Significant short-term rental restrictions unlikely in Black Mountain

Town council reviews data, considers options ahead of Unified Development Ordinance review

Fred McCormick
The Valley Echo
March 30, 2023

Black Mountain Planning Director Jessica Trotman presents a report on short-term rental units to the town council on March 29. Photo by Fred McCormick

Significant regulations of short-term rentals within the Town of Black Mountain are unlikely, following a March 29 special call meeting of the town council.

The board, which convened to review options and data related to potential zoning restrictions as the town begins considering recommendations for the pending Unified Development Ordinance, favored minimal requirements for property owners who accommodate overnight guests. The afternoon meeting was attended by dozens of residents, many of whom sat on the floor or watched from the hallway.

“We thought it would be good to include this topic in our UDO, and the previous council decided this meeting would be important in allowing the council to look at this first, before the planning board starts deliberating on the language they want to see,” Town Manager Josh Harrold told elected leaders to open the meeting. “We’re looking for some direction for the planning board.”

Planning Director Jessica Trotman presented a report highlighting potential options that could allow the town to regulate short-term rentals through zoning compliance.

“When we released a request for proposals to hire a consultant to do our UDO, we had a whole list of things we wanted to improve and gaps we wanted to acknowledge and explore,” Trotman said. “Short-term rentals were one of those things. There has been no specific event, complaint or issue brought to staff’s attention that brought about this meeting. I’m certainly not making any recommendations to you today; I’m just bringing you information.”

The report cited the town’s “long history” as a vacation destination with summer cottages, camps and conference centers and indicated a lack of existing regulations on short-term rentals have likely led to an increase in available units. Economic influences, including insufficient hotel and bed and breakfast accommodations for a growing number of tourists, and the demographics of the town, were also offered as context.

“Half of Black Mountain’s residents are not in the workforce, which is a unique element of our economy,” Trotman said. “That doesn’t mean half of the town is unemployed, it means half of the population is not seeking work. They are retired.”

Owner occupied residential units within the town, as of 2020, represented 64% of the inventory, comparable to national data and slightly below the 65.9% reported by the state. The town, according to the report, would be limited to zoning regulations as a means of regulating short-term rentals.

“This has been a moving target and a great way to get sued for a long time in N.C., but we have a little clarity now,” Trotman said. “Small towns have shied away from regulations for a while because the risks were pretty high.”

While establishing a registry of available rental units would allow the town to collect accurate data on the number of short-term rentals in Black Mountain, an April, 2022 opinion from the N.C. Court of Appeals in the case of Schroeder vs. the City of Wilmington upheld a previous ruling prohibiting the practice.

“The N.C. School of Government continues to be very confident, particularly after the Wilmington case, that good old-fashioned zoning is going to be the way we can regulate short-term rentals, if you choose to do that,” Trotman said.

The planning department’s report presented multiple options to limit the rental units in specific districts, including occupancy caps and parking restrictions.

A subsequent report from Chip Craig, founder and owner of Greybeard Realty, provided additional data on short-term rentals within the 28711 zip code. The real estate company, which has four offices in Black Mountain, Asheville, Old Fort and Lake James, manages 93 rental units in the town.

Craig cited a Land of the Sky Association of Realtors study on the economic impact of short-term rentals in Buncombe County. The data showed short-term rentals accounted for less than 3% of the total housing units in the county and generated approximately $657 million in revenue in 2020. Those units, according to LOTSAR, accounted for 34% of Buncombe County Tourism Development Association lodging sales in 2022-23.

Dozens of Black Mountain residents attended a March 29 special call meeting of the town council, which reviewed information related to short-term rentals in the town. Photo by Fred McCormick

Data from AirDNA, which tracks the performance of units listed on Airbnb and VRBO, was less precise regarding short-term rentals within the town limits of Black Mountain.

As of 2021, there were approximately 7,438 housing units within the 28711 zip code, according to the report, while 477 were listed as short-term rentals by March of 2023. The rental units account for approximately 6% of the housing stock in the area studied.

“COVID had a tremendous impact on this industry,” Craig said, presenting a graph tracking active short-term rental units from 2018 through February of this year. “If you look at April (2020), which is basically when COVID hit, it took people a while to figure out what was going on. Then they were like, ‘hey, I want to live in the mountains.’ There was a big growth in STRs in Black Mountain.”

