Some Oak Island leaders are again tackling the complex issue of when a one- or two-family dwelling becomes not just a house but, as they call it, a “mini-hotel.”

The question has vexed coastal communities that are economically dependent on short-term rentals for years.

The concerns include noise, overcrowding, parking, fire safety and the general use of “single-family” residential areas. One and two-family dwellings are exempt from state fire codes. The question has become “What constitutes a single-family dwelling, versus a small hotel?”

Earlier local attempts to limit the number of bedrooms or bathrooms were squashed by the state General Assembly. House sizes in most residentially zoned areas of Oak Island are restricted to 4,000 square feet unless the applicant obtains a special use permit, which puts the cap at 5,000 square feet.

Local leaders have also included off-street parking requirements in an effort to limit so-called “mega-houses.”

The results are a mixed bag.

A quick look at a popular short-term rental website showed several houses – including at least one built in the past year – offering 19 or more beds. Oak Island Mayor Ken Thomas said he’s seen places stating they could sleep more than 20 people. “Some of them sleep up to 38,” he said.

“I want the builders to build,” Thomas said. “But we have to have integrity, safety and morality, and put sprinkler systems in these larger houses.”

Oak Island’s unified development ordinance (UDO), adopted in October 2018, states that temporary rental “for the occupancy of more than 14 individuals shall be without further administrative action immediately thereby classified as a hotel/motel use of property and considered a non-permitted use in that residential district…”

“The reason it continues is the failure of code enforcement to act,” said Planning Board Chairman Bob Carpenter. He raised the issue at the June meeting.

Thomas said regardless of the 14-person limit, the town should consider requiring fire suppression systems in larger houses, especially those at the ends of the water system where fire hydrant flows can be half or one-third the available water along most of the rest of the town.

“I want to see build-out,” Thomas said. “But I also want to see safety.”

Development Services Director Steve Edwards said town officials are compiling lists of short-term rentals and their advertised occupancy. Those built after the UDO was adopted in October 2018 are required to comply with the 14-person limit, he said.

“There is action on these properties,” he said. There is a balance between long- and short-term rentals and the town cannot be more restrictive than state rules, said Edwards.