Illegal Downtown Asheville Airbnb report took years, Citizen Times article, to see change

ASHEVILLE - In Fall 2021, local nurse and physician Hiren Patel was on the search for housing.

Thinking about where he would like to land next, Patel was wary of locations that would allow or emphasize the use of short-term vacation rentals — Patel wanted a sense of community.

Patel decided on 17 North Market Street, a location of condos he noted was close enough to three nursing homes, where he believed he could "serve the community, earn my income and have a safe dwelling for my children." He was told there would not be short-term rentals.

"I wanted to make sure that I was not going to be getting into a building where that was going on. Especially since it was a small, very intimate building," Patel said. "And for that very reason, I felt that it was, you know, easy to believe the broker."

Some who bought units in the building had a different idea.

Not long after purchasing, several unit owners began renting out their new downtown condos. Patel would later report their activity in January 2022 after renters left trash in the shared hallway, set off fire alarms, and threw parties in the building.

Patel, on the first floor, was boxed in by two units that were rented out and was "having buyer's remorse."

"The walls are paper thin. They're partying. I was getting really sad about it," Patel said.

Patel's complaint at the North Market Street building was received by city staff, which confirmed that it had reached out to the property owner and was monitoring the property.

Yet, renting would carry on without pause. The building only recently received nine violations from the city of Asheville, after the Citizen Times started reporting on the building in mid-January.

Complaint based system requires citizen approach, staff time

These downtown Airbnbs are not alone.

Despite being banned in the entirety of Downtown Asheville, the 28801 zip code — which comprises all of downtown — has the second highest density of Airbnbs in the county, according to data released by the Buncombe County Planning Department Feb. 19.

The figure comes as demand for STRs made up 46% of the overnight demand — 1.9 million nights — reported for the 2022-2023 fiscal year through the Buncombe County Tourism Development Authority.

While homestay rentals are still permitted in the city of Asheville, few resort zones — the only areas where whole-house short-term vacation rentals are allowed — are within the 28801 boundaries.

The number of Airbnbs downtown is symbolic of what is perhaps the most difficult part of Asheville's 2018 Airbnb ban — complaint-based enforcement.

"Complaint based — that's a hard number. You get X number of phone calls, emails, messages a week. Those are your complaints you tackle," said city of Asheville Compliance Coordinator Todd Justice.

Complaints are sourced through the city of Asheville App, a process that Justice compared to a proactive approach, where zoning enforcement officers — of which there are four, including himself — can't always be searching for specific violations while they respond to so many others.

"I can't have 100 officers out combing the city. That's just impossible," Justice said.

In November, there were a reported 861 homestays and 176 legal short-term vacation rentals reported by the city of Asheville Development Services Department.

After reports are filed, city has to play tag; out-of-staters avoid fines

Oftentimes, city staff keep a list of offenders for short-term rentals. They hope to refine the process.

"One of the things we're hoping to do with some of the software is to make it easier to cross check, you know, repeat offenders and stuff like that," Justice said. "Maybe we can get the software to send us a notification when somebody relists."

According to Airbnb, all of the listings at 17 North Market Street have flipped to month-long rentals, which are compliant under city ordinances, though short-term renters who have already booked the location are still allowed to fulfill their trip.

Enforcement for these processes is largely based on staffing costs, but a little less than $28,000 is put toward software designed to monitor online rental listings for repeat offenders. Even then, if a repeat offender is in another state, fines are difficult to enforce.

"We can send certified mail to Florida, there are certain criteria that allow us to then count that as being served," Justice noted. "But then after that, we have no ability to reach out and require that person to pay any fines that we place against the property."

"Except general court."

'Think of it like speeding'

In an email to residents at 17 North Market Street, Justice compared the enforcement of STRs to officers who catch those who are speeding — except, there aren't enough officers.

"Speeding is rampant and everyone does it. The fact there are speed limits keeps most people from being careless and reckless about it. But most understand you will only get in trouble for it if caught by a trooper," Justice wrote to residents. "And there just aren't enough troopers to do more than put a dint in speeding."

The difficulties with enforcement have created calls to and from members of City Council to find creative solutions, or work directly with rental agencies to find new systems of enforcement.

Andrew Fletcher, a former member of the city of Asheville Downtown Commission, told the Citizen Times that he "wouldn't have voted for it" if he knew what was going to happen in the building. The building was endorsed unanimously when it came before the commission in 2018.

"I never supported any further lodging uses in downtown because I thought somebody's got to tap the brakes," Fletcher told the Citizen Times Feb. 7.

Fletcher believes the increase in crime and lack of safety downtown could also play into the results of increased tourism and demand for Airbnb's where those living downtown would "take care of your neighborhood way more differently than a tourist does."

Then Downtown Commission member and current City Councilmember Sage Turner directly asked city staff whether there would be short-term rentals in the building — to which city staff had answered the building wouldn't have STRs, according to 2018 Downtown Commission meeting minutes.

Turner believes an easier fix could come directly from the source — vacation rental websites like Airbnb and Vrbo. Turner said she has been communicating with the rental websites, where she described the addition as being "very simple."

"When you add a listing to a rental platform, they require many things, including ID, SSN, address etc. and you cannot add the listing until the fields are complete," Turner told the Citizen Times. "We want another required field added, one for permit number."

Brett Krueger told the Citizen Times Feb. 21 that he "never told the city staff anything" about STR usage in the building but noted it may have been important to clarify — stating he "didn't know about the ban." He said he would "look into my options" if he knew at the time.

Krueger also notes he "allowed" STRs in the "condo docs."

Buy-out at 17 North Market

After Patel filed the report in early 2022, one of the developers of the building — which is adjacent to Mayor Esther Manheimer's day job at Van Winkle Law Firm — approached him and said "how much do you want."

"I was very cordial with them. I actually liked these guys, you know," Patel said. "But I think they maybe felt bad in some sense."

Charlie Caputo, one of the buildings developers, bought Patel out of the building for $825,000 in 2022 — $75,000 more than he purchased for.

For its part, Asheville Development Services Department Director Mark Matheny said they are looking at what a more proactive approach to STR regulation looks like.

"We're very early on in that process," Matheny said. "And really it's been kind of a goal."

More: Where's the cheapest rent in Asheville? Fair market rent up 78% in five years.

More: Airbnb, Vrbo laws could bring legal battle, county attorney and rental advocates say

Will Hofmann is the Growth and Development Reporter for the Asheville Citizen Times, part of the USA Today Network. Got a tip? Email him at WHofmann@citizentimes.com. Please help support this type of journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: Downtown Asheville Airbnbs flip to legal rentals, Citizen Times report