As a resident of Isle of Palms for 30 years, I support the referendum to cap investment short-term rental licenses at 1,600, which is 35% of dwelling units, and no limits to legal resident short-term rental licenses (LRSTRLs). If the referendum passes, and there are more than 1,600 ISTRLs, the city can still issue an ISTRL so investors will not lose their license, provided they apply within the 60-day grace period. ISTRLs and LRSTRLs can also be transferred to eligible family members.
Two opinion articles appeared recently encouraging voters to oppose the cap. The first was written by Terri Haack in The Island Eye News. Haack, senior vice president of Lowe and a shareholder, manages short-term rentals in Wild Dunes. She has residences in Crested Butte, Colorado, and California. The second article appeared in social media posts and was written on behalf of the IOP Chamber of Commerce. All members of the IOP Chamber have ties to real estate and hospitality. Clearly, both Haack and the Chamber have skin in the game.
In their social media posts, the IOP Chamber expressed concern about the impact of a cap on property values, citing “research” from an article in the Harvard Business Review. During my 30 years as an MUSC professor, I engaged in research, published research, critiqued research related to my teaching and served as a peer reviewer for professional journals; thus, I read the article.
In my critique of the article, I immediately noticed that it was not a research article but an opinion piece. There was no review of literature or description of methods and statistical procedures used to analyze data and reach conclusions. A search of the authors’ credentials revealed all had ties to the real estate industry, and thus, a financial interest. A true research article is subjected to a rigorous peer review process before publication and requires the authors to disclose any financial conflicts of interest.
The IOP Chamber article also posted selected statistics regarding the change in property values in 2023 compared to 2022 YTD using the market report for the Charleston Trident Area. However, important information was missing from that table. In the table below, you will find the location, dwelling type, % change in average sales price, and type of cap.
Market Reports, Fast Stats. Charleston Trident Area. Available at: https://www.charlestonrealtors.com/marketreports/ Accessed August 25, 2023.
Areas with the most restrictive STR regulations – Charleston, Sullivan’s Island and Mount Pleasant – have not suffered from STR regulation. But what about Folly Beach? The Chamber failed to mention that townhome/condo sales average prices on Folly increased by 20.2%.
Proponents of no cap tell us we will lose the property tax benefits from STRs. To be clear, there will be 1,600 available ISTRLs, plus those that are grandfathered, and LRSTRLs, which means no loss of revenue. That benefit will still be there. The purpose of the referendum is to establish a reasonable cap on ISTRLs, not eliminate them.
Although the no cap proponents have a lot to say about revenues generated for the IOP, no information has been provided about the costs to the city for public services and infrastructure. Plus, over $1 million of ATAX monies are skimmed off the top for “marketing” by the Charleston Visitors Bureau.
We need reasonable limits on ISTRLs so we don’t lose our sense of community. The city of Charleston STR ordinance stated it best: “Absent appropriate controls on the number and manner and places of operation of short term rentals, neighborhoods stand to be harmed by undue commercialization and disruption to the primary and overarching purpose of a neighborhood being first and foremost a residential community, where people actually live, not a place of transient occupancy.”1
- An Ordnance. City of Charleston. Available at: https://www.charleston-sc.gov/DocumentCenter/View/18216/STR-Ordinance-As-Amended-Approved-2018-043?bidId=. Accessed August 25,2023
