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Ordinance to cap short-term rental licenses on Folly Beach fails

Image of empty rental property kitchen, magnolia painted walls, tiled flooring, oven, white cupboards with under lighting

Photo: Getty Images

FOLLY BEACH, S.C. (WCSC) - The ordinance to cap the number of short-term rental licenses given out on Folly Beach has failed in city council.

The motion was brought up after a petition was signed by more than 450 residents on the barrier island. The measure will now go to a referendum vote, in which the city will work with the Charleston County Board of Elections to decide when the special election will be.

The vote is now in the hands of permanent Folly Beach residents. For now, the council voted to approve the temporary pause on handing out short-term rental licenses.

“We, the Folly Beach Resident community, is pleased that the City Council heard our
478 voices via the petition and decided tonight to move the decision to CAP Investment Short Term
Rentals to an Island wide referendum so all voting residents can have their voices heard on this
very important decision. This is a crucial decision to ensure the fair balance between
Residents, Long-Term Rentals and Investment Short-Term rentals and we are pleased
it will be made by a direct vote by the voting residents on the island.
Secondly, we are relieved that the Council voted to extend the Island wide Moratorium on issuing
new short-term rental licenses from mid-January forward for 3 more months to allow enough
time for the Referendum to be held.
The Folly Beach Residents Association will continue being a source of verified facts and information
for this issue on their Facebook page “Folly Beach Residents Association”. We will continue
doing all we can to ensure our residents can continue living their best lives on Folly in a fun, funky, vibrant, livable community. "
Ann Peets, Folly Beach Residents Association

In June, the city council voted against the mayor’s proposed 800 short-term rental cap. But a petition signed by more than 450 residents is bringing the topic back to the city council.

Under South Carolina Law, a petition signed by 15% of the voting population and verified by the county has to be considered by city council. The signatures on the Save Folly’s Future petition represent about 25% of the island. City Council can approve the ordinance in the petition or make amendments and put it to a city-wide citizen vote.

Ann Peets is one of the more than 450 residents who signed the petition.

“There are a whole pile of residents that are now seeing that the balance is being upset. Instead of leaving a place for long-term renters, short-term renters and residents and kind of keeping that equal - it’s really started to tip the balance around investment, short-term rentals. People are knocking down homes, basically buying them as investment, short-term rentals and putting in so many people. So that got me really concerned and that’s why I joined the Folly Beach Residents Association, as well as sign the petition,” Peets says.

The petition seeks to limit investment in short-term rental properties, or second homes where people don’t live full time, to 800 on the island at one time.

As of Oct. 18, Folly Beach confirmed the city issued 1,112 short term rentals for the 2022 business license year.

Peets is a member of the Folly Resident’s Association group online where people share and discuss topics affecting the town.

“The reality of the petition is really that it’s capping investment short-term rentals, not owner short-term rentals, to 800. And that’s a third of the island. And that doesn’t mean that it can’t grow later there. There’s the possibility to do amendments to the petition once it’s passed, but it’s really an attempt to cap the short-term rentals to a reasonable level. Start with that balance and then be able to figure out where we can go from there,” Peets says.

People presented the citizen petition from Save Folly’s Future on Oct. 12 to the city council. Since then, a group calling themselves Folly United has spoken out against the moratorium and a cap on short-term rentals.

Tom Powers has a second home on Folly and says he has been a resident on the island a few times in his life. He is opposed to officially capping how many investments short-term rentals are allowed.

“It does have good goals of livability and good community and I feel like our group - we’re in alignment with 80 to 90% of those goals. Where we do feel like technically this is a bad step is it seeks to limit the number of licenses down to a cap of 800 licenses, and it’s got some caveats for full-time people and things like that. But it will have the effect of making it harder for a second homeowner to know in the future if they would be able to have the ability to short-term rent their property,” Powers says.

Powers, along with others including full-time Folly Resident and short-term rental owner Christy Bickle, are collecting signatures against the moratorium and cap.

In September, the council passed new policies short term rentals must meet before they are approved for a license. Items include presenting a parking plan, a limit of 25 people to a rental at a time and paying an application fee. There is also a three-strike system where if a property is found in violation of local laws or short-term rental requirements three times within one year they could lose their license. The city is planning to hire four enforcement officers to manage the department.

Powers says these rules haven’t had enough time to take effect before discussing the need for a cap and that’s why he opposes the moratorium and cap.

“It hasn’t had a chance to really see how that’s going to correct these livability problems. In a nutshell, our point would be let’s let the laws that are now on the books have a chance to take effect and do their thing before we pass yet more sweeping and pretty dramatic new laws,” Powers says.

Owners with a short-term rental license can renew it each year. But if ownership changes and the new owner is not primarily living at the property, they would have to apply for an investment short-term rental and potentially join the waiting list, if there is one.

“Where we very specifically feel and a lot of other we’ve had hundreds of people sign our petition, they don’t like that overreach because what it effectively creates is a scenario where if you were to leave your property to your children, they wouldn’t be guaranteed and have the ability to easily get a short term rental license as well in a timely manner,” Powers says.

Brickle owns a home and a second property she rents short-term next door.

“If you are a homeowner in the city of Folly Beach or you are a business license holder in the city of Folly Beach, you need to get familiar with this issue. Because what becomes of the referendum vote will affect property values here. So, let’s get out here citizens and figure out what’s happening,” Brickle says.

The Save Folly’s Future petition does not have a stance on the moratorium and the writer has expressed support for a citizen vote on the matter.

Peets says it’s important for people to read the ordinance and figure out how it will affect them.

“What we’re trying to curb is not the fact that investors can make money on this island. We’re all fine with that. What we feel like is if they’re allowed to run rampant and they have a majority, 70-80% become short-term rentals, the sense of community is lost. It’s not just the loss of residents, but it’s actually no one here to do a Christmas parade to do the flip flop drop, to have events in the park and to really keep that community flow going,” Peets says.

You can read the petition ordinance and definitions for it, here.

You can contact those with concerns gathering signatures, here.

Copyright 2022 WCSC. All rights reserved.

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