Task Force Report Pres eserv rvin ing ou our Neig - - PowerPoint PPT Presentation

Task Force Report

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• ur Neig

eighborhoods. Ba Bala lancin ing ou

• ur Tou
• urism

Economy August 27, 2019

Who We Are

➢ Beaufort Area Hospitality Association was formed in 2018 to serve as a voice and an advocate for the local hospitality industry north of the Broad. ➢ A 501(c)6 not for profit corporation, BAHA’s Mission is to cultivate and unify the greater Beaufort hospitality industry to ensure a healthy and vibrant future.

Why we are here

➢ In March 2019, BAHA Lodging Partners identified two critical concerns impacting the traditional lodging market - fluctuations in the room night and securing and sustaining a ready workforce. ➢ In March, BAHA established a task force to look further into the concerns. ➢ Over a two-month process, the Task Force identified and discussed various factors impacting the local lodging industry – from changes in the tourism market, to marketing, to weather, to workforce. ➢ Out of this process, the task force identified that the major change occurring in the local market since 2016 has been the rapid growth of the short-term rental market north of the Broad.

How we got here

➢ Vacation Rentals have been around for many years, but the concept of short-term rentals as we know it today, is still a relatively new phenomenon. And, in many cases, current codes and zoning regulations have yet to evolve to meet the phenomenon. ➢ In 2014, AirDNA listed only 1400 shor

• rt-term ren

entals ls in the state of South Carolina, today that number has grown to over 41,0 ,000. ➢ In 2017, Bowen National Research in a report on Housing Needs for Beaufort County identified almost 15 15,0 ,000 00 vacation homes in Beaufort County – a number they derived from the 2010 Census. ➢ As we began to study the phenomenon, we realized that the impacts were much larger than just the traditional lodging industry and hospitality market and have repercussions for our neighborhoods, workforce, housing and the

• verall health of the economy.

How we got here

Data derived from AirDNA and the Greater Beaufort-Port Royal- CVB.

➢ Short-term rental listings have grown significantly in Northern Beaufort County from 243 243 in 2017, to 1149 1149 as of July 2019. ➢ Port Royal 34 34 in 2017 to 99 99 in 2019, ➢ City of Beaufort from 62 62 to to 106 106 du durin ing the same same tim imeframe. ➢ This rapid growth has created an imbalance in the lodging market that is leading to hesitancy to move forward with development of new rooms in upper-end traditional lodging and limiting the ability of existing lodging to expand or improve.

243 243 62 62 34 34 1149 1149 106 106 99 99

200 400 600 800 1000 1200 1400 NOR NORTHERN BEAUFORT COUNTY CITY OF F BEAUFORT POR PORT ROYAL

2017 2019

Sho Short-Term Rental Gr Growth Nor

• rth

th of

• f the Br

Broa

• ad

How we got here

➢ In response to this rapid growth, both the Town of Port Royal and Beaufort County Council formed task forces in 2019 to take a closer look at short-term rentals and to recommend steps to address any concerns. ➢ Both Task Force recommendations are currently under review. ➢ The City of Beaufort proactively addressed the growth in 2016 with the formation of a task force to address citizen concerns: ➢ Based on the task force’s efforts, the City adopted an ordinance in 2017 to regulate short-term rentals with the intent to periodically review the

• rdinance and the growth of the short-term rental market.

➢ In 2018, they further strengthened their efforts by contracting with Host Compliance to track and manage short-term rentals in the market. ➢ At that time they also enacted a $1000 fine for short-term rentals who were operating without a City Business license.

How we got here

➢ The City of Beaufort’s zoning defines a short-term rental as a commercial transient lodging use. ➢ The short-term rental ordinance further defines short-term rentals as rental

• f a whole house, a room within a house, a rental of a carriage house or an

accessory dwelling unit, for less that 30 days. Permitted rentals allow for primary dwelling, accessory dwelling, portion of primary dwelling and rental

• f a boat in an approved marina.

The Ordinance also: ➢ Set a minimum stay of 2 nights ➢ Placed a cap on percentage of short-term rental units per City of Beaufort’s Neighborhood Map zoned T-3-S, T3-N, and/or T4-HN ➢ Regulated collection of Business License and Accommodations Tax fees

How we got here

➢ The City of Beaufort Ordinance also set forth specific requirements for ➢ Parking, rental agreements, property management plan, signage, and mon

• nitored fir

fire ala larms, ➢ Safety in inspections prior to approval of a business license.

