Isle of Palms citizens’ petition to limit short-term rentals gains signatures

ISLE OF PALMS, S.C. (WCSC) - Isle of Palms residents are taking action and want to show how many people support limiting the number of investment short-term rentals on the island.

Catherine Malloy and Brian Duffy have lived on the island for nearly 30 years. Duffy is a former city council member who worked to create occupancy limits for rentals when he was in office.

“What’s happened is there’s been this proliferation of real estate investment funds that are now beginning to focus on residential communities for short-term rentals as a return on their investment. Well, that’s not what we’re about,” Duffy says.

He and Malloy stress that while they welcome a balance of short-term rentals and residents but don’t want one to overpower the other. Malloy says there is a beauty to the neighborhoods that deserve to be protected.

“We love watching the kids get off the bus because right now we have a lot more families than we used to have. So, you see the kids getting off the bus, watch the kids with their fishing poles going down to the marina since we live closer to the marina, and you see them on their skateboards and basically that really thrills us,” Malloy says.

According to the city in mid-March of 2023, Isle of Palms has 1,777 total units with short-term rental licenses. That number is 89% investment short-term rentals and 11% owner occupied. The petition would limit investment STRs to 1,600 and would not affect owner occupied properties or applications. That means the 195 resident rentals would not be included in the total and residents can still apply. The remaining 1,582 investment rentals would be allowed to exist, and the cap would begin at 1,600 licenses.

“The state allows 72 days without losing your 4% tax status. So that is not to be affected by this. So, this is really to control those short-term rental licenses for the investors,” Duffy explains.

Councilman Blair Hahn is one of five representatives who voted against a cap, in favor of monitoring the current rentals.

“But we only are showing a little over 1200 of those licenses as being active. And so, what council decided to do is monitor the situation. Let’s look at it again and six months and let’s see where we are instead of having a knee jerk reaction,” Hahn says.

He believes enforcing traffic laws and noise ordinance rules will preserve quality of life on the island.

“We just don’t see it as something that we need to take action today. We would rather just wait and monitor the situation and if we have to take action at some time in the future, we’ll certainly take that up with council,” Hahn says.

Mayor Phillip Pounds also voted against a cap and in favor of monitoring and enforcement. He says the city’s budget for this year includes a short-term rental coordinator position and two additional enforcement officers to the city’s current one. He also says all licenses need to be renewed by May 1 of each year.

“This renewal cycle will give us a good sense for how many licenses are really out there, how many license we’re going to renew, how many people just want to grant a license last year because we were talking about moratoriums or caps or changes. So, I think, you know, part of this STR coordinator position and these other compliance positions are look at the data, make sure we have good data,” Pounds explains.

He says, once those roles are in place and the renewal process is complete, the city will have a better idea of the short-term rental scope and impact. He says if a petition comes before the council, he will gladly consider its contents.

“That’s the beauty of the democratic process. Quite honestly, you know, council voted one way if there’s enough citizens that want to put a petition together and bring it back to council will have - we’re obligated obviously to take a look at that,” Pounds says.

Councilman Scott Pierce is one of the four members who was in the minority of the 5-4 council vote. He voiced his support for maintaining a balance and advocated for a new position in the city to handle the short-term rental market.

“My wife Jenny and I, we chose the Isle of Palms because of the Healthy Mix and community between short term rentals which are you know, a lot of a lot of fun. And activity on the island, permanent residents and part time residents and the businesses that were located here. So, it was a great mix,” Pierce says.

He says since then, he has seen the increase in rentals and heard the concerns from his neighbors. Pierce says he thinks 1,600 is a reasonable limit and it’s something he would support if the ordinance makes its way before council.

“The nonresident licenses are at about 1,570. The limitation that was being proposed is at 1,600. So nobody’s trying to take anything away from it. As a matter of fact, there was actually headroom in the proposal that I saw. So that is a critical piece of information,” Pierce explains.

Pounds says short-term rentals are top of mind for leaders and they do generate revenue for the island.

“Not that that drives every decision you make, but it keeps our tax rate really low. So, it’s a delicate balance for sure. And I know we need a balance of businesses and rentals and full-time residents and second homes,” Pounds says. “Council makes a decision, citizens don’t like it. They can put together a petition, get the right numbers, bring it back to council and you know if it winds up being a referendum great. I mean, again, that’s just how the process works.”

Duffy says people can expect to see the grassroots process come through their neighborhood soon. He and others who live on the island have worked out walking paths and contact systems they are about to deploy to get in touch with as many people as possible to figure out their stance.

“Look forward to some of your neighbors knocking on the door to see if you are interested in signing the petition. Because this is what gives every resident a voice in their government,” Duffy says.

For the citizen petition to appear before council as a considered ordinance, the petition must get verified signatures from 33% of the current population, which is about 700 signatures. The county would be tasked with verifying the signatures and then the item could appear before council.

Click here to learn more about the petition.

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