The last step before the Town Board begins final deliberations about Highlands’ Short-term Rentals was a Public Hearing on the Planning Board’s recommendations for amendments to the Unified Development Ordinance (UDO) concerning STRs.
Every time there is a proposed amendment to the UDO a public hearing must be held before the Town Board. Usually, the Town Board votes on the amendment at an subsequent board meeting and that’s how the hearing closed Thursday night.
“There will be no final action tonight,” said Mayor Pat Taylor.
About 50 people representing two camps – those for the continuation of STRs and those who want them eliminated – turned out for the meeting, but neither group was unequivocally in favor of the Planning Board’s recommendations and stipulations allowing STRs in all residential districts – R1, R2 and R3.
Since that recommendation was the crux of the Planning Board’s amendment, it was a no-starter for members of the Highlands Neighborhood Coalition. They adamantly believe STRs are commercial enterprises and as such aren’t allowed in at least the R1 district where commercial enterprises aren’t allowed. Soft commercial enterprises are allowed in R2 but those against STRs don’t want STRs to be allowed to continue in the R2 zone either and some say anywhere in Highlands.
Those who align themselves with Save Highlands liked the idea of STRs being allowed to continue in the residential districts, but they didn’t like the limitations assigned to each district regarding length of stay – less than 14 days in one area, a minimum of 14 days in another, etc.
In general, they voiced concerns over the ordinance’s enforceability and the economic impact of disallowing vacation rentals which according to speakers has been allowed in Highlands for about 40 years, if not longer.
Of the 29 people who spoke, 24 spoke for STRs and five spoke against. Of the 79 emails/letters received by the town, 56 were against STRs. 30 were for them and 4 weren’t totally for them, nor totally against them.
Most of the people who spoke for STRs were under retirement age; most who spoke against were older and most were permanently established in Highlands.
Derek Allen with Allen, Stahl & Kilbourne is the attorney representing Save Highlands which has filed a lawsuit against the town for disallowing STRs and he spoke first.
Allen has been a land-use attorney for 25 years and has dealt with the STR issue all over the state and acknowledged it is a difficult one.
He said Highlands, like other towns in Western North Carolina, has been a vacation spot for generations and said his group feels that the proclamation disallowing STRs effective Jan. 3, 2022 came out of the blue, was invalid and was an attack on their private property rights and the investment they’ve made in their homes.
“We think that the commissioners’ action was wrong because it was beyond their authority and the town council has said as much. We think the current UDO does not prohibit STRs in any form or fashion. We think prior town representation has confirmed that,” he said. “We think there are constitutional issues out there as well. And maybe the biggest thing, that has been talked about in the different silos that has evolved in the last couple of months is this idea of grandfathering
“To be real clear about that, there is a principle in land use about private property rights that is based in constitutionality. It says that if you are doing something on your property that is a valid authorized use and a town or a county comes in afterward and says that is now illegal, you are permitted to continue doing that. It’s called valid nonconforming use or grandfathered use. That’s what we are talking about when we talk about vesting it’s a valid nonconforming use – that’s what these folks felt like was in jeopardy.
“On the backside of the lawsuit we filed, this town hired outside counsel in Mr. Justus. He knows his stuff and I think he provided correct counsel saying you can’t disallow STRs. So, that Aug. 24 proclamation was walked back, and the lawsuit sits out there with a motion to dismiss. We just let that sit. We are letting this ordinance process play out and Mr. Justus and I talked about that, and we think that is the right thing to do,” said Allen.
Allen pointed to several areas of the ordinance with which he had concerns specifically references to commercial uses, registering STRs and vesting or grandfathering and suggested that all passages in every context in which those subjects are written should be struck.
He said that NC case law 160D-108 has already determined that vacation rentals are not commercial uses and the wording in the ordinance regarding that doesn’t change that fact.
He said NC General Statute 160 D 1207 C says registering an STR with a zoning certificate is prohibited and the current law doesn’t allow it though it is currently in the court of appeals.
“We will wait and see from the court of appeals if that stands, but we think that the current state of the law doesn’t allow that, also vested rights, referred to as valid nonconforming uses is allowed [grandfathered] by law, and that’s just what it is,” he said.
David Hagaman spoke next and out of the gate he voiced every issue spoken by subsequent speakers – the fact that people are renting out their home part-time until retirement in Highlands is possible full-time, the enforcement of existing ordinances, the economic impact of prohibiting STRs, and property rights.
“I learned in law school a phrase that applies to this situation. Bad facts make bad law. Sure, there are a small number of STR renters who make noise, who leave trash out, and understandably that annoys the neighbors. I get that totally. But those bad facts don’t require a bad law which I believe this proposed ordinance is. If renters make noise, enforce the noise laws. If they leave trash out, fine the owners. I think that this STR proposal is a drastic answer to a problem that would make bad law,” he said.