➢Opportunitie ies –

➢ Incl Include owner-occupied sho short-term ren entals in in the Neig eighborhood Cap Cap; ➢ Include those str tructures on

• n the City’s Vacant and Abandoned Str

tructures Lis ist that ar are bein being reh ehabbed as as shor short-term rentals, in in the Neig eighborhood Cap Cap, an and ➢ Pursue a change in in the state statutes to to include owner-occupie ied short-term rentals ls, that consis ist of

• f le

less than 6 sle leeping rooms, contained on

• n the same

pr premis ises, in in coll llection of

• f the St

State Sale Sales Tax or

• r the local Acc

ccommodations Tax; ➢ Pursue a change in in Building Codes to to recogniz ize residential str tructures with sho short-term rentals ls as as com

• mmercia

ial transie ient lod

• dging use

uses.

➢ The Impacts of short-term rentals stretch beyond the traditional hospitality market and have repercussions for neighborhoods, workforce, housing and the overall health of the economy. ➢ Understanding all of the impacts is key to understanding the issues and challenges facing community.

Wor

• rkforce

Ho Housin ing

Work

• rkfor
• rce

Loc Local Economy

Trad adit itio ional l Lodg Lodgin ing Ne Neig ighbor

• r-

ho hood

• ds

Sho Short- Term Ren ental al Mar arket

Understanding the impacts

Ne Neig ighbor

• rhood Imp

mpacts Co Community Visio

ion

Par arkin ing Incr ncreasedTraffic ic Cri Crime Co Conc ncentratio ion En Enforcement Ac Accountabil ilit ity and and Man anagement of

• f sites

Li Licensin ing/Taxin

ing

Man Managin ing Grow

• wth

Mo Moni nitor

• rin

ing of STR

Neighborhood Impacts

➢ The City of Beaufort’s task force, identified neig eighborhood im impacts as a major concern along with en enforcement, and ➢ Expressed concern about how short-term rentals “fit fit in into th the e community’s vision for its present and future,” and ➢ Recognized that this “new and rapidly evolving phenomenon” impact should be reviewed periodically, as a part of the City’s annual planning procedures.

Information from the City Task Force on Short-term Rentals – 1/17

➢ In forming their task force, Bea Beaufort Cou County Cou Council specifically raised concerns about ne neig ighborhood impacts in the unincorporated areas of the county – identifying traffic ic, , no noise ise, park parking, g, sa safety and ad adverse se impacts to to the ne neig ighborhoods as concerns. ➢ The Town of

• f Por
• rt Royal, has an ordinance already in place that addresses Lic

Licensing, Nois

• ise,

, Imp Improper Park arking, Di Disorderly ly conduct and Uns Unsanitary ry Con Conditions s for short-term

• rentals. In 2019, Town Council identified the need for a task force to look into

strengthening the existing ordinance by considering, among other findings, ➢ A A cap on

• n the nu

number of

• f gue

guests ➢ A A cap on

• n nu

number of

• f vehicle

les ➢ Requirin ing that gue guests ts si sign-off on

• n a

a lis ist t of

• f Town Cod

Codes ➢ Ado Adopting a a qu quota on

• n the nu

number of

• f un

units ➢ Chief among concerns identified by the BAHA Tas ask For

• rce is the loss
• ss of
• f lon
• ng-term rental

an and for

• r-sale

le ho housin ing sto tock.

Neighborhood Impacts

Understanding Workforce

Data derived from Bowen National Research and the Greater Beaufort-Port Royal- CVB.

➢ Workforce is a complicated issue, encompassing many facets– tra ransportation, edu ducatio ion, chil childcare, hous housing—all of which play a significant role in the ability of an employer to select and retain employees. ➢ What we can all agree upon is the need to increase housing options. ➢ As of 2015, 58,41 58,417 persons were employed and working within Beaufort County, 8,83 8,839 in the City of Beaufort. ➢ Of those, 17,45 17,457 commute to work daily from outside of Beaufort County into Beaufort County. Bowen states that at least half commute due to a lack of affordable housing in the county. ➢ Beaufort County’s Labor Force is primarily broken down into 3 sectors, which represent 49.1 49.1% of the county’s total employment base –Accommodations s & Food

• od

Serv Servic ices at at 20.1 20.1%; Retail il Tra rade at at 16% 16%; and and Hea Health Car Care and and Soci Social l Serv Servic ices at at 13% 13%. .

