At its July 8 regular meeting, the Southport Board of Aldermen approved amending the city’s unified development ordinance (UDO) regulating short term rentals. The measure passed 4-2 with Aldermen Lora Sharkey and Marc Spencer dissenting, with the split vote following a lengthy public hearing at which amendment proponents and opponents voiced opinions to board members.
Most speakers repeated points they’d made during public comment sessions at previous Southport Planning Board meetings, while some strong opinions were voiced by newcomers to the short term rental playing field.
“In the current economy, in a tourism community, there’s a need for short term rentals, rentals of less than 30 days,” stated Tyler Newman, who represented Wilmington-based Business Alliance for a Sound Economy. According to Newman, there are a lot of different reasons people may be staying in town. “If the recent storm [Elsa] had been worse, there would have been power company people coming to town who needed a place to stay as they helped out in the community,” he said.
Rebecca Kelley, a professional property manager and owner of the Inn at River Oaks in Southport, said as Southport continues to gain national fame as “the happiest seaside town,” there’s going to be an increase in the number of people interested in coming to “our fair town.” She added that a free market will regulate itself.
“We need to guide and change to protect this town for our children and the economic growth that comes with it,” said Kelley.
“The issue is that economic growth is not short term rentals, it is an issue of new developments coming in and tearing down our trees and our historic Southport cottages instead of trying to fix them up,” she said.
Kelley told the aldermen she knows several people who have purchased derelict cottages and completely renovated them for use as short term rentals, adding, “Those cottages are now contributing to the city’s tax revenue base rather than falling in on themselves.”
Melissa Bell of East 8th Street in Southport provided a different opposing view of the UDO amendment. She noted that the country, state and county is in an economic situation in which many people are doing the best they can to simply survive.
“I personally used my home as an Airbnb a while back when we had some issues and needed to survive economically,” Bell said. “I don’t think that all people who are using their homes for short term rentals should be considered ‘greedy.’”
Others opposed the ordinance amendment because they felt it would eventually end the short term rental market in Southport.
“The ordinance you are looking at this evening will eventually eliminate short term rentals from much of the city,” stated Kim Felts, president of the Southport-Oak Island Chamber of Commerce in a letter read by City Clerk Dorothy Dutton.
“This is highly objectionable; however, there is a better way forward,” she wrote. Felts noted there are good examples of actions taken by other municipalities, like Nags Head, North Carolina, regarding short term rentals that can provide sound guidance for Southport’s planning board and aldermen.
Felts also stated that enforcing existing regulations already on the books would alleviate the issues that worry Southport residents. “If you will slow your progress on this ordinance amendment and look to your existing ordinances, you may find middle ground exists already,” she said. “Enforcement of existing ordinances could ensure residents have recourse for non-neighborly activities, protect the rights of property owners and provide regulations for individually managed short term rentals, bringing them into compliance.”
Another theme was that preliminary work by the Planning Board sub-committee that drafted the amendment was not balanced because property management businesses and individual property owners were not included in the conversations. Some noted the regulations were overly harsh for short term rentals and did not fairly regulate them in comparison to various other types of accommodations available in Southport.
Those speaking in favor of stronger regulation also repeated issues previously noted in Planning Board public comment sessions. Some residents are alarmed at the growth of short term rentals, particularly within the city’s historic neighborhoods. According to Planning Board statistics, Southport currently has 106 unique short term rental properties, and has seen a 31- percent growth in short term rental units since last year.
“My fear is that if the current growth rate continues unabated, the very nature of Southport that attracts visitors will eventually be lost,” said John Baroset, a long-term renter who lives on Atlantic Street. “Families that have lived here for generations who find themselves surrounded by short term rentals feel compelled to relocate to another community,” he added.
Rebecca Felton of North Caswell Avenue said when she and her husband purchased their home, they never considered they would be surrounded by short term rentals. She had spoken with neighbors who were very concerned about problems they’ve had with short term rentals in the neighborhood. Because of that, Felton reviewed the proposed text amendment, developed a one-page summary, and shared it with friends and neighbors.
“I learned in my conversations that there are at least ten such units within just a few blocks of my home. I was not aware there were that many,” she said. “I also learned of two individuals who had moved from our neighborhood because of problems with short term rentals.”
Several speakers expressed fears that short term rentals will change the character of Southport and erode the qualities that “make people want to move here and call it home,” as one speaker said.
“We are not Oak Island, we are not Carolina Beach, we are not Myrtle Beach and we’re certainly not Nags Head,” stated Ginger Harper, a Southport realtor and Bay Street homeowner who told the aldermen she for one does not want to be like those towns. She said there is place for short term rentals-on the ocean front and on second rows in those communities, but not here in Southport.
Harper also spoke of neighbors of having to put up with the “loud music at night, illegal parking, littering … and general disrespect … they’re obnoxious… .
It’s been like the Wild West … they’re fighting amongst themselves, and smoking pot out in the streets,” she added.
“It’s time we stand firm and guide change in an effective way to protect what we have and to conserve it for the future for our children and our grandchildren,” Harper said, and urged aldermen to show leadership on this issue. “Ensure that our neighborhoods continue to be filled with neighbors, not tenants,” she said.
Tracy Beaulieu has been here six years, and the short term neighbors are a real problem in her neighborhood on Nash Street.
“I didn’t move here to live next to two practically motels,” she said. “Last week we had a group that looked very scary and they were walking down the street smoking pot.”
She said there have been noise issues, and that she is reluctant to call the police when there are issues because is afraid of retaliation.
