‘Unreasonable’ or necessary? Lexington County’s Lake Murray rental crackdown spurs concern

Molly Dannelly’s family owns a small home on Shull Island north of Gilbert where they host family gatherings or visiting friends. But when the house is sitting empty, she infrequently books guests through Airbnb, just to make ends meet.

“We do it primarily to help pay the property tax,” Dannelly said. “Truthfully, we’re not primarily a business. ... We don’t really advertise.”

But reading over all the new rules and regulations recently passed by Lexington County for short-term rentals, she thinks her family’s time in the rental business may be coming to an end.

“My husband said, ‘Well, let’s stop,’” she said. “I think that’s the way he would like it.”

At a time when cities and counties — and tourist destinations, in particular — are grappling with ways to crack down on or regulate a boom in short-term rental homes in residential communities, the Midlands’ most popular summer tourism area is laying down its own new rules that mirror laws being passed across South Carolina but that some property owners say are “unreasonable and unnecessary.”

Pushback from many local short-term rental property owners originally sent officials back to the drawing board, but Lexington County has now finalized and approved new restrictions that will particularly affect houses surrounding Lake Murray and are set to take effect next year.

Among other things, those new restrictions require that all short-term rental operators in unincorporated areas of the county must apply for and receive a permit from the county, which will cost $320 annually. They also dictate that all rental reservations must be for at least two nights and that the operator or a designated representative must be within 45 minutes of the property at all times to be able to respond to problems and complaints.

The new restrictions, which will take affect Jan. 1, are the result of an effort by County Council to cut down on parties at local Airbnb and Vrbo rentals, particularly around Lake Murray, which have become a nuisance to some residents.

“We had an extensive conversation with people in the industry ... and they said that that traditionally worked out really well,” County Council Chairwoman Beth Carrigg said during an April committee meeting, zeroing in on the 45-minute requirement. Council gave final approval to the new restrictions later in the month.

“If you had somebody in the 45-minute range that can be there and take the weekend calls, our office obviously is not prepared to do that,” Carrigg said. “But they would be and they would respond. And it would only come back to us if they could not get the homeowners to do what they were supposed to do at that point.”

But rental owners say the rules are unnecessary and, in some cases, might inhibit their business.

Todd Lyle, a Lexington town councilman who owns a rental home on the lake, said he filed a request with the county for any complaints council members or county officials had received about short-term rentals. He only received two responses, both of which he said could be handled under existing ordinances.

“They’re inventing a problem to try to solve it,” Lyle said of the new ordinance. “If it’s 10:30 at night and somebody’s blaring music, there’s a noise ordinance for that. And the noise ordinance applies to everybody, whether they’re in a short-term rental or not.”

He also sees some of the requirements as overly invasive, such as the requirement to have annual inspections of a rental property’s septic tank, something he doubts regulatory agencies have the time or staff to carry out.

“There are septic tanks all over, and there’s (otherwise) no requirement to get them inspected,” Lyle said. “What authority do they have to give that kind of request?”

He believes both neighbors and renters currently have a way to complain about nuisances or violations directly to rental services such as Airbnb and Vrbo, and those complaints should be sufficient to shut down a rental with frequent disturbances or other problems.

Airbnb, the largest company offering an online platform for nightly rental listings, offers a way for neighbors to contact the company directly about disruptive behavior and has policies against using rental properties to host parties, according to the company’s website.

Lyle also worries about the requirement that renters must stay at least two nights, something that will eliminate many renters who only want to stay for one night.

“There are business people who will pay top dollar and only spend one night,” he said. “I get a lot of activity for graduations at Fort Jackson and USC, and they’re only there for one night. It’s a steady stream of guests.”

The $320 permits now required by the county would fund an office tasked with regulating the county’s short-term rentals, including two new staff positions.

The new restrictions have some other notable terms:

• The county may conduct inspections of short-term rental properties with 24 hours notice.

• Guests making reservations must be at least 25 years old.

• Each property must provide at least one parking place per bedroom listed. Overnight street parking is prohibited.

• Occupancy cannot exceed two people per bedroom, excluding minors under 5, and it cannot exceed the maximum Department of Health and Environmental Control rating of the septic tank.

• Neighbors immediately adjacent to the property must be notified of a property’s use as a short-term rental and be provided with contact information.

• Short-term rental operators must “provide proof of inspection by a Good Operating Condition Report by a SCDHEC licensed inspector. The inspection must take place within 30 days of application and requires a pump-out of the septic tank to ensure a proper inspection of the interior of the tank.”