Understanding Workforce

Data derived from Bowen National Research and the Greater Beaufort-Port Royal- CVB. *Other: Arts & Recreation; Real Estate; Financial

Services; Professional & Tech Services; Construction; Services, Manufacturing; Transportation, etc.

1,12 128 13% 13% 1,32 322 15% 15% 1,66 664 19% 19% 1,67 672 19% 19% 543 43, , 6% 6% 2,51 510 28% 28%

Accommodatio ions & Food Services Retail T l Trade Healt lth Care & Social Assist stance Public ic Administration Education Services Other*

➢Of the 8,8 8,839 people employed in the City of Beaufort –

• 19% in

in Public lic Administration and He Health thcare & So Social Se Servic ices

• 15% in

in th the Retail l Trade

• 13% in

in Accommodati tions and Food Se Services, and

• 6% in

in Education Se Servic ices

• This

is en encompasses more th than 71.6 .6%

• f our City’s workforce.

Workforce & Housing

Data derived from Bowen National Research, Housing Needs Assessment, Beaufort County; Beaufort County School District; US Bureau of Labor Stats; US Census, and City of Beaufort Housing Reports, BAHA Short Term Rental Task Force 3/2019

➢ 721 721 new/additional rental housing units needed between now and 2022- 358 358 th that t rent for

• r $875 or
• r le

less; and 117 117 - 293 293 th that t ren ent betw tween en $875 & $1474. w/ / utilit tilitie ies. ➢ 172 172 new for-sale housing units under $300,000; and 123 123 new for-sale units that sell for more than $300,000.

.

Af Affordable mo month thly y housing costs based ed on spen ending 30% Ar Area ea Med Median Income e (AM AMI) on housing (ren ent + + uti tilities es) *Ra Range e = = househ ehold of 1,2,3 or 4-person occupancy

Ac Accommod

• dations &

& Foo

• od

d Servi Services and and Retail il Trad ade

Average Sala Salary: $2 $20,8 0,800 00 to

• 22

22,19 ,190 Af Affordable Mon

• nthly Rental Rang

Range: $4 $488 88-$70 700 Available: No Needed: 358 Af Affordable Mon

• nthly Rental Rang

Range: $7 $750 50-$95 950 Available: No Needed: 293

Fir First-Year Tea eacher & & Hea ealth Car Care and and So Socia ial l Ser Servic ices

Average Sala Salary: $3 $35,1 5,156 56 to

• $3

$37,5 7,563 63

Ho Housin using Co Costs ts Per er Average Wag age e – Ci City of

• f Be

Beaufor

• rt

What this means

➢ These limited housing options have a direct link to workforce as some 57.1 .1%

• f employers in Beaufort County indicated that they have had difficulty

attracting and retaining employees due to housing challenges. ➢ These housing challenges are being fueled as residential owners/investors can find it cost effective to renovate and operate a short-term rental dwelling, in some cases, at only 38% occupancy and minimal wear and tear and overhead, as compared to renovating and operating a long-term rental year-round. ➢ The long-term effects on the City of Beaufort can be harmful resulting in a lowering of property values, a difficulty in selling neighboring properties, and more importantly – a los loss of f lon long-ter erm re rental l and sale le opti tions to ser erve tea eachers, fire firefig ighters, poli lice, hea ealth lth care re workers and our r hospitalit ity workforce.

Data derived from Bowen National Research and the Greater Beaufort-Port Royal- CVB.

Market Changes

➢ Annual occupancy for Northern Beaufort County’s traditional lodging peaked in 2016 at 58%, leveling to 52% in 2018. ➢ In the first quarter of 2019, occupancy dipped to a critical low of 49.1%, compared to 55.4% for the first quarter

• f 2018.

➢ During the same timeframe short-term rental listings in Northern Beaufort Country grew from an average 41%

• ccupancy in 2016 to a stable 53% in

first quarter 2019.

58% 41% 55.4% 53% 52% 49.10% 53% 0% 10% 20% 30% 40% 50% 60% 70% Tradit ition

• nal

l Lodgin ing Short-term Renta tal 2016 2017 2018 1st Qrt 2019

Oc Occupancy Trends – Nor

• rth

th of

• f the Br

Broa

• ad

Data derived from the Greater Beaufort-Port Royal- CVB.

