Wilmington, N.C.- Earlier this month, a North Carolina appeals court struck down key provisions to a Wilmington city ordinance that tried to regulate how short-term rentals could operate within city limits. The ruling is a victory for investment property owners, but only a partial victory because other parts of the ordinance were left in place.
At issue is an ordinance that was approved by the Wilmington City Council in February 2019. The measure required owners of short-term investment properties (like those featured on the Airbnb or the Venmo websites) to register their homes with the city. It also limited the entire amount of short-term rentals throughout the city, and mandated that no two short term units could be with 400 feet of each other.
All those requirements were thrown out by the appeals court in the decision that was released on April 5th. However the ruling did keep in place other portions of the ordinance that required owners to provide ample parking spaces for their tenants and prohibited whole house rentals in the downtown area.
When originally approved supporters of the ordinance expressed concerns that short-term rentals could be a nuisance to neighborhoods. They also argued that housing tourists in private homes could hurt the downtown hotels that city leaders have been trying to attract and maintain for several years.
Meanwhile property owners argued that short-term rentals provided them a chance to make more money than offering long-term leases.
The appeals court ruling answered a lawsuit that was filed by a couple that owned and operated a short-term rental near downtown. David and Peg Schroeder filed a lawsuit after they tried to register their property but ended up losing out because another property within 400 feet drew a lower number.
“We are overjoyed,” wrote Peg Schroeder in a press release. “We knew all along that what Wilmington was doing was clearly illegal. It’s a shame that it took over two years of litigation to get to this point, but it’s gratifying to see another court tell Wilmington what we’ve been saying all along: Wilmington needs to follow the law.”