Two versions of the amended Unified Development Ordinance as it pertains to Short-term Rentals were briefly discussed at the Special Meeting Thursday, July 14, prior to them being submitted to the Planning Board.
The Planning Board meeting is tonight at 5:30 p.m. in the Community Building.
According to Attorney Bob Hagemann with Poyner Spruill which is now the town’s legal counsel, there is plenty of time for both versions to be “revised, refined and changed.”
The first version discussed was basically the Town Board’s March ordinance with minor refinements, said Hagemann.
Minor tweaks include limiting the number of unrelated occupants to five instead of three; the septic system capacity must be documented in an improvement plan rather than by a licensed professional; for properties on the town sewer, the number of occupants shall not exceed 12; all existing contracts prior to adoption must be honored by the town; if cited for violations three times, the required STR Zoning Compliance Permit will be revoked for one year but it won’t cost the owner the right to continue the nonconforming use when the year is up.
No new STRs would be allowed in R1 or R2 but for those with current STRs in R1 and R2 a non-conforming use permit must be submitted to the Planning Director by Jan. 1, 2023, satisfying all the STR Rental Zoning Compliance requirements including tax records and proof of intensification.
The second version takes a significantly different approach to the regulation of STRs.
“It does away with permitting completely for STRs including permitted by right subject to certain limitations in R3 and in the business districts,” said Hagemann. “In R1 and R2, there is no permit requirement for STRs and no prohibition for two years.”
In other words, STRs are allowed in R1 and R2 without a permit, without registration and regardless of previous use as a STR, but after two years – or whatever time limit the Town Board fixes to the ordinance – STRs in R1 and R2 would cease completely.
“The date in the draft is Sept. 1, but that depends on the date of adoption,” said Hagemann. “But this establishes a level playing field for all property owners in R1 and R2. They can choose to use their properties for STRs as frequently or as infrequently as they choose. But after two years, or the time the council chooses, the STR use would cease.”
Hagemann said version two is based on amortization which amounts to the elimination of a nonconforming use after a determined period of time.
In 1977 the Supreme Court, subjective to the appeal courts’ decision, upheld the concept of amortization, agreeing on the issue of pre-emption.
“There is the likelihood that we will end up in litigation over that limitation,” said Hagemann. “There is a high amount of interest in this issue and there are obviously two different viewpoints about this and it’s not unusual for people who are disappointed or who disagree to consider legal options to challenge it.”
Hagemann said the Institute for Justice is constitutionally against amortization regarding STRs and there are those who have a strong philosophical and legal objection to the concept.
Commissioner Hehn was worried the town would be liable for loss of income if amortization becomes the law, but Hageman said there is a provision in the law that protects litigants against the enforcement of the ordinance while it is in the court system and it would likely take two years to get a final decision.
“In the event the board goes that route, and in the event of litigation, no one would be forced to shut down their STR so there would be no damages because they can operate while the case is being litigated,” he said.
The board voted 4-1 to send the two versions to the Planning Board, which will meet tonight at 5:30 p.m.
Commissioner Hehn voted against sending them because he didn’t like aspects of both.
The board then voted to set a public hearing for Thursday, Aug. 25 to hear the Planning Board’s recommendations. The board hopes after two Planning Board meetings – July 25 and Aug. 22 – recommendations will be ready.
But if the Planning Board needs more time, the Public Hearing can be re-scheduled for a later date.
The vote was 4-1 with Commissioner Hehn voting “no.”
“They might need more time and I don’t think we should rush this because when we rush things we get into trouble,” he said. “We should let them go; let them take whatever time they need; talk to anyone they want to. When we rush, we make really big mistakes.”
He also asked Attorney Jay Coward if the town could ask SAVE Highlands to participate in a mediation “before this gets out of hand.”
Coward said North Carolina law requires all cases to be mediated prior to going to court so that would automatically happen.
“We should ask for mediation now,” said Hehn.
After the votes were taken Commissioner John Dotson said he had “a number of concerns about both proposals” but he didn’t want to discuss them that night.
“I don’t know that tonight is the time. Tonight, is simply an opportunity to look at this and pass it on to the Planning Board for their hashing through it, but I would anticipate some changes somewhere along the line on a number of items I have questions on,” he said.
Both versions of the UDO as it relates to STRs are posted on the town website HERE.
By Kim Lewicki, Highlands Newspaper