He said after reading the emailed letters from those opposing STRs it appears to him that they only care about themselves and not the other people involved.
“They don’t care about my housekeeper who broke down in tears because she is going to lose the income from cleaning houses that she now has from STRs. I don’t think they care about the workers who fix our plumbing. The retail people who sell us things in stores, many of whom will lose their jobs because of the loss of business that will probably occur if this ordinance is adopted. They certainly don’t care about me and my property rights. And the income that I receive from the STRs to maintain my house.
“These people want to turn the clock back to what they refer to as the old Highlands. They are comfortable, they’ve made it. They have a summer home here or they have a permanent home here; they are up on the ladder and now they want to pull the ladder out so no one else can get up here,” he said.
The economic loss to the town and its citizens who live and work in Highlands was repeated throughout the night – something several folks suggested the town study before making drastic changes to the ordinance.
“People want weekend rentals and I expect the negative economic impact of greatly restricting STRs in R1 and R2 could be catastrophic to the town, and the merchants concerning the loss of revenue,” said Hagaman. “Do you know that economic impact? Before you take the drastic step of adopting this very restrictive STR ordinance, you should conduct an economic impact study. You need to know the affect on the town and the merchants and the people who live here and make their living here. Anything less than that, in my opinion, would be a serious dereliction of your duties as elected officials.”
Pat Allen said real estate brokers have sold homes acknowledging rentals were allowed for years and years – a fact that was echoed throughout the hearing.
Kristy Jones Favalli with the Save Highlands group believed people crying for workforce housing were suggesting that no STRs meant there would be available workforce housing.
“STRs are being used as a scapegoat for workforce housing needs,” she said.
“This UDO will not be a step closer to creating affordable housing in Highlands. Even if every STR owner flooded the market with their property, the time has long passed that an in-town property will sell for less than $400,000. People making $15 to $20 simply will never be able to afford a house in Highlands, regardless of this UDO passing, without some sort of subsidy from the town of Highlands.
“Inflated real estate prices is also not related to STRs yet it’s another issue the UDO is supposed to correct. This is not a Highlands specific issue, it’s a nationwide issue in all desirable areas. Corporations giving the greenlight for their employees to permanently work remotely has caused an exodus from the major cities to rural towns,” said Favalli.
She said enforcement of ordinances in place is the answer, but enforcement should be unilateral and not targeted to a segment of homeowners who rent their properties.
“I have rented for years without harassment yet from the moment my property was ID’d as a rental I’ve had my exterior breakers manually shut off on two occasions which can be verified by Edward Electric, and other homeowners have had reports of their bear-proof trash cans being thrown open overnight just waiting for the bears to help themselves. We are homeowners here, too, and deserve to be protected by the same laws and ordinances that govern us and not simply targeted by them,” she said.
Kathy Smith said she was in the camp against uncontrolled growth of STRs in Highlands and blamed the Chamber of Commerce for the influx of tourists who use STRs.
“The Highlands Chamber of Commerce is a major driver in the demand for STRs. Our little town is being promoted all over this country. And our chamber is developing new events and festivals and so forth that attract people and each one of these need an STR. I know that more visitors mean more visitors for Main Street and that’s the goal of the chamber; that’s their job. But we have a conflict of interest. The residents who support a healthy community need to consider our support of the current direction of our chamber. I realize that OEI and our real estate agents promote our town nationally, too, that’s private enterprise. But I don’t think Highlands owes the wedding industry our town or our way of life.
“I think we need to let our leadership know that not all of us are in favor of developing more and more events and promoting them all over the country. Highlands has families who have been here for generations – all kinds of people from all economic backgrounds – and that’s the community that we invest our lives and hearts into. Uncontrolled growth of STRs is a threat to that. It’s not the same old game of ‘come up and rent a house for a couple of weeks.’ We are into something different here and if we aren’t careful Highlands will be a revolving door of transient weekend or week-long visitors,” she said.
David Bee owner of Highlands Vacation Rentals said the board made a knee-jerk reaction of prohibiting STRs without doing the proper due diligence for the proper fiscal impact to its decision.
“This knee-jerk reaction has created division, false accusations and hateful discourse between its citizens and neighbors. No one in Highlands area who has a STR or manages a STR was contacted for input on issues and concerns about how to make things overall better. That’s not proper due diligence. This process should take at least a year to do proper due diligence for discussion and proper legal examination.
“You have placed yourselves and others in a position of having to spend thousands of unnecessary legal dollars. You are creating an ordinance that has future legal ramifications for the town. You are creating an ordinance that takes away, the owner’s property rights. I am in favor of STRs in all residential districts within the town. They are not the detriment or negative impact as has been portrayed. I am not in favor of the removal of owners’ property rights, your’s or anyone else’s. Before making this decision, there needs to be a true diverse panel with discussion,” he said.
