Aug. 31 marked one year the Town of Highlands has been navigating its short-term rental ordinance and the fallout from its Aug. 24, 2021 decision to prohibit STRs in the R1 zoning districts effective Jan. 3, 2022.
A lot has happened since then.
That Aug. 24 decision was rescinded; attorneys representing three sides – those of the Town of Highlands, SAVE Highlands and the Highlands Neighborhood Coalition have been hired; court cases regarding STRs in the state have been decided in favor of STR homeowners establishing among other things that the renting of residential units is not a commercial enterprise; proposed Town of Highlands ordinances that were pounded out by committees and the Planning Board and which were the subject of two public hearings have either been nixed or are in the process of being considered, and the Town Board and staff have been deposed by Save Highlands.
Now, a year after this all started, attorney Derek Allen with Allen, Stahl and Kilbourne which represents SAVE Highlands – the group that wants STRs to continue to be permitted – has been busy with “saving” STRs in Highlands its goal.
The firm sent the town a letter explaining its position thus far and what it sees happening (see Letters page 4), has filed a motion for the reimbursement of attorneys’ fees up until the town rescinded the initial August 2021 vote, and deposed Mayor Pat Taylor, Commissioners, John Dotson, Amy Patterson, Eric Pierson and Brian Stiehler as well at Town Manager Josh Ward and Town Planner Michael Mathis.
“Commissioners Patterson, Stiehler, Dotson, Pierson and I have been ordered by the Save Highlands attorney to be deposed. The attorneys representing the Town of Highlands will contact Mr. Allen, the attorney representing Save Highlands, to address and handle that request,” emailed Mayor Taylor. “The four commissioners and I previously provided emails and other communications requested by Save Highlands. Commissioner Hehn is not a part of the deposition request, nor was he requested to provide emails and communications.”
It’s assumed Commissioner Marc Hehn wasn’t deposed because for a year he has been the lone descending vote regarding passing ordinances that prohibit STRs in some form or amortizing them until he said more research and collaboration between parties is done.
According to Allen, Stahl & Kilbourne, the reimbursement of attorney fees for the period of time of Aug. 24, 2021 until the initial ruling was rescinded, is a matter of law pursuant to N.C. Gen. Stat. S 6-21.7. The statute mandates an award of attorneys’ fees to a party who successfully challenges a municipality’s action. The language of the statute is explicit:
“In any action in which a city or county is a party, upon a finding by the court that the city or county violated a statute or case law setting forth unambiguous limits on its authority, the court shall award reasonable attorneys’ fees and costs to the party who successfully challenged the city’s or county’s action.”
According to the motion, the mandatory attorney fee provision applies equally to success in litigation and when a town later rescinds its actions in response to a legal challenge.
The motion contends, “that at its meeting on August 24, 2021, the Town of Highlands Board of Commissioners voted to interpret its Unified Development Ordinance (UDO) as prohibiting short-term vacation rentals and directed the Town staff to start enforcing the UDO as prohibiting short-term vacation rentals in residential districts beginning January 1, 2022 (the August 24 vote).
“On September 6, 2021, the Town published a letter written from its attorney clarifying that the Board interpreted the UDO to prohibit short-term vacation rentals only in the R-1 zoning district and confirming that enforcement would begin January 1, 2022, against those who owned a vacation rental in the R-1 zoning district,” reads the motion.
Attorney Allen agrees that the Town Board of Highlands is a governing board and is allowed to make legislative decisions as defined by NC Gen. Stat. S 160D-102(19) but he contends that the Aug. 24, 2021 vote was not a legislative decision but rather an administrative decision as defined by NC Gen. Sta. S 160D-102(1)
The motion further says “that Section 32.1 of the UDO only confers authority on the Board to make amendments to “the adopted Land Use Plan. ..the text of [the UDO, and…the zoning map.” The UDO also confers authority on the Board to “appoint other boards and commissioners.”
However, Allen contends that the UDO does not authorize the Board to make administrative decisions, enforce the UDO, or interpret the UDO, contends Allen.
“The UDO confers sole authority on the “Planning and Development Director,” a Town employee, to administer, enforce, and interpret the UDO. Section 4.1.1 of the UDO specifically states that ‘the Planning and Development Director generally shall make all interpretations of [the UDO].’ The UDO then lays out a procedure that affords a process for contesting the interpretation that ends at the Board of Adjustment. The Board plays no role in this interpretation process,” reads the motion.
“On October 13, 2021, Plaintiffs filed this instant action alleging, among other things, that the August 24 vote was unconstitutional and exceeded the authority of the Board (the Complaint or the Lawsuit). The Complaint prayed that the Court, among other things, declare that the Board exceeded its authority in the August 24 vote, declare null and void and vacate the August 24 vote, enjoin the Town from enforcing the UDO as prohibiting short-term vacation rentals and reimburse attorneys’ fees and costs.
“On October 21, 2021, and in response to the Complaint, the Board voted to rescind the August 24 vote. This vote gave Plaintiffs the primary prayer for relief they sought from the Court, i.e. the rescission of the August 24 vote.”
The motion goes on to say that “The Town hired an attorney with expertise in zoning law, Craig Justus, to draft a new ordinance regulating short-term vacation rentals. He thereafter drafted such an ordinance and presented it to the Planning Board for consideration in late November, 2021.
“In an October 26, 2021, email from Mr. Justus to Derek Allen, the attorney for Plaintiffs in this matter, Mr. Justus acknowledged that the Board acted without authority in its August 24 vote when he said, “[k]eep in mind that the Commissioners are not delegated responsibility to interpret or enforce; that is the responsibility of the Town’s zoning enforcement officer. The Town zoning enforcement officer has not made [sic] any final determinations. The action taken by vote on August 24 was rescinded.”
“The August 24 vote was in violation of a statute and case law that sets forth unambiguous limits on the Town’s authority,” reads the motion.
Plaintiffs successfully challenged the August 24 vote and have moved for reimbursement
Meanwhile, the Town Board held a worksession based on the Aug. 25, 2022 public hearing comments and the three proposed ordinances it has in its possession – one from the Planning Board and two of its own creation.
The Board will discuss the proposed STR amendments at a Special Meeting tonight at 7 p.m. in the Community Building.
By Kim Lewicki, Highlands Newspaper