Why this is important

➢ The Hospitality Industry is a vital economic driver for Northern Beaufort County. The industry not only contributes to maintaining our quality of life but supports the services and resources necessary to support that quality of life. ➢ Unfortunately, short-term rentals that are owner-occupied, and consist of less than 6 sleeping rooms, contained on the same premises, are exempt from the 6% state sales tax, the 2% state accommodations tax, and the 3% local accommodations tax– monies that traditionally have gone to support that quality of life and are paid by traditional lodging. ➢ Essentially operating as Neighborhood Hotels – short-term rentals have the same impacts and challenges as traditional lodging—parking, increased traffic, transient tenants, waste disposal, maintenance, accessibility, and life-safety. This holds true for both owner-occupied and non-owner-occupied rentals. ➢ But, current Codes and Zoning Regulations to the most part have yet to evolve to meet the short-term rental phenomenon, so short-term rentals from a Building Codes perspective are not recognized as transient lodging.

For Consideration

➢ We commend Mayor Keyserling and Council for establishing the original short-term rental task force; and for being the first in our county to take a proactive look at a critical shift in our tourism economy. ➢ We established our task force initially to address the occupancy and workforce concerns of our local lodging industry, we leave this process having realized the critical impact the short-term rental market is having on our communities – our housing, workforce, quality of life and neighborhood fabric. ➢ We hope that you will revisit the current Ordinance and processes as recommended by your task force, and with that in mind, we offer the following suggestions for your consideration.

For Consideration

➢ Grandfather existing short-term rentals with regard to new regulations, with the understanding that if the property changes hands, that all new regulations will apply. ➢ Consider a minimum room night of 7 to 30 days to reduce the adverse effects on the neighborhood fabric.

For Consideration

➢ Strengthen health & life safety codes, including: ▪ Exit Signage and Lighting ▪ Permit # on exterior of property; or use RFID Transmitter on sticker ▪ Inclusion of Land-lines to provide access to emergency services ▪ ADA compliance for locations with multiple units ▪ Sprinkler systems ➢ Pursue change to state regulation to Include all short-term rentals in the collection of the 6% state sales tax, the 2% state accommodations tax, and the 3% local accommodations tax. ➢ Pursue change to state Building Code regulations to recognize short- term Rentals as commercial lodging and adopt regulations to address. ➢ Include all short-term rentals – both owner-occupied and non-owner

• ccupied – in calculation of your neighborhood or Zone Cap.

For Consideration

➢ On applications for new short-term rentals, require applicants to state the prior use of the structure or space so that the number of units being transferred from other uses such as long-term housing can be tracked. ➢ Establish a periodic system to Monitor, Track and Mitigate impacts adversely affecting neighborhoods (noise, parking, traffic, etc.). ➢ Enact a penalty that Failure to Comply with Regulations will result in escalating monetary penalties leading to suspension or barring owners that re offend.

➢ The significant growth of the short-term rental market raises an important question – where should tourism operate and grow? ➢ Should the tourism economy grow within the traditional neighborhoods where it can impact the fabric and quality of life of our residents? ➢ Or, should Beaufort grow in the direction of who the citizens want to be? ➢ We are not asking for short-term rentals to go away. We recognize and support short-term rentals as a part of our economy and our lodging options. ➢ What we are asking to understand is What is the correct balance to support all businesses in the community?

Final Thoughts

➢ This isn’t just a question for the City of Beaufort, it is a question for Northern Beaufort County. ▪ As the growing availability of short-term rentals continues to cause a reduction in overall occupancy in the market, ▪ And, as the reduction of available housing continues to drive home and rental prices higher, and the demand for attainable housing grows, ▪ What can we do to preserve the quality of life and neighborhood feel that has made living here so special? ➢ Towns across the country are grappling with this question, and many are enacting or reducing caps on neighborhoods and communities to manage the supply. ➢ We offer a final suggestion for consideration—as you revisit our Ordinance, please consider modifying the current Neighborhood Cap to 4% to include ALL short-term rentals.

Final Thoughts

Final Thoughts

This in keeping with the City of Beaufort Strategic Plan, Goal #1: ➢ Encourage sustainable economic growth through new businesses and expansions to achieve tax base diversification and career paths into or beyond middle income through targeted recruitment and expansion of businesses in technology, knowledge management, advanced manufacturing and emerging sectors.

“The Way We Build Cities, the way we make places, can have a profound effect on the kind of lives that are lived within those spaces.” – William H. Whyte