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Frequently Asked Questions

  • Are full-time residents exempt from a short-term license cap?
    Yes. Preserve IOP Now supports continuing to allow residents living in a legally recognized owner-occupied residential dwelling to rent their homes on a short term basis for a period not to exceed 72 days during any calendar year without any license cap.
  • Are commercial areas exempt from the short-term rental license cap?
    Preserve IOP Now began as an effort to support the short term rental limitations introduced by Councilmember Pierce, which carved out the front beach commercial district and established a limit over the rest of the island. When that did not occur, Preserve IOP Now began the current citizen referendum initiative to force a limit. An unfortunate byproduct of the majority of Council failing to address the issue, is that a citizen initiative cannot impact zoning, which means the condominiums and homes constructed in GC-1 and LC commercial districts are subject to the limit. There is no way around that fact from a citizen initiative and referendum perspective and therefore the front beach commercial condominiums (which are not hotels, but sometimes refer to themselves as such from a marketing perspective) and homes constructed in those districts are not exempt from the proposed short-term rental license cap. These units represent 8% of all IOP dwelling units. The only group (Council) that could enact a limit removing our front beach commercial district from the equation, failed to do so on February 28, 2023. The historically referenced rental balance on the Isle of Palms was 33% of all available dwelling units, regardless of location or type of rental license. The claim was that so long as only 33% of our dwelling units were rentals, the impacts would be limited and balance would be maintained. There are currently 4,575 dwelling units on the IOP. 33% of that is 1,510 dwellings. Since the commercial areas are not able to be exempted from the Cap, the original Cap number contemplated by Councilmember Pierce’s proposal has been increased to 1,600 in an attempt to accommodate the inclusion of the units in our commercial areas. It is important to keep in mind, this limit applies ONLY to non owner-occupied licenses. This cap number represents 35% of all available dwelling units, is higher than the current number of licenses issued, doesn't impact current license holders and is a reasonable compromise. It should also be noted that the point behind implementing a cap is not only to preserve the residential areas, but to limit overall island density and impacts. The proposed limit does that.
  • If I have a short-term rental license, will I be able to renew it?
    Yes. Preserve IOP Now proposes that property owners holding a short-term rental license would have preference to renew their annual license, even if the cap is exceeded. Preserve IOP Now supports the renewal of short-term rental licenses issued to active rentals in good standing with the City.
  • If I transfer my home to a family member, will the short-term rental license go with it?
    Yes. Preserve IOP Now supports the transfer of any STR license to an eligible family member upon the transfer of the property to said family member. An eligible family member is defined as a spouse, parent, step-parent, sibling, step-sibling, sibling-in-law, child, step-child, grandparent or step-grandparent.
  • If I sell my home to an unrelated third-party, will the short-term rental license go with it?
    The IOP Business License ordinance states "A business license shall not be transferable, and a transfer of controlling interest shall be considered a termination of the old business and the establishment of a new business requiring a new business license", therefore, Preserve IOP Now does not support allowing active short-term rental licenses, which are by definition business licenses, to be transferred to an unrelated third party upon sale.
  • Does a short-term rental cap violate private property rights?
    The laws governing private property make a clear distinction between the ownership of private property and the use of private property. While the law strictly limits situations in which ownership of private property can be taken by a government, the ability of an owner to use property in any particular manner has never been unrestricted or guaranteed. This distinction between property ownership and property use exists because property rights involve a balancing of the rights of one property owner against those of neighboring property owners. Some restrictions on property use are necessary to maintain that balance. It’s the reason we have zoning laws. It is also the reason Isle of Palms, like most municipalities, requires a business license to operate a business on private property. Under the law, short term rentals are a business like any other. Our zoning and licensing regulations act to balance the use of private properties that must coexist on a small island. As a result, certain types of businesses are not permitted at all because of the impact on neighboring property owners or the coastal environment. Other types of businesses must be limited to maintain the balance.
  • Will my taxes go up if IOP puts a cap on short-term rentals?
