Update: Asheville's downtown vacation rental ban passed quickly

ASHEVILLE - Fast-tracked rules to severely restrict downtown tourist rentals passed by a 6-1 City Council vote Tuesday night.

The change means only the rentals with city permits before the Tuesday vote can continue to operate. New vacation rentals can be established only with special permission by the council.

Ban proponents said the policy change needed to happen fast to deal with dwelling units being converted to short-term vacation rentals, a type of rental made popular by online services such as Airbnb and Vacation Rentals by Owner.

"This is about stemming the tide of lost housing," said Councilwoman Julie Mayfield.

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Dissenting council member Keith Young said the ban happened too fast and without a comprehensive discussion about the complicated issue.

"This process seemed to move so quickly we seemed to omit a lot of that," Young said.

The new restriction happens in a city center recognized internationally as a tourist destination, but where there is also a growing feeling by many locals of being overwhelmed by visitors and businesses catering to them.

"Asheville as a local is pushing me out of town," said city native Moira Goree, who told council members about being evicted twice last year so homes could be converted into tourist rentals.

Regulation of the rentals has pitted affordable housing advocates against home owners who say they provide income in a place without many high-wage jobs.

"It seems like sometimes the burden is really put on the residents to fix (what) is a very complicated problem," said Elisa Alverado, who runs a type of legal tourist rental called a homestay that isn't affected by the rule change.

What does it mean?

The change Tuesday means owners of condominiums, apartments or other downtown homes now being rented for periods of less than 30 days can continue to do so, but only if they are already registered with the city.

Property owners without permits could come before the council and ask for conditional zoning to do the rentals, said newly elected council member Vijay Kapoor.

Kapoor noted the rule change made downtown like almost everywhere else in the city where the rentals are banned "by right."

The vote Tuesday means there is only one zoning district — "Resort" — where the rentals are allowed.

"If somebody came to us and said, 'Hey we have an idea for a whole-home short-term rental project' that they want anywhere in the city, whether that be downtown or otherwise, they could bring it to us as a conditional zoning and we could potentially approve it," he said.

But Young said he thought it was unlikely the council would grant such special permission, given the current mood.

"You can still come to council and petition the council ... but honestly, I don’t think you’ll get it," the councilman said.

Almost a week ago on Wednesday, the city's main advisory body on such issues, the Planning and Zoning Commission, voted 4-1 to recommend the new restrictions. Commission Chairwoman Laura Hudson supported the ban but said she thought the council could leverage its conditional zoning power to increase affordable housing units.

The council could do that by giving developers permission to build a certain amount of vacation rentals if they also built a set number of below-market rate rentals for long-term residents, Hudson said.

How did it start?

Short-term vacation rentals turned into a contentious issue in the city over the last three years with the council deciding in 2015 to step up enforcement and increase fines from $200 to $500.

The rentals have helped sway council elections with pro-vacation rental council members gaining in number. A current majority supports loosening rental rules for backyard cottages, garage apartments and other "accessory dwelling units."

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The idea to loosen rules for ADUs would not be affected by the Tuesday vote, Kapoor said. It would also not affect people's right to do homestays, he said.

Those are situations where a long-term resident gets a city permit and stays in the home while renting out a room or two to tourists.

"For me, I think this really boils down to whole-house rentals or whole unit vs. the homestay," Kapoor said.

Doing the rentals in accessory dwelling units could help local homeowners "tap into" the tourist economy, the South Asheville councilman said.

In recent months, the council has clamped down on the rentals in places such as the River Arts District and Haywood Road.

One of the few places they were still allowed was downtown, which is zoned "Central Business District."

That changed Tuesday with a sweeping new rules that took less than three months to enact.

Converting condos to vacation rentals

In October, city staff members told the council they saw a quickly growing trend of condos and other dwelling units being converted into vacation rentals downtown and developers beginning to build projects that included units meant to be used by tourists and not as homes.

At the direction of council members the staff did a study of conversions and presented it to a council committee in December. It showed the number of housing units being turned into vacation rentals outside downtown rose from one in 2015 to 36 in 2017. In addition, there were 19 units under construction or review by the city.

Inside downtown, the number of conversions rose from seven in 2015 to 44 in 2017. Thirty-eight units are under construction at 45 Asheland Ave., said Shannon Tuch, the principal city planner who presented the study.

On Tuesday, Tuch said the number of planned units that could become vacation rentals is now at 53.

Public debates the ban

Four members of the public spoke in favor of the downtown ban, including Sue Robbins, representing Downtown Asheville Residential Neighbors. Four opposed the ban or thought vacation rental rules should be more nuanced.

Robbins said the growing number of rentals was making downtown less livable.

"We strongly believe that the proliferation of short-term rentals in an area which we consider to be our neighborhood is detrimental to the sense of community we are trying to build and maintain."

Former council candidate and musician Andrew Fletcher said the rentals pushed out service industry workers and artists, such as his band whose downtown studio was converted into a vacation rental in 2014.

"People are not being displaced by 120-room hotels. They're being displaced by 120 individual Airbnbs," he said.

Among those supporting the rentals downtown was wedding chapel owner Andy Brokmeyer.

"To limit (tourists) to just a sterile hotel, I think, limits their Asheville experience, and limits our reputation as a desirable tourist destination," Brokmeyer said. "How about a little more creative thinking?"

Downtown resident Kirk Adcock said 10 years ago downtown was more of a community, but now heavy promotion to tourists had changed it into "another Myrtle Beach."

"The Central Business District is different forever. It’s not like a living place any more. It’s for the tourists and the wealthy."

Adcock said residents shouldn't be punished for that and should be allowed to make money like hoteliers do.

A prime promoter of the Asheville area is the Buncombe County Tourism Development Authority. That state-created body is made up mostly of hoteliers and controls $21 million in hotel tax used for marketing and projects meant to increase tourism. The council has tried unsuccessfully to get control of some of the tax.

Council members respond

Responding to members of the public council members talked about limitations in their ability to regulate. For example, the council can't enact its own special tax on vacation rentals without explicit permission from the state, something the General Assembly is not quick to do.

The city also can't treat property owners differently, for example allowing local owners to do vacation rentals while barring out-of-town owners, said Mayfield.

The councilwoman said hotels were different than dwelling units because hotels aren't usually suitable for long-term residents.

"If you are building a new unit that someone can live in, it has a bedroom, a bathroom a kitchen, we want that to be used for someone to live in it long-term. That is the way that we help address our housing shortage."

She also said that many hoteliers do, in fact, live in Asheville.

In voting no, Young said he was surprised by the speed of the change and said "I've been trying to get a gun buyback program for two years."

The councilman said he didn't disagree with all parts of the rules but thought arguments brought up by home owners about issues such as property rights were worth considering.

Young disagreed with those who said there was a housing shortage at all levels.

"If you have about $300,000 you can find somewhere to live in this city."