Both Sides of the Folly Beach Short-Term Rental Cap

A special election will be held on February 7th, 2023 to address the proposed ordinance to cap short-term rental licenses in Folly Beach. The resident group, Save Folly's Future has presented a citizen petition to cap the number of short-term rental units (or STRs) which has resulted in a great deal of discussion and debate on what effect vacation rentals on Folly Beach - and the limit on them - would have on the future of the area.

The opposing group, Folly United has campaigned against a "Yes" vote to prevent the cap from passing. This blog post takes a look at both sides of the debate to help you understand the matter at hand.

First, what is considered a short-term rental on Folly Beach?

According to the city of Folly Beach code on short-term rentals, a short-term rental is "Residential dwellings rented for less than 30 days, used in a manner consistent with the residential character of the dwelling." The code goes on to indicate that properties providing tourist accommodations such as hotels, motels, inns, and B&Bs aren't considered short-term rentals.

In addition, those operating short-term rentals on Folly Beach are required to have both a business license and rental registration permit that must be renewed annually.

What are some negative factors that have contributed to the proposed cap on Folly Beach STRs?

Those in favor of a cap on short-term rentals have cited some very common complaints about STRs which include:

Short-term rentals cause a nuisance

One of the biggest complaints about STRs city officials tend to hear is that they're a general nuisance to the community. These complaints tend to claim that renters are disrespectful of their surroundings, throwing parties, being loud, and leaving trash and disarray in their wake.

Short-term rental properties pose a safety concern

Alcohol consumption, overcrowding, and congestion from lack of parking are claimed to pose safety risks to both short-term renters and residents.

Overtourism poses a threat to the Folly Beach way of life

The claim is that the growth of STRs in Folly and the above concerns create an undue burden on permanent residents, businesses, and those tasked with enforcing regulations. In addition, the area's ecosystem is disrupted as well. All of these factors ultimately result in pushing out permanent residents and long-term renters.

What are some positive claims about short-term rentals that have contributed to the opposition to the STR cap?

Most STR owners are in good standing

According to an article by the South Carolina Policy Council about balancing short-term rental regulation, a study by the College of Charleston found that "4 in 5 STR owners reported getting no complaints from neighbors or community members. 4 in 5 owners with “good neighbor practices” in place also reported having positive relationships with most of their neighbors."

The presence of short-term rentals contributes to job creation

That same study indicated that more than half of the participants, "...hired up to three contractors/service providers to assist with maintaining their property." 

Short-term rental properties are more frequently maintained than long-term

Because of the shorter rental times, STR owners frequently maintain and clean the property to prepare it for the next guests. Because a majority of STR owners rely on positive reviews, they're incentivized to keep their properties in good shape.

What is the stance from Save Folly's Future?

The proponents aligned with the Save Folly's Future group propose a cap of 800 short-term rental licenses for non-resident owners. This refers to individuals or groups who don't live in Folly Beach who buy a home on Folly Beach for the sole purpose of operating it as an STR.

The goal of the group is to separate STR licenses into two groups: those who claim the property as their primary residence and those who do not claim it as their primary. Save Folly's Future considers those rentals held by non-residents as "Investment Short Term Rentals" and deems the increase as an "...existential threat..." to the community by reducing the population of Folly's permanent residents.

They say their petition is an effort to balance the number of private homes with commercial short-term rentals.

What is the stance of Folly United?

Folly United's stance is against the ordinance but claims to seek a balance between Folly Beach's full-time residents and short-term rental owners.

Folly United says that the STRs on Folly Beach are in large part family-owned vacation homes or planned retirement homes that are operated as short-term rentals in order to afford to keep them in the family. Their stance is that by passing the ordinance, homes in families for generations could be lost if they can no longer rent them during their absence, or planned retirement homes will be lost if a deceased spouse's short-term rental license can't be transferred to the surviving partner's name.

Additionally, Folly United says that passing the ordinance could mean higher taxes, lower property values, and threaten jobs and businesses in Folly. They state that over $1 million dollars in revenue is collected each year for the beach renourishment program from STRs that would be lost and could ultimately be recouped with higher taxes to residents or programs like the beach nourishment program would be cut.

They also claim home values could decrease if the short-term rental market is limited, affecting the health of the island's real estate market and making home sales more difficult.

They also note that much of the Folly Beach business community relies on short-term rentals to stay open and profitable year-round. Restaurants, local contractors, and service workers like handymen, electricians, and landscapers could be affected by the reduction of visitors to the island.

Final Thoughts

Over 40% of Folly Beach properties are listed as short-term rentals, so it's important for its residents and for the city council to carefully consider the pros and cons of changes to the regulations. Both Save Folly's Future and Folly United seem to have the balance of rentals and residents in mind and have encouraged public comments on the topics.

Hopefully, city leaders at the city council will take into account both sides of the argument so that the Folly Beach resident and the Folly Beach vacationer have a voice in the future of this amazing beach town.

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