    Enacting an upper limit on the number of STR licenses WILL NOT impact the City revenue. No proposal suggests lowering the number of licenses or impacting the revenue received from STRs historically. This would not impact IOP taxes.
  • What is the impact of a short-term rental to a neighborhood?
    A rental property in a neighborhood has the impact of about 5X that of a full time resident. For example, a five bedroom rental occupancy = 5 full time residences. So, in a neighborhood with just 10 homes, if only 2 are rental properties the rental occupancy exceeds the entire rest of the neighborhood. This only addresses occupancy. While we’re all on vacation we tend to generate more trash, noise, traffic and other impacts than when we are at home. So the impacts can be even greater. With over 6,000 bedroom and hotel rooms now available for rent on the Isle of Palms, the occupancy in high season is well over 3X the entire resident population. Additionally: US Census records reveal that the typical Isle of Palms owner-occupied dwelling was inhabited by 2.7 people in the year 2000 falling to 2.3 by 2020. This coincides with our trend of retiring residents – fewer families. This is the effective density and impact rate of an owner-occupied dwelling on the IOP livability and infrastructure (water, sewer, trash, police, fire, traffic, etc.). Conversely, the IOP STR records, combined with Charleston County tax records, reveal that the average STR occupancy on the Isle of Palms is 2.5 short-term rental guests, per room as of 2022. If we consider an average IOP street containing 30 homes and extrapolate the density to the dwelling units, it would only take 6 STR’s to equal the density and impact of the remaining 24 homes. Under a traditional residential philosophy, 1/3 of the homes equals a 1/3 impact. Under the current STR model, it clearly does not.
  • Hasn't all the increase in short-term rental licenses been caused by a run on city hall by residents?
    As of February 17, 2023, 1,777 STR licenses had been issued. Of the 1,777 issued, 11% are issued to full time residents occupying the property. Based on these numbers, it does not appear that residents have put a run on STR licenses.
  • What is the full-time resident population trend on IOP?
    The long term full time resident population on the IOP is shrinking. As detailed in the Isle of Palms Comprehensive Plan, in 2000 the US Census revealed that 50.1% of the dwelling units on the IOP were occupied by full time residents. From 2000 to 2010, that footprint shrank to 42.8%. According to City records produced during the recent STR workshops, by 2020 the full time footprint shrank yet again by an additional 6% leaving only 37% of the dwelling unit occupied by full time residents. The same records show the full time footprint shrank yet again from 2020 to 2022 by an additional 1%, leaving only 36% of the island dwelling units occupied by full time residents.
  • What is the part-time resident population trend on IOP?
    The part-time resident population on the IOP is shrinking. The recent City of Isle of Palms Strategic Plan Community Survey revealed that 62% of the City’s part time residents lived on the IOP for 3 – 9+ months a year. The 2000 – 2020 US Census records reveal that in the decade from 2000 to 2020, the IOP lost 6.5% of our part time residents. The 2010 Census showed our lowest percentage of part time residents when they made up only 20% of our community. When combined with the full time resident trend, it is clear the integrity of our established residential community is in jeopardy.
  • What is the short-term rental trend on IOP?
    The short-term rental trend on the IOP is growing. A 1988 article in the News & Courier stated that there were about 250 homes for rent on the Isle of Palms, with 80% of those (200) used for weekly rentals. The first year the City kept records regarding rental licenses was 2001, when long and short term rental licenses were grouped together. When the long term rental number reflected in the census records is removed from the license count, the IOP had approximately 836 STR licenses issued in 2001, a 318% increase from 1988. From 2001 to 2010, the STR footprint grew to 1,594 of the 4,274 available dwelling units, or 37.2% of all dwelling units and a 91% increase in licenses issued. According to the information provided during the March 2021 Ways & Means STR discussion, STR footprint grew for 2020 to 1,622 of the 4,419 available dwelling units. Due to the increase in total available dwelling units, the overall percentage of STR’s was 36.7%. As of February 17, 2023, 1,777 STR licenses had been issued. The 2023 dwelling unit number is currently reported to be 4,570 bringing the STR license percentage to 39%.
  • Why consider a cap on short-term rentals?
