people arguing about short-term rentals without factual information. Instead, he says, officials should “use software to collect it, then actually analyze it, and then have the debates about it.”

Abigail Long, with AirDNA, a data and analytics company, said most Chapel Hill rentals are of the entire home, rather than private or shared rooms. Over half are occupied for fewer than three months a year, she said.

Airbnb and HomeAway listed 235 active “entire home” rentals in Chapel Hill in August, she said. About 210 were booked.

The Chapel Hill Town Council will appoint an 11-member task force next month to study the issue and recommend potential rules. Applications are available online through Tuesday. An information meeting will be held at 5:30 p.m. Monday at the Seymour Senior Center on Homestead Road.

The town also has launched a public survey at arcg.is/0v8COT. The survey will be open through Oct. 20.

Making local, state rules

The task force will consider the pros and cons of several options, from permits, occupancy and parking restrictions, to health, safety and insurance requirements, similar to what other North Carolina cities have done.

Raleigh added a number of rental rules and a permit system in May. The rules only allow two adult guests and require the property owner be on site during the rental period. Backyard cottages cannot be rented out. By Jan. 1, the city could enforce a ban on “entire house” rentals. State lawmakers also are looking at putting some rules in place.

Chapel Hill isn’t interested in restricting residents who rent a room in their home or rent their homes while they travel, officials said. However, those hosts may have to prove they live in their home, register with the town and pass a safety inspection.

Few said he would support a $100 annual fee for a permit and insurance and occupancy tax requirements. Short-term rental insurers already set property standards and safeguards, from vetting guests to no-party policies, he said.

Affordable housing, safety

The town’s biggest concerns are public health and safety, followed by the potential loss of more affordable housing to rental investors.

Janice Woychik, a Chapel Hill Realtor and a rental host in Bar Harbor, Maine, said she and her neighbors have had issues with a home in their Mill Race neighborhood. They worry about property values, she said, but also about noise and privacy.

In Bar Harbor, short-term rentals have been a problem, she said. Local media reports the growing number of rentals and an increase in tourism and seasonal employees is adding to Bar Harbor’s affordable housing crisis. The city now requires a license and a $250 annual fee, and is considering more rules and zoning changes.

The growth has damaged some neighborhoods, Woychik said.

“You know the community, you know the people who are right next door. You have a flat tire, someone’s going to help you. ... If you need a cup of sugar, you can go next door,” she said. “But when every other house is being rented out, you can no longer have that same feeling.”

Alexa Nota, president of the Chapel Hill Short-Term Rental Alliance, expects a limited effect on the town’s affordable housing. Rentals here are less than 1% of the housing stock, Nota said, and most of the hosts who joined the alliance this summer live where they rent.

Chapel Hill is not attractive to most investors, Few added, because the cost of land and homes is too high.

Competing with hotels

Local hoteliers also have concerns about rentals, from falling hotel occupancy rates — down 8.2% from 2017 to 2018 — to declining revenues. They joined the chamber and the citizens group Chapel Hill Alliance for a Livable Town in June to ask for local rental rules.

The average daily rate for a hotel in Chapel Hill is $149, according to an online search. Only two of 14 local hotels charged less than $100 a night. That can make short-term rentals appealing to families seeking a less-expensive option, especially if they need multiple rooms.

AirDNA reports “entire home” Chapel Hill rentals listed on Airbnb and/or Vrbo earned $3.8 million in 2018. Data for other companies was not immediately available, but chamber President Aaron Nelson said local hotels have lost nearly $6 million.

Hoteliers said they want a level playing field, which means everyone also pays local occupancy taxes levied on the cost of hotel rooms, rental homes and other lodging. In Orange County, there is a 3% occupancy tax, some of which is slated for tourism and visitor services.

Airbnb has collected occupancy taxes from North Carolina hosts since 2015, but other companies leave tax collection to their hosts.

Many reasons to host

Nota dismissed hotel concerns. Rentals attract atypical visitors and those with special needs, she said; most hosts aren’t in it for profit.

“A lot of them are using the income from short-term rentals to send their kids to college, to supplement their retirement, to supplement their mortgage to stay in Chapel Hill, because it’s a very expensive place to live,” she said.

That’s why he got into the business, Chapel Hill resident Rodney McLamb said about an apartment with a private entrance in his basement. His family interacts regularly with their guests, helping them find a good coffee shop or restaurant, and pointing them to local businesses and attractions, he said. The extra income helps them pay the mortgage, he said.

“I understand people have questions and concerns — we all care about the town, we all care about our neighborhoods, we care about our personal security — we want the town to be welcoming to those who live here and those who visit,” McLamb said.

What’s next

An open house about short-term rentals and the town’s effort to regulate them will be held from 5:30 to 7:30 p.m. Monday, Sept. 23, at the Seymour Senior Center, 2551 Homestead Road in Chapel Hill.

Find more information about short-term rentals in Chapel Hill at tinyurl.com/yyyg9f9z.

Staff writer Anna Johnson contributed to this report.



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Tammy Grubb has written about Orange County’s politics, people and government since 2010. She is a UNC-Chapel Hill alumna and has lived and worked in the Triangle for over 25 years.
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