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After city’s legal defeats, Residents of Old Wilmington again pushes for short-term rental regulation

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Recently, Wilmington’s short-term rental regulations were largely struck down in Superior Court, a decision upheld by the Court of Appeals. Now, Residents of Old Wilmington is asking the city to ban whole-house STRs in the downtown historic neighborhoods it represents.

The Residents of Old Wilmington (ROW) organization was founded in the early 1970s to advocate for issues in the city's oldest downtown neighborhoods and has become influential in local politics. ROW pushed hard for the city to regulate STRsfor several years before the city finally passed new rules in 2019: ROW was helped in no small part by having two former ROW presidents — Paul Lawler and Kevin O'Grady — on city council at the time.

Dr. Joe Pawlik, a member and former president of Residents of Old Wilmington, said the city’s rules successfully addressed a host of concerns, including partying and other noise violations, parking shortages, and LLCs converting residential housing units into businesses.

“The city came up with their own version of how to control STRS, back in March of 2019. And we instantly saw relief, I mean, basically, all of the STRS that were functioning in the [historic districts] had to go to long-term, so one month or more, and we didn't have any of the problems that we saw before that time," Pawlik said.

But those controls were struck down by the courts — and last month the city conceded it would refund over $500,000 in STR fees and walk away from any additional appeals. Now, ROW is asking the city to revisit the issue. In a letter signed by Pawlik, former president Phoebe Bragg, and current president Mary Grace Denton, ROW addressed Mayor Bill Saffo, city councilmembers, city manager Tony Caudle, city attorney John Joye, and incoming planning director Linda Painter:

We are writing to you today to learn how the City of Wilmington intends to regulate whole-house short-term rentals in residential districts? A recent article in WilmingtonBiz (2 May) indicated that the City intends to draft new STR code that will go to the Planning Commission in June and City Council in July. Will there be public input on the new STR code before it goes to the Planning Commission? Will City Council have a public information session on the code changes?

In the wake of the recent court ruling on the Schroeder case and decision by the City to cease STR registration, we appeal to the City to enforce residential zoning to restrict STRs, as continues to be successfully done in Asheville, NC (despite the court ruling). Whole-house short-term rentals are businesses, which are not permitted in residential zones. In the 3+ years since City Council restricted whole-house STRs in Wilmington, corporations (LLCs) have been buying up houses in other cities for conversion to STRs, removing long-term residents and negatively affecting the availability of work-force housing.

Pawlik blamed lobbying by the STR industry, companies like Airbnb and VRBO, for state laws that have made it difficult for municipalities to regulate STRs, "tying the city's hands" to some extent. He also said he wanted to be clear that he was only concerned about whole-whole house rentals — as opposed to families renting out a room or accessory dwelling — and only in the downtown Wilmington historic districts (HD).

"I would think that a reasonable compromise situation would be this: ban STRS in the HD zone… ban it, and then let STRs do whatever they want in all the other residential districts, and then keep tabs on what's going on in the in the HD versus what's going on everywhere else," Pawlik said.

The city said it continues to evaluate short-term rental regulations to balance "the safety and integrity of residential neighborhoods" with the "entrepreneurial rights of short-term rental" owners.

According to a city spokesperson, staff met with Pawlik and told him the city was being cautious, "especially considering the recent lawsuit and the fact that Asheville is currently revisiting its ordinance. To prohibit STRs in certain districts, the city would have to show a disproportionate impact in that district compared to the other zoning districts of the city."

The city also addressed a concern that it was being lobbied locally by LLCs or corporations with a vested interest in deregulating STRs — or keeping them deregulated.

"While the city did receive extensive feedback from both sides when initially drafting language for the STR regulations years ago, the city has not been lobbied from corporate interests this year," according to a spokesperson.

Pawlik acknowledged that ROW probably "didn't have the votes" on council, but said, "I'll probably speak on this, if for no other reason than to set the stage, and if things start to turn, so that we're on the record as having said, okay, you know, the floodgates are opening — when we lose our neighborhoods, you'll understand why, but by then it will be too late."