Alice Phillips who has managed STRs for 22 years and sells real estate said the majority of her sales are to renters who fell in love with Highlands as renters and decided to purchase a home for themselves.
“This decision has been made in haste any there needs to be additional due diligence and discussion on both the impact this will cause and the true issues that are the reason for this change. I am in favor of STRs in all of our Highlands residential districts. I have great concern about the impact of this decision on future values and marketability of the properties of Highlands,” she said.
Cal Stephens and others feel as STR owners they are being vilified.
“We are renting our place short-term. We are not faceless, nameless horrible people. We have a piece of property, we rent it and we enjoy staying in it, too. I would encourage you all to push forward with this ordinance. It recognizes our vested property rights.”
Laura Puckett said she has been coming to Highlands since she was a little girl and has been renting. She has since bought a home she rents part-time but now people are suggesting that renting shouldn’t be allowed.
“Given that rationale, wouldn’t that mean a regular rental [long-term, annual] wouldn’t be allowed because it isn’t specified as an allowed use anywhere specifically. Saying an overnight accommodation is a commercial use – well isn’t any single-family home an accommodation?”
Caroline Ragsdale who is renting her home part-time until she retires here said renting homes gives an affordable option to staying in a hotel which doesn’t always work with young children.
Scott Vuncannon who said no matter how many people come and stay in STRs Highlands will never be Gatlinburg.
“I don’t know where people get that idea – constraints just wouldn’t allow that,” he said.
Local resident and business owner Stephanie McCall agreed.
“We have rules and regulations to keep our town the way it is. We aren’t going to lose our town because of STRs. Our town is us, the people. We aren’t going to lose who we are. We have an amazing community, and we lift each other up and allowing renters in isn’t going to change that,” she said.
She also said many people buying homes to live in and to rent are doing it to make money but they are also making the area, the neighborhoods look better when they renovate.
That was an issue Michael Ackerson brought up about his property on Mt. Lori that was in massive distress.
“We invested significantly into the property, almost to the tune of $200,000. I can assure you that our neighbors on Mt. Lori are very appreciative of the improvements we’ve made to that property. I think we have made a significant contribution to Highlands with the investment we’ve made,” he said. “I hate the proposed restrictions on R1, 14-day minimum. I love the enforcement idea, for noise and trash. It’s an enforcement issue. You are moving quickly on something you don’t have the facts on. The impact study is a must. Go STRs we will fight it until the end.”
Jennifer Huff with Save Highlands said she appreciates the legally recognized nonconforming use language in the proposed ordinance and looks forward to continuing to be allowed to use her property in Highlands.
“I am a supporter of STRs but more importantly property rights. STRs owners overall are good honest people, and we want to continue to provide a place to stay for our guests who want to stay in homes, not hotels for various reasons. There has been talk that we aren’t part of this community. But many of us live here full-time and others have been coming up here for years if not generations. We have local friends and neighbors. We have a large positive economic impact in the community; our collective community,” she said.
June Wise a real estate broker who rents her home about six-months out of the year, said renters are responsible for 9.75% taxes which go to the state with 3% of that coming back to Macon County.
“These renters are contributing in that way, and they flood these beautiful little boutiques and restaurants. I would really like to know what in the world happened that here we all now sit. If there were problems with renters, why wasn’t something done at the time? if you have a problem, deal with it,” she said.
However, local full-time resident Frieda Bennett said Highlanders don’t complain and she can’t express the changes that have taken place.
“We have people on our hill that have lived here for decades who have now decided that the quality of life just isn’t what they want to experience. Are we going to punish the people who obey the law, by not turning their homes into STRs? And according to the proposed ordinance, going forward, you can’t convert a home into STR but a neighbor can transfer ownership of the STR property?” she asked. “Someone who didn’t obey the ordinance would be rewarded while those who did conform to the ordinances would be punished,” said Bennett.
Local full-time resident and STR owner Jerry Moore said more research is needed before drastic changes are made that will change some people’s lives significantly. He said there are a lot of unanswered questions.
“We don’t even know exactly how many STRs we have in the town limits. How many are owned by corporations? How many individuals own one STR and rent it out and come up here for a short period of time so they can enjoy our community just like we do who live here year-round. How many complaints have we had concerning STRs? How many ordinance violations have we issued to people who own a STR. Have we fined these people? Have we enforced our current ordinances to the fullest extent before we make any drastic changes on something that has been going on for some time in this community? This is problematic. I would propose occupancy limits are enforced; parking enforced, trash and noise, too. Call police. Fine the homeowners. Keep it simple. This current ordinance isn’t simple, it’s going to be impossible to enforce,” he said.
In closing, he reminded the audience that STRs aren’t all bad.