• Operators must develop a plan to address and prevent nuisances such as noise, glare/light, parking and trash/litter.

‘Push investors away’

Short-term rentals are a business that is only becoming more prevalent locally, county staff members have emphasized during deliberations about regulating the properties.

“Two vendors that we are already speaking with just trying to get some information estimated ... 600 short-term rental units within the unincorporated areas of the county. They’re estimating an annual increase of almost 50% a year,” said Robbie Derrick, the county’s director of community development. “I think that’s a little higher, but they’re anticipating a high increase within this area. Charleston County has four staff members dedicated for their short-term rental program.”

The public hearings conducted as council considered the restrictions were dominated by short-term rental operators concerned about how the new rules would impact their business.

“I don’t think it’s the county’s determination to decide what is a responsible age (to rent),” Dustin Johns, who offers lake homes for rent on LakeMurray.com, told The State. “It seems like a private right to me, to determine who stays in your property.”

He believes the new regulations will reduce the number of rentals around Lake Murray and hurt the tourism industry around the lake that Lexington County itself works so hard to promote. It could also take a bite out of county revenue, he said, because if rentals without full-time residents are sold to owner-occupiers, they will be taxed at a lower rate.

“My opinion is it will push investors away,” Johns said. “It’s unreasonable and unnecessary.”

But that may happen anyway. Johns thinks the Lake Murray market is already “past saturation” with rentals and the numbers will drop off on their own if operators can’t book enough guests to make it worthwhile.

At his properties, Johns said he monitors for rowdy behavior by having a decibel reader installed in the house that will alert him to loud noises before neighbors can call the police.

David Bergmann, the owner and CEO of Heartwood Furnished Homes, has about 20 homes for rent in Lexington County. As the county council was working on an ordinance, he got involved in the process early to ensure rental operators had a voice in any new rules being drafted. Bergmann also was a vocal presence in neighboring Columbia’s process of developing short-term rental regulations.

“Early on (in Lexington County), there was discussion that it would potentially get rid of all rentals that are in certain zoning districts, and all rentals in certain street classifications, and that was very concerning,” Bergmann said. “Many of the zones that are in that Lake Murray area where people want to have rentals, this would not have allowed them to continue operating.”

So, “on behalf of our business, we let them know it would be super impactful if that would be based on zoning districts,” Bergmann said.

Operators who spoke to The State said that council members were responsive to their concerns in drafting the ordinance. “If you email Beth Carrigg, she’ll email you right back, sometimes within five minutes,” Bergmann said.

But some still worry about the regulations that ultimately passed, including the limitation on how many people can stay in the rental — now set at two adults per bedroom. “There’s concern that will take away the ability to rent, and what are the dollar amounts we can rent for,” Bergmann said.

But overall, “I’m happy they landed on something where people will not have to sell their houses because they can’t afford the taxes,” he said.

“It still puts rules into effect that are pretty reasonable, around occupancy, noise, parking, and stuff like that,” Bergmann said. “That just requires us to be good neighbors.”

Rental operators The State talked to said they work to maintain good relationships with neighbors of their properties.

“At all of our properties, our neighbors refer guests to us to have people stay next to them,” Johns said. “So there’s no need for an ordinance in our viewpoint.”

In fact, Dannelly said she doesn’t think the requirement to have a representative available to guests within 45 minutes is relevant, because she works with her neighbors when she rents the Shull Island house.

“If somebody messages me (through Airbnb), I can respond to them really quickly, and if the water goes out, my neighbors are aware and know when I have guests, and they can help out,” Dannelly said. “So, really, access is not too much an issue.”

How other places in SC handle rentals

The issue of how to regulate short-term rentals — generally defined as any rental lasting less than 30 days — is on the minds of many communities in the state, says the Municipal Association of South Carolina.

Travel hotspots Charleston and Greenville have both already addressed the issue.

The city of Charleston ended its near-ban on short-term rentals in 2018, establishing strict parameters for their operation. Whole-home rentals are banned, with owners required to be staying on site when they have rental guests, and there are restrictions on what buildings can be rented in an effort to safeguard historic structures. The county enacted much looser regulations that same year for unincorporated areas, with a permitting process similar to the one enacted in Lexington County.

The city of Greenville largely restricts short-term rentals from popping up in its neighborhoods, relegating them to mixed-used