Charleston and Isle of Palms Reach Agreement with Rental Companies

News Summary

Charleston and Isle of Palms have finalized a settlement with short-term rental companies like Airbnb and VRBO to recover owed local taxes. This agreement, approved on January 28, 2025, represents a coalition of 14 municipalities and is expected to bring significant revenue to local governments. Meanwhile, North Charleston is considering new regulations limiting rental permits to address community concerns about an oversaturation of short-term rentals. The debate over rental regulations continues to escalate across South Carolina’s tourist destinations.

Charleston and Isle of Palms Strike a Deal with Short-Term Rental Companies

In some exciting news from the charming cities of Charleston and Isle of Palms, both local councils have recently approved a settlement with short-term rental giants like Airbnb and VRBO. This agreement comes as a result of a lawsuit aimed at recovering unpaid local accommodation taxes and business license fees that these rental companies owe. The settlement, finalized on January 28, 2025, is sure to be a relief for the local governments that were eagerly waiting for financial compensations.

While the cities haven’t revealed precisely how much money they’ll rake in from this deal, the anticipation is palpable. Representing a coalition of 14 municipalities in the suit, Attorney Jesse Kirchner emphasized that this agreement will only be considered final once all involved areas give it a stamp of approval. Coincidentally, earlier this month, Mount Pleasant received nearly $500,000 as part of a related lawsuit involving the same short-term rental companies.

Tax Revenue Matters

Why is this settlement so crucial? Well, Charleston is expecting to collect a hefty sum of $52 million from business licenses this year alone, making this revenue source the second-largest for the city, only falling short of property taxes. Additionally, local accommodations taxes are forecasted to yield nearly $12 million in 2025. This funding is vital for maintaining the city’s beautiful tourism sites, which attract visitors each year.

If you didn’t know, Charleston has a 2% accommodations tax, while other municipalities can set rates as high as 3%. This difference can affect tourism revenues significantly.

North Charleston’s New Measures

North Charleston, another discussion is brewing as local leaders contemplate new regulations concerning short-term rental permits. Currently, there are 556 active permits and around 50 applications waiting in the pipeline. The proposed cap on short-term rental permits would limit each of the city’s ten districts to just 60 permits. This new policy aims to address the community concern over an overwhelming influx of short-term rentals.

Many residents are raising alarms about the effects of excessive rentals on their neighborhoods. This growing concern among community members is why Councilmember Michael Brown is advocating for the cap as a way to protect local housing stock and maintain neighborhood integrity.

The Bigger Picture in South Carolina

It appears that the short-term rental debate is really heating up across many parts of South Carolina. Major tourist hotspots like Charleston and Myrtle Beach have taken a strong stance against these rental companies, starting similar lawsuits for the same reasons. However, some local officials are worried about potential state legislation that might lift caps on short-term rental permits. Such changes could lead to an overwhelming surge in rentals, creating challenges for local communities.

Further compounding the situation, nearby Lexington County is rolling out its own regulations for short-term rentals, mandating a $320 annual permit fee and a two-night minimum stay requirement. These regulations aim to mitigate noise complaints and ensure rental operators maintain good communication with neighboring residents.

Yet, not everyone is on board with these tighter regulations. Some rental property owners believe the measures introduced by Lexington County may be too stringent, potentially disrupting their business operations.

As the debate continues to unfold, it’s clear that short-term rentals are a hot topic among communities across South Carolina. Cities are finding a balance between welcoming the tourism that these rentals provide while ensuring that local residents’ quality of life is not compromised.

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Additional Resources

• Post and Courier: Charleston Airbnb VRBO Lawsuit Settlement
• Wikipedia: Short-term rental
• Live 5 News: North Charleston Considers Cap on Short-Term Rentals
• Google Search: Short-term rentals South Carolina
• Count On 2: Isle of Palms Oppose State-Wide Short-Term Rental Regulations
• Google Scholar: Short-term rental regulations South Carolina
• The State: Local News on Short-Term Rentals
• Encyclopedia Britannica: Short-term rental