The Wilmington City Council will move forward with a plan to consider changing how short-term rentals are regulated in the city, which some members of the council said they see as a business and inappropriate for within the city’s residential areas.
A public-input process on short-term rentals is expected to begin in March after the council told staff to study the issue and report back. Senior city planner Christine Hughes told the council the public process could begin in March, which would result in a report by May, followed by planning commission consideration in July and consideration by the Wilmington City Council as early as August.
Popular online rental sites like AirBnB or VRBO allow property owners to rent out rooms for short periods, similar to a hotel. One supporter during a Feb. 2 city council meeting said visitors to historic cities like Wilmington will favor these short-term rentals for a better experience, especially within the historic district.
But the Residents of Old Wilmington (ROW), an association of residents of the city’s historic district, told the council in December 2015 that short-term vacation rentals were becoming a problem in these neighborhoods.
“These businesses are proliferating in the historic residential neighborhoods at an alarming rate and they are changing the character of these neighborhoods,” representatives of the Residents of Old Wilmington said in a letter to the council.
In preparing the report, the city’s staff studied 16 other cities, but found no consistent rules governing the rentals.
“There are no clear best practices. Most cities that are regulating short term rentals are using a process developed for that city,” said Hughes, adding that in many cases, it took months or years for the city to implement the rules. “The issue is usually controversial.”
The city currently does have rules that serve to restrict rentals by requiring a minimum seven-day period for residency. Those rules are enforced through a complaint-based enforcement process. The city’s options include to continue with that system, to begin proactive enforcement of the residency requirements or to change the code to either revise the restrictions or allow short-term rentals to go unregulated, Hughes said.
In its letter to the Wilmington City Council, ROW said that its own research into short-term rentals on the Internet found there were as many as 80 in the city, with one owner claiming to operate 23 in Wilmington. These businesses provide “hotel-like accommodations” and offer fee-based services.
Additionally, operators of short-term rentals are buying less-expensive homes, usually single-family homes, and converting the properties to rentals, ROW said. Sometimes renters will bring noise, traffic and trash with them; some residents have complained that instead of living in a residentially-zoned neighborhood, they are in a hotel district.
“There can be no doubt that these are businesses,” the letter said, noting that ROW also believes the city code already has rules to enforce restrictions on the rentals. “Short term vacation rental businesses also compete unfairly with hotels. They offer unregulated, and therefore cheaper, hotel-type accommodations to vacationers. This reduces the occupancy rate in the downtown hotels.”
During the city’s Feb. 1 agenda briefing, council member Kevin O’Grady was an outspoken opponent of allowing short-term rentals outside of the central business district.
“In my view, there’s a clear line. Renting a short-term rental is running a business in a residential area,” O’Grady said. “We have to preserve that residential character, otherwise, we won’t have people investing hundreds of thousands to improve these homes, so that people can come see them.”
O’Grady noted the city has taken steps in the past to keep other businesses out of the historic district, including law firms and wedding receptions. He also said the current seven-day residency rule was insufficient for enforcement, as it left city staff too little time to react to complaints.
Hughes also told the council that consideration of short-term rental restrictions for downtown could also require the city to modify its rules regulating bed and breakfast lodging.
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