Highlands prepares to finalize STR issue

Proposed ordinances for Short-term Rentals as well as legal ramifications of pursuing those proposals were briefly discussed at last Thursday’s Town Board meeting.

Amendments to the Planning Board’s original STR ordinance, which was the subject of the Feb. 24 Public Hearing, was sent to the town by SAVE Highlands the first week in March. That letter, which had not been acknowledged until last month was briefly discussed.

SAVE Highlands’ legal counsel had gone over the Planning Board’s proposed January ordinance and eliminated and changed what it thought was prudent for those who want STRs to continue in some form in Highlands.

Evidently, Highlands’ legal counsel never sent the proposal on to the board of commissioners and so until they learned so in the press, they were unaware of the correspondence.

As it turned out, the Planning Board’s January ordinance was nixed by the Town Board so comments about it would likely have been disregarded anyway, but in any case, the document was submitted as part of the agenda Thursday night.

Town Manager Josh Ward said the document in hand had been properly formatted by SAVE Highlands legal counsel and resubmitted showing verbiage in black, red and blue ink. The red ink was the Planning Boards’ ordinance additions and the blue ink was SAVE Highlands suggestions. The black ink was the part of the ordinance originally submitted by the Town Board after working with previous counsel represented by Craig Justus.

There was no discussion about the proposal because the town has since presented two of its own proposals. 

One proposal disallows STRs in R1 and R2 but allows Homestays in those residential districts where the owner stays on the property. All rentals are allowed in R3 and the business districts.

The other ordinance allows everyone in town to rent their homes regardless of the zone for two years at which point the use is amortized – ceases for evermore, but just in R1 and R2.

This amortization ordinance was discussed in Closed Session Thursday night with Attorney Bob Hagemann from the town’s new law firm, Poyner and Spruill.

Last week, The Institute of Justice wrote the town a letter outlining reasons why the town shouldn’t pursue amortization citing previous cases and legal fees the town would be responsible for should it lose its case. (See Highlands Newspaper Aug. 18 edition.)

Commissioner Amy Patterson asked why the issue couldn’t be discussed in Open Session, but Hagemann said “because he had been requested to give his legal opinion in response to the letter the town received from the Institute of Justice regarding the amortization option.”

Friday, Mayor Pat Taylor said no action was taken in the Closed Session regarding that issue. 

“We were advised that we have legal options and defense, and we are evaluating the cost of possibly going to court over this option. Attorney fees and court costs are something we are very aware of,” he said.

Meanwhile, the Highlands Neighborhood Coalition, which would like STRs to cease in all single-family residential districts in Highlands, also sent a letter to the board of commissioners Thursday outlining changes it thought needed to be made to the amortization proposal, which is the only proposal it considers acceptable.

The letter was sent by Cathy Henson, Tom Coley, Carol Gable, Lila Howland and James Worrell of the Highlands Neighborhood Coalition. 

“We believe there are ample options for STRs in appropriate zoning districts other than those zoned single-family residential,” reads the letter.

Those zoning districts would be R3 (multi-family), B1, B2, B3 and B4 (B-Business)

“We strongly support the Town adopting the amortization amendment which ultimately will eliminate STRs from some neighborhoods in Highlands while at the same time allowing STRs in multiple other zoning districts. We encourage the Board of Commissioners to adopt that amendment,” reads the letter.

However, the coalition said it has issues with the proposed two-year period during which homeowners could rent their homes as STRs until the use is amortized and thereby cease.

“The current proposal appears to permit unrestricted expansion of STR activity throughout all residential zoning districts of Highlands during the amortization period. This is a dangerous proposal – in the event a court decides that the Town cannot amortize STRs, but must grandfather them, the Town could find itself in two years’ time with several hundred additional STRs within its limits – this would permanently destroy the Town’s residential zones 

“If the Town considers this ill-advised option, at least clarify that at some point in time no new STR activity would be allowed in single-family residential neighborhoods,” read the letter. 

The Coalition also has issues with the new Homestay category the board of commissioners proposed in its other proposal that doesn’t allow STRs in R1 or R2 but does allow Homestays – where the owner must be on the property.

“This is yet another commercial lodging activity which for the first time in the history of Highlands zoning regulation expands commercial lodging activity into every residential zoning district, including R-1, which until this proposal was free of all commercial activities, including customary home occupations,” reads the letter. 

However, at a recent Planning Board meeting it should be noted that Town Attorney Jay Coward said the courts have ruled that renting homes in residential districts in any form are not commercial activities.

 “Our opinion is that no STRs (including Homestays) should be allowed in R-1 and R-2 but should be allowed in other districts,” reads the letter.

Meanwhile, there is a public hearing on the Planning Board’s most recent ordinance proposal on Thursday, Aug. 25 at 5 p.m. in the Community Building. 

The Planning Board’s new proposal allows STRs in R1 and R2 for a minimum of seven days and gives a one-year grace period for those property owners who have contracts in the pipeline for less than seven days. After that one-year grace period renting for less than seven days wouldn’t be allowed.

People can sign up in advance to speak at the Aug. 25 Public Hearing for three minutes or give their time to a group representative or they can email comments to gibby.shaheen@highlandsnc.org

In all cases people must identify themselves and be polite without outbursts of any kind – clapping, talking, etc. – or be escorted out.

The mayor said there won’t be any decision made at the Public Hearing. 

Commissioner Amy Patterson suggested moving the STR deliberation process along so it can come to some resolution. 

“This has been going on a long time. We just need to go ahead and do it,” she said.

To that end, a worksession is set for Tuesday, Aug 30 at 6 p.m. with the understanding that there may be another as soon as Thursday, Sept. 1.

Commissioners acknowledged that it has three ordinance proposals – its two and the Planning Board’s most recent proposal.

“But we don’t have to follow the Planning Board’s recommendations,” said Commissioner Brian Stiehler.

Commissioner Marc Hehn said the board also has comments from both sides – previously from SAVE Highlands and Thursday’s Highlands Neighborhood Coalition submission. He also said SAVE Highlands may be submitting comments about the Planning Board’s latest ordinance proposal, as it did with the Planning Board’s January proposed ordinance.

By Kim Lewicki, Highlands Newspaper

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