Live 5 News Investigates: Illegal short term rentals

CHARLESTON, SC (WCSC) - It's happening across Charleston and hard to catch.

Hundreds of homeowners operating illegal short term rentals.

Homeowner Natalie Taylor said renting her guest house was a great way to "make ends meet" in the wake of the rising cost of living.

"The peninsula of Charleston is not inexpensive. Rates for insurance, flood insurance continue to go up," said Taylor, a small business owner. "I was a host for about six months, and I say I was full every weekend for those six months and most of weekdays at a time. Some of them work trips where it was a couple of days at a time. I had two honeymooners come in."

She also hosted a group for the Bridge Run after hotels booked up.

Then, a warning arrived via certified mail.
 
"I got a certified letter saying I needed to pull my posting or account off Airbnb, otherwise there'd be a fine or trial or summons," Taylor said. "When I got
the letter I was not aware my area was in a non-zoned or illegal area."

In fact, a 2012 law makes it illegal to rent your City of Charleston home short term or less than 30 days.

There's one exception according to the ordinance: part of Canonborough Elliotborough bordered by Meeting St., Morris and Bee streets, President St. and Septima Clark Parkway.

According to city officials, the ordinance allows those in commercially zoned areas within the perimeter to apply for permission.

Taylor's neighborhood doesn't qualify.

"It was a nice option to have that as a way to supplement my income. I always made sure I met my guests," Taylor said. "I do not want any part of a big house party. I know that's another use for Airbnb. But I think as long as you trust your neighbor to be respectful of the neighborhood and the block, then everybody should be happy."

Yet, critics said more enforcement of the current law is needed.

Linn Lesesne, chairman of the Charleston Area Convention and Visitors Bureau, said short term rentals like those on Airbnb and VRBO need regulation equivalent to hotels.

"They're not paying accommodation taxes," said Lesesne, who also serves as VP, Sales & Public Relations for Charming Inns."They're not held to the same standards of safety and quality."
 
According to a spokesperson for Airbnb, the website did start collecting state taxes from guests this July.

Yet, the city doesn't currently tax hosts the way it does hotels through accommodations taxes.

Lesesne said the quality of local neighborhoods is also at stake.

"It negatively impacts our neighborhoods, the composition of the neighborhoods when you have nightly visitors staying in the homes," Lesesne said.

According to Airbnb, 700 hosts in the city of Charleston shared their homes over the last year, housing approximately 70,000 visitors.

Hosts on average earned $9,500, according to Airbnb data. City of Charleston officials said only 65 of the hundreds of short term rentals listed are legally registered through the city. Enforcement is difficult since illegal rentals are hard to detect, according to City Planner Jacob Lindsey.

"It's a very difficult thing to police," Lindsey said. "It's very difficult to enforce short term regulations because short term rentals happen all over the city, all the time."
 
Lindsey said officials typically find out from neighbors notifying the city.

That results in a warning to the homeowner, such as the letter sent to Taylor. If ignored, homeowners may face a fine of $1,000. Since 2014, the city has issued 78 citations for such zoning violations.

"It's a challenge for us...not everyone knows whether their short term legal or not," Lindsey said.

In fact, Charleston Mayor John Tecklenburg's wife, Sandy Tecklenburg, was cited in 2014 for renting illegally. According to statement from the mayor, the couple was "taken aback" at the time.

"Neither one of us had any idea that short-term Internet rentals weren't allowed in the neck area of the peninsula. But ignorance of the law is no excuse, and upon receiving the ticket and becoming aware, we immediately took responsibility by removing the listing, shutting down her account on the website, and paying a fine of $500," the statement said.

Since his election, the mayor has announced a new task force to tackle what's been a controversial issue across the country.

In New Orleans, short term rentals were recently legalized with the exception of most of the French Quarter. While the battle continues in New York where the fine was recently increased to $7,500.

Tecklenburg's statement, released in 2015, said there's a larger question of finding a responsible way to allow citizens to take advantage of sharing platforms like Uber and Airbnb.

"The sharing economy, as it's called, is exploding all over the world, and for good reason -- it's making real people's lives better every day, by offering opportunities and conveniences that just weren't available before. We don't want to miss out on that here in Charleston. And we don't have to, as long as we're all willing to sit down around a table and find reasonable solutions that work for everyone. After all, it's not like any of this is rocket science -- we've been finding ways to integrate new technologies into the life of our city for more than 300 years now. We know how to do this. And with the right leadership, I'm absolutely sure that we'll be able to make these new platforms and opportunities available to our citizens in a responsible way that preserves and protects our shared quality of life," the statement said.

"We don't want short term rentals to impact parking or traffic," Lindsey said. "We want to make sure they don't have negative safety implications. We want to keep quality of life at the forefront for our citizens.  On the upside, we understand that short term rentals have positive effects. They can help send a child to college or offset a mortgage."

According to city officials, the first task force meeting will be held Nov. 30.

Meanwhile, Mt. Pleasant also continues the short term rental debate. According to town ordinance, a resident must apply for approval through the Board of Zoning Appeals for a bed and breakfast if the dwelling is owner occupied.  The town does not otherwise prohibit short term rentals except for in the Old Village Historic District though individual neighborhoods may prevent such in accordance with their HOA rules.

The City of Folly Beach regulates short term rentals, posting a registered list online. Homeowners must also obtain a rental registration, in addition to a business license, which must be renewed yearly. Accommodations taxes may also be applicable.

Airbnb released the following statement: "Airbnb is a proponent of common-sense home sharing rules and the ability for the cities like Charleston to collect taxes. Our primary concern is collaborating on sensible rules and legislation that work well for our middle class hosts, the small businesses that benefit from our guests, and the communities we serve." 

VRBO has not returned a request for comment.
 
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