Isle Of Palms Short-term Rentals Could See Occupancy Caps, License Limits

By Brian Sherman for The Island Eye News

The Isle of Palms Planning Commission has determined that the city should limit the number of short term rental licenses it issues on parts of the island, but not for the high-priced properties along the beach. Following a year-long study, the Commission presented its findings to the City Council on June 21. The Council is expected to take an in-depth look at the recommendations at its July 12 workshop, according to Mayor Phillip Pounds. If the Council takes the Planning Commission’s advice, the cap will be set at 10% above the number of licenses issued in 2020 in three areas: the homes southwest of the IOP Connector along Palm Boulevard – Zone 1; the neighborhoods northeast of the Connector and north of the houses along Palm Boulevard – Zone 2; and most of Wild Dunes and the areas west of Wild Dunes – Zone 3. According to Director of Building, Planning and Zoning Douglas Kerr, the recommendations don’t apply to areas where more than 25% of the properties already are rented, which includes Palm Boulevard between 21st and 41st Avenues, south of Palm Boulevard from 41st to 57th Avenues and Palmetto Boulevard inside Wild Dunes.

Commercial and multifamily properties would be exempt as well. “The data shows that the rentals on the island are migrating away from the beach and into the areas on the back side of the island,” Kerr said. “Residents in these areas are concerned that their neighborhoods could be changed if this trend is allowed to continue unchecked.” Kerr further explained that members of the Planning Commission felt that a cap would be unnecessary along the beach, “because the numbers of rentals in these areas is reducing due to market pressure, and these areas have traditionally had a high percentage of properties in the rental program and owners are accustomed to having rentals within their neighborhood.” In 2020, out of 1,414 shortterm rentals,1,057 were in the uncapped area; 71 in zone 1; 134 in zone 2; and 152 in zone 3. There currently are 1,417 short-term rental licenses on the entire island, which is down from a high of 1,597 in 2012. The license year goes from May to May, Kerr pointed out. Among properties that are no longer rentals, 80% are now primary homes, City Administrator Desiree Fragoso told Council members at their June 21 meeting. The Planning Commission also is recommending that if a home is sold, the buyer will have the opportunity to purchase a shortterm rental license and that occupancy limits be set at eight in capped areas and reduced to 12 in uncapped areas if a home ceases to be a rental for at least a year and later becomes a rental. Daytime limits would be twice the nighttime limits. Kerr explained that rental homes that were grandfathered in when the city set the occupancy limit at 12 have a higher limit, but, in any case, the city doesn’t permit gatherings of more than 40 at any rental home. The Planning Commission alsohas suggested that those who have short-term rental licenses must take in at least $3,000 a year to maintain those licenses. Kerr said current owners of rental homes probably won’t losetheir licenses – at least not right away. “Not immediately, but there is a part of the recommendation that would revoke a license for a property that is not rented at all or marketed for rental,” Kerr said. “So if an owner has a license but has no intention of renting, they could lose their license.” Pounds pointed out that the Council is in no rush to make a decision on the Planning Commission’s recommendations.He said he hopes to hear from Brumby McLeod – an associate professor at the College of Charleston School of Business and a research fellow with the Office of Tourism Analysis and the Riley Center for Livable Communities – at the Council’s upcoming workshop. 

“We’re going to have him talk about what he has seen all around the country,” Pounds added. “I know we are a unique community, but he’s been involved all around the country in putting together ordinances. I think it would be worthwhile to hear from him.”

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