This article was written for our sponsor, the North Carolina Municipal League.
The town of Asheville, located in the Blue Ridge Mountains of North Carolina, is known for its vibrant arts and cultural community, the famous Biltmore Estate and, of course, its natural beauty and outdoor adventures.
Its attractiveness and appeal cater to over 92,000 residents and a robust tourist economy that hosts approximately 4 million visitors per year. Due to its local and national popularity with tourists, it’s no surprise the city is “one of the hottest Airbnb markets in the country” according to a study. conducted by IPX1031a national financial company of Fidelity.
Like other cities in the country with a strong tourist flavor, Asheville is now tackling the relatively new phenomenon of Airbnb and other short-term rental and sharing economy platforms and what that means for tourists, residents, business owners and the city. long-term housing stock.
Balancing these interests is not easy.
The city and the local business community appreciate its status as a hip destination to explore on a long weekend or a week or two away, recognizing the need for accommodation for visitors. But local policymakers have also had to weigh the interests of residents wanting to protect investments in homes and the quality of life in traditional neighborhoods, as well as consider long-term needs for adequate and affordable housing.
Similar debates are taking place across the country.
“Asheville has a long history of tourism dating back over a hundred years, however, it has had downtimes,” said Brad Branham, the Asheville City Attorney. “Through much planning, our economy and development has largely been absorbed, and much of it is based on or in conjunction with tourism.”
The revival of Asheville’s tourism economy has resulted in new businesses, more people, and more revenue. Infrastructure to house, feed and entertain residents and the millions of visitors each year has become a necessity.
As tourism grows, some residents have wanted to take advantage of the sharing economy and list their properties for short-term rentals.
“There is an initial positive impact to this because people who are not hoteliers or who may not own tourism-centric businesses have the opportunity to benefit from the tourism boom with what they have, which is maybe a property they can rent out,” Branham explained. “Originally, Asheville wanted to give ordinary citizens the opportunity to take advantage as much as they could of the tourist economy that is so strong here.”
However, problems for the city began to arise when investors began to buy properties only for the purpose of using them for short-term rentals. Displacement of residents, gentrification, and rising housing costs have all been negative side effects of some of these real estate investments.
“As an investor or developer, if you can make three times as much money renting your property for a short-term rental as you can rent it to a resident, you’re probably going to make the former,” admitted Branham. “We have a major problem here with a housing shortage that has driven up rents and house prices. It’s a major problem across the country and the state, and it’s particularly acute here – the lack of housing affordable.”
Branham pointed out that when he talks about “affordable housing,” he means anyone pushed out of the Asheville housing market, including those with middle to median incomes.
In response to these competing interests and the changing landscape, Asheville in 2018 banned new short-term rentals in most locations, while allowing those already permitted by the city to continue – only making exceptions. only by applications for conditional use before the municipal council.
When the city started considering this approach, not everyone was happy.
Some residents wanted short-term rentals to continue in certain areas without further restrictions. Others, however, already knew the downsides.
Asheville resident Moira Goree told council members she already felt like she was being pushed out of town by rising rent prices.
Sue Robbins of Downtown Asheville Residential Neighbors added, “The proliferation of short-term rentals in an area, which we consider our neighborhood, is detrimental to the sense of community that we try to build and maintain as residents of the CBD. . [Central Business District]“, reported the Mountain Xpress newspaper.
In response to these sentiments, the city council approved the 2018 restrictions.
But residents looking to cash in on tourist visits can still do so through Asheville’s homestay category. The residence permit allows residents currently living in their properties to rent rooms or parts of their house to people for stays of 30 days and less.
Asheville is perhaps ground zero in North Carolina when it comes to balancing competing needs with the new challenges created by the home-sharing economy. But other cities and towns are feeling the strains.
More will in the future.
Because each of the cities in the state is unique, Branham doesn’t see statewide regulation or a “one size fits all” approach working. He believes challenges are best handled at the local level to “address the specific circumstances unfolding in your own backyard”.
For Asheville, this has meant acknowledging the positive impact that an established level of short-term rentals has had on the local tourism industry, but also seeing that their unchecked growth would so undermine what has made the town the great destination that ‘she has become .
This article was written for our sponsor, the North Carolina Municipal League.
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