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Highlands attorney clarifies short-term rental restrictions 

Restrictions for short-term rental (STRs) properties in the Highlands area have been discussed by town leaders over the last few weeks — resulting in clarification that ultimately prohibits short-term operations within specific residential areas of Highlands.

During a special called Highlands Board of Commissioners meeting, the board agreed to begin enforcing its current zoning ordinance, which prohibits not allowing short-term rentals in R-1 zones within the city limits beginning Jan. 3, 2022. The decision comes after complaints from residents that short-term rentals cause issues with homeowners regarding excess trash, noise, and safety concerns. 

To clarify the action taken by the town, Highlands attorney J.K. Coward released information last week. 

“At the reconvened August 24 meeting where Short Term Rentals (STRs) were the topic of discussion, the Board reached a majority consensus to direct staff to enforce all its residential ordinances with the implementation to begin on January 3, 2022. Commissioner Calloway dissented,” Coward said in an email. “The discussion covered a lot more than that narrowly focused consensus stated just before adjournment, however. The full discussion should be taken into consideration because the clear implication is that STRs will not be allowed in the R-1 District beginning in January. To make that point clear is the purpose of this memorandum.”

According to Coward, the Unified Development Ordinance (UDO) states at §6.1.C “any use not specifically set forth in the use category is expressly prohibited.” §5.2.1 Residential District R-1 is a “low-density residential district for single-family dwellings” only. Since it does not permit STRs, they are prohibited. On the other hand, R-2, a medium-density district, allows “tourist homes” with a special use permit. A tourist home “includes bed and breakfast homes or inns…where sleeping accommodations of not more than four (4) rooms are provided for occasional transient paying guests.” R-3, a high-density district, does not allow overnight accommodations at all. It should be noted that tourist homes and bed and breakfasts, like hotels and motels, are overnight accommodations and are classified as “commercial uses” in §6.5, thus the requirement of a special use permit.

“Therefore enforcement in January means issuing a notice of violation to all R-1 owners who use their homes as STRs,” said Coward. “STRs are not defined in the UDO, and perhaps they should be. The Board expressed interest in reviewing STRs in light of the special use permit opportunity in R-2 (and maybe in R-3) because the use is so similar to a tourist home or bed and breakfast. It requested that I employ an expert to guide it in further discussions this fall. I have already taken steps to do that.”

The R-1 Residential District is exclusively a low-density residential district for single-family dwellings with customary accessory outbuildings, together with such other related uses which are of a residential character or contribute to the residential character of the district.

5.2.2 R-2 Residential District

The R-2 Residential District is a medium-density residential district for single-family dwellings, with customary accessory outbuildings, including manufactured homes and home occupations, together with such other related uses which are of a residential character or contribute to the residential character of the district. Tourist homes and private schools are permitted as Special Uses.

5.2.3 R-3 Residential District

The R-3 Residential District is a high-density residential district for single-family dwellings, with customary accessory outbuildings, including home occupations, together with such other related uses which are of a residential character or contribute to the residential character of the district. Multi-family dwellings are permitted as a Special Use.

Short-term rental owners in Highlands are working to challenge the ordinance as it relates to their rights as property owners and have set up a GoFundMe page to raise money for legal expenses. 

According to the GoFundMe page, the committee is made up of Debi Bradshaw Martin, Caroline Ragsdale, Will Pichard, Becky Blakeney, Chris Rideout, David Bee, Julia, and Chris Weller, Kristy Jones-Favalli and Jennifer Huff.

Funding raised from the GoFundMe page is stated to be earmarked for a lawsuit against the town of Highlands through the Asheville-based law firm of Allen Stahl, and Kilbone with attorney Derek Allen. 

“The GoFundMe account will be used to pay the retainer and legal fees of the law firm incurred in the prosecution of the litigation,” the page says. “All funds will be managed and disbursed by Highlands Area Vacation Rental Owners/Managers, LLC, established to manage the litigation. The treasurer of the LLC will be authorized to disburse payment of the GoFundMe funds to the law firm upon receipt of invoices for legal services rendered in the litigation.”

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