“They become your neighbor when they come … you don’t like them, they leave. You can’t always get that with your full-time neighbors!”
Local full-time resident and business owner Jeannie Chambers said STRs should be allowed in any residential zone in Highlands and she disagreed with the ordinance regarding minimum and maximum stays.
But full-time resident and business owner Gary Bogan said people who are for STRs – most of the people in the audience Thursday night – have never lived next door to one.
“Two doors down from us, the house sold two years ago. It’s a 3-bedroom house. They put 12 beds in it. They have parties every weekend there. It’s ridiculous. A corporation just bought five lots on Sherwood Forest. They are building STRs. They’ve made it known already. That’s just not right.”
But full-time local businessman David Bock said he lives next door to a STR and had a bad experience only once.
“I called David Bee and he was out there at 11:30 and solved that problem immediately and that was one time over the last 5-6 years. STRs are important to the town,” he said. “They support our businesses. I hope the board will work to help bring this town back together because I think this was allowed to get out of hand with neighbors against neighbors and that upsets me more than anything.”
Gary Hester who drove up from Orlando to attend the meeting said he has owned his R1 property since 1980 and rents it when he can’t be in Highlands.
“There aren’t enough hotel rooms available for all the tourists who visit Highlands so STRs help keep the Highlands economy growing. I can’t believe you are considering cancelling or restricting our guests or our livelihood. Please allow us to continue our STRs,” he said.
Andrew Kaiser who said he is 10 years away from retirement said he rents his house when he can’t use it and there haven’t been any complaints.
“So this doesn’t seem like something that is screaming to be solved,” he said.
Charles Nalbone, who heads the Highlands Neighborhood Coalition, spoke for the group at the beginning and end of the meeting. He zoned in on what the coalition has based its case on – their view that STRs are a commercial activity and commercial activity isn’t allowed in the residential districts in any form.
He consistently referred to STR owners as investors and business people, who own, operate and profit from STRs in single family neighborhoods and who want to make as much money as possible.
“Remember, overnight accommodations are defined in the UDO as a commercial use. Tourist homes, are a commercial use, bed and breakfasts are a commerial use, hotels and motels are a commercial use and even though it has been Highlands’ long-term policy that these commercial activities create an intensity of use that is not compatible with our single-family neighborhoods, the Planning Board’s proposal opens up every single one of Highlands neighborhoods to these commercial activities.”
But Jerry Moore brought up an interesting point while questioning business limitations in the various residential zones.
“Will you be able to be an Ebay seller in R2? Can you sell stuff out of your home? Is that allowed? That’s commercial activity. Can you run an art studio out of your home in R1? Can you run a construction company out of your home? What differentiates that type of biz from STRs?
“I think we have to ask ourselves these questions because if we go to court, those are the analogies that are going to be brought up. How are you going to enforce this is the big question,” said Moore.
Nalbone said all his group is asking is that the long-term, close to 50-year prohibition on commercial activity and overnight accommodations in residential districts be maintained and enforced.
“One of the arguments hear from STR investors, is that the UDO doesn’t specifically say STR. Is doesn’t have to. STRs are overnight accommodations. Overnight accommodations are designated as a commercial use. Any claim that a STR isn’t an overnight accommodation is simply absurd,” said Nalbone.
Nalbone said allowing vested right status of STR investors, who have been operating overnight accommodations in Highlands residential neighborhoods rewards unlawful behavior and punishes Highlands’ law-abiding homeowners. In addition, he said to grandfather this use would require that it was previously legal.
“It is not. Overnight accommodations cannot be grandfathered,” he said.
Assuming the the only issue that elected Commissioners Amy Patterson and Eric Pierson and Mayor Pat Taylor was their alleged stance against STRs, Nalbone said the residents’ and voters’ opposition to STRs was clearly expressed in the election results where the candidates won by and overwhelming landslide majority.
He also said the community’s position was also clearly expressed in the response to a Comprehensive Plan question where he said more than 62% of respondents expressed opposition to STRs.
But Matt Bunny who spoke in favor of STRs had another view.
“Regarding the Comprehensive Plan, the question wasn’t ‘are you against STRs?’ it was, ‘Are you concerned about STRs.’ 62% answered that they were concerned. There is a big difference between being against something and being concerned about it,” he said.
However, Nalbone was persistent.
“At the end of the day, what STR investors are doing is running hotels, motels, tourist homes, overnight accommodations, which in fact are a commercial business. Which for greater than 50 years have been prohibited in single-family neighborhoods. Our simple request is that we maintain that prohibition and we enforce the existing rules against these kinds of businesses in our single-family neighborhoods.”
Mayor Taylor said the board will begin deliberating about the issue.
Pictured at the top of the article the Community Building filled up quickly as the Public Hearing was about to start last week.
By Kim Lewicki, Highlands Newspaper