The numbers, according to Craig, showed a 57% increase in short-term rentals from December of 2020 through the first two months of 2023.

“I’ve been doing this for a while and I’ve never seen anything like the pandemic, which obviously had an impact on short-term rentals,” he said. “But, using that broader number, they still represent only 6% of the housing supply.”

Revenue generated by short-term rentals in the zip code increased by 48% in 2020 and by 50% in 2021, before dropping in 2022.

“Our numbers are tracking down by about 10% from last year, and we’ve added more houses,” Craig said. “We’ve added 15% more houses, so I anticipate us to be somewhere between the numbers from 2019 and 2022 this year.”

The assertion that short-term rentals negatively impact affordable housing in the zip code, he continued, is not supported by evidence.

“Any time you take supply out of the market, it increases prices,” Craig said. “But, at 6%, it’s very minimal.”

Of the 93 short-term rentals managed by Greybeard, he added, only seven are investment properties.

“Vacation homes are not usually affordable or low-income housing,” he said.

The current real estate market in the area is “scary,” however, according to Craig.

“There has been a huge increase because of the pandemic, and people want to live here,” he said.

The median sales price of homes in the zip code increased from $286,000 to $464,000 between 2019 and 2023, according to the report. Demand is decreasing, Craig continued, but low inventory keeps prices from falling.

“The problem with Black Mountain is that in 2019 there were 128 homes on the market and right now there are only 33,” he said. “So, if I had to guess, unless something huge happens, prices are not going to continue to go up like they were, but we’re going to see a stabilization and maybe a slight increase.”

Mayor Mike Sobol expressed his support for regulation of short-term rentals following the presentation.

“I think the first thing we should do is to allow them in owner-occupied homes, just like Asheville, and make some exceptions before letting the planning board figure it out,” he said. “To say that restricting short-term rentals will have a devastating economic effect, I don’t see that from this data.”

Councilmember Bill Christy, however, disputed the notion that short-term rentals were changing the character of the town.

“Yes, Black Mountain has changed. I moved here in 1995, and it’s a very different town than it was, but I wouldn’t attribute that to short-term rentals,” he said. “There are many factors leading to the changes here. I am certainly open to getting more information, but I think the market will cure a lot of the short-term rental issues.”

The data presented in the meeting led Councilmember Pam King to agree with Christy.

“From time to time I hear anecdotal experiences and concerns, but I can’t tell from that if the sky is falling,” she said. “This data really helped me get my head around how much of a problem this is. I’m inclined to agree with Councilmember Christy at this point.”

Vice Mayor Archie Pertiller, Jr., a lifelong resident of the town, agreed that Black Mountain has changed over the years, but dismissed short-term rentals as the root cause.

“It’s just expensive to live here, period,” he said. “Honestly, I don’t know how I live here, and if it wasn’t for my great-grandfather I couldn’t live here.”

Pertiller expressed his reluctance to regulate how citizens utilize their property.

“I’m stuck there, and I appreciate this data because it will help me,” he said. “At this moment, I’m with Councilmember Christy, and I think there needs to be a lot more investigation done. We need to be careful what we do, if we do anything.”

Citizens who have spoken to Councilmember Alice Berry, however, don’t want the town to continue being a vacation destination, she said.

“I can appreciate that short-term rentals aren’t the only component of concerns around the cost of living,” she said. “I want to keep looking at what we can do as a town.”

While Doug Hay, who recused himself from voting on the matter at the start of the meeting due to a recent conversion of a detached garage on his property, found the reports helpful, he also believed the data was incomplete.

“We hear regularly from people who feel like their streets are becoming more and more filled with vacation rentals…” he said. “At the same time, I have the same concerns as Archie about placing restrictions on what people can do with their property.

“I have an appreciation for the fact that this is a tourist community, and a lot of the changes I like to see in this town are because of the economic impact of people coming to visit,” he continued. “One area I’m interested in looking at is around fire safety, carbon monoxide detectors and those kinds of safety regulations.”

Guidance for the planning board will focus on “minimal” regulations, according to Harrold’s summary to the board.

“I’m happy to have the planning board prepare some draft language that focuses on safety issues and neighborhood character,” Trotman told the town council. “Those are the simple types of regulations you can start with that can prevent things like overparking and making things not fit into a residential district.”