    On June 22, 2021, the Isle of Palms City Council requested an analysis be made by the Planning Commission in order to enable the City to identify trends in short-term rentals and their impact on the livability of Isle of Palms residents. Over the course of a 12-month review, the Planning Commission recognized a definite increase in the number of STR’s in low density, residential areas that historically had a low number of rentals. We are now 369 licenses over the number issued in 2021 (1,403), which led to the recommendation to limit the number of short term rental licenses issued each year. Also, the US Census records clearly state that both our full time resident and part time resident footprints are shrinking while the STR footprint is growing. Left unchecked and considering the limitations established in surrounding communities, the projections for the next decade show a continued investment in STR's in our residential community while our residential footprint dwindles. IOP is now the only attractive rental investment market in the area with no cap. When you are the only available market for investment, without a cap, IOP will continue to attract more investment.
  • With interest rates rising, won't the issue on short-term rentals take care of itself?
    Quite the opposite. A recent article discussing interest rates in the residential sectors stated: ​"Investors have not given up on the residential market, using financing options to take advantage of low housing inventory and turning properties into rentals. This strategy contributes to the high housing prices seen in the past couple of years. ​According to property intelligence data company CoreLogic, the investor share of single-family homes sold in the first quarter of 2022 reached 28%, 11% over the same period in 2021." Rising interest rates actually help pure investors as they purchase homes on a scale larger than our traditional rental home owner is able.
  • We've been compared to Malibu, CA. Won't market conditions address the balance?
    The 2020 Census revealed that Malibu, CA has a residential population of 10,654 and an owner-occupied housing unit rate of 76.4%. At last report, there were 202 STR licenses issued in the City of Malibu representing less than 4% of their 6,441 available dwelling units. Despite that incredibly low percentage, Malibu is working to enact a host-only short-term rental model that, like the City of Charleston, would limit STR’s to only those properties where the owner also occupies the property. Malibu is not allowing market conditions to address the balance of STR’s in their neighborhoods to reduce over-concentration and neither should the Isle of Palms.
  • Why can't we just enforce existing ordinances?
    These efforts should be considered independently and enforcement is simply a best practice on behalf of our residents. It’s not an either/or scenario. As it was pointed out in the October 25, 2022 Council meeting during the noise ordinance discussion, the IOP only has 3 police officers on duty at any given time. This level of staffing does not allow for enforcement of the existing short term rental ordinances. Additionally, it has been determined by the Chief of Police that a number of these ordinances are unenforceable from a Public Safety perspective.
  • Does capping short-term rentals impact the value of my home?
    Ultimately, capping STR’s on the Isle of Palms will serve to protect the value of your home as an owner-occupied home. It will also serve to increase the value of the permitted rentals on the Isle of Palms as the pool will be limited to protection against over or unlimited supply. Conversely, not capping STR’s could negatively impact the value of your home as an owner-occupied home. If marketed as part of a commercial rental business model, the value of your home would increase as a commercial rental due to the analysis being based upon income generation as opposed to the more traditional home valuation models (proximity to work, schools, transportation and traffic related factors, livability, etc.).
  • I'm a resident. What if I (or my heirs) want to rent out my house in the future?
    No problem! As long as it is your primary home, you can rent it out for up to 10 weeks (72 days) on a short-term basis. There are no restrictions for renting your home out for “long-term” rentals. If you want to turn your home into a full time short-term rental, and if (worse case scenario) there is a waiting list, you can get on the list and still rent it out “long-term” (annually or seasonally) until a license becomes available.
  • Are hotel rooms included in the short-term rental license cap?
    No. Only individually owned, separately taxed, dwelling units are subject to the business license cap. While some of the condominium complexes on the island market themselves as “hotels”, they are not hotels. They are individual condominium units within a condo complex that may be owner-occupied, second homes, or rentals. Each condo owner that wishes to rent on a short term basis must obtain a business license issued to the property owner of record. Any lock-out rooms in these same complexes are also individually taxed and owned. These have been, and will continue to be, subject to the same business license ordinances.
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