“I don’t know these people,” stated Beaulieu. “They’re strangers, they’re transients, and I have no idea if they’re violent or if they carry guns … it’s kind of worrisome.”
Beaulieu added that the short term rentals are taking away the character of historic Southport.
“I’m afraid we are going to lose the charm and character of what people like to come to Southport (for).”
Board members comment
During board discussion, Mayor Pro Tem Karen Mosteller noted that Southport’s core values can be found in the Coastal Area Management Act (CAMA) land use plan, which she noted is the city’s strategic, long-range planning document. “Two of the five core values named in this document speak directly to the reasons for the short term rental regulations,” she said. “These were to preserve the city’s historic character and to preserve the city’s residential areas.”
Mosteller added that Southport’s successful tourism industry is not dependent on short term vacation rentals within the city’s residential neighborhoods. Southport is surrounded by beach rental communities that provide short term vacation rentals, she said.
“The quality of life in Southport depends in large measure on the residents who live here. That quality of life depends on keeping the ‘neighbor’ in neighborhood,” Mostellar concluded.
Aldermen Lowe Davis thanked all who had spoken and who had helped her see the pros and cons of both sides of the issue.
“This is the hardest decision I’ve had to grapple with as an alderman,” she said. “However, I see my vote tonight ultimately as a vote for the soul of Southport,” regarding her support of the amendment.
Dissenting aldermen also made their views known.
“Are we overstepping our bounds with what we can and can’t tell people what they can do with their personal, private property?,” Sharkey asked during board discussion. She said the issue was similar to that of nearby Wilmington where stricter short term rental rules had been put in place. She noted Wilmington’s new regulations are currently tied up in a court challenge.
“I’m not in favor of passing an ordinance that’s written this way. I think it’s too stringent - it needs to be examined for what is legally defensible, what is reasonable and that safeguards residents but also allows private use without us overstepping our bounds,” said Sharkey.
Spencer also weighed in on his opposition to the amendment.
“Short term rentals are not our enemy,” he said. “The fact that people are buying million-dollar homes and only living in them three months out of the year puts us in a bind, because they only use their resources for a very short period of time, and that doesn’t promote families, homes or infrastructure.”
Southport Marina request
Robin Rose, Vice President of Land Acquisitions and Construction for Preston Development Company, owner of Southport Marina, asked the board Thursday night to consider using the number of parking spots serving the planned second dry stack storage building to calculate the city’s system development fee opposed to the number of slips.
Southport Marina plans to add an additional 216-slip dry stack storage unit at its facility on West West Street. The structure has been previously approved by the Planning Board and the Board of Aldermen. The next step is for Southport to issue a building permit for the structure. However, the city requires the marina to pay water and sewer system development fees before a building permit is issued.
City Manager Gordon Hargrove and board members added that the current rate formula and flow rates for system development fees were set in 2018 using guidance from the state and a study conducted for the city by McGill and Associates. Per those rates, marinas with bathhouses should be assessed at a rate of 30 gallons per day per slip.
Thus, in Southport Marina’s case, system development fee for a marina with a bathhouse would total $191,160. A marina without a bathhouse would be assessed at a rate of 10 gallons per day per slip for a total system development fee total of $63,720.
Rose pointed out the high cost associated with the system development fees.
“What I don’t see is 216 people showing up every day for 365 days a year using 30 gallons of water each,” Rose noted. “The methodology does not work - it doesn’t even really make sense.”
According to Rose, the parking lot at most would hold 54 vehicles, so slip usage should be predicated on parking use - and not the number of dry slips.
A system development fee based on 54 parking spaces for a marina with a bathhouse would significantly reduce the development fee charged by the city, bringing it to $47,790. A system development fee based on 54 parking spaces for a marina without a bathhouse would be $15,930.
Sharkey responded, “If we make that exception for the marina, who’s to say we shouldn’t make that exception for a new store that has a parking lot, so they only get charged by the number of parking spaces they have versus the kind of business they run?” She added the UDO worksheet the city uses is not based on parking spaces, but based on use, such as boat slips or storage units. “It’s a formula we need to use and uphold with consistency in order to have validity in what we do,” Sharkey said.
She added that if Southport Marina is willing to retain an engineer to do as study on percentages of peak usages and such, it may be possible to come up with a different, valid formula, but she didn’t know how that would work.
“In good conscience, I don’t see how we can deviate from our worksheet that we consistently use as part of our UDO process. That it is not what you want to hear, but I think it is the fair way to do things,” she said.
Board members rejected Rose’s request that would require amending the existing development fee ordinance. However, it did vote to charge a development fee based on the city’s 2020-2021 rates rather than current fiscal year 2021-2022 rates. So, for the new dry stack structure without a bathhouse, “the marina will save $24,000 in fees,” said Alderman John Allen in making the motion later approved by the board.
• Mayor Joseph P. Hatem, MD, proclaimed July in Southport as national parks and recreation month. In his remarks and accompanied by Southport Parks and Recreation Director Heather Hemphill, Hatem noted the importance of parks, “for physical and mental health, preserving natural resources and beauty, bringing the community together and promoting a healthy economy.”
• Public hearings were conducted for several Planning Board requests presented by Thomas Lloyd, Southport City Planner. Following hearings, aldermen approved an annexation request for a parcel at 1147 North Caswell Avenue and rezoning to R-10 for several additional lots on North Caswell Avenue. The rezoning will allow residential development at a lower density than allowed under the previous multi-family zoning.
• Aldermen approved financial terms with TRUIST, which is offering financing at 1.42- percent over five years, tax exempt, for $424,000 that will enable Southport Fire Department to finance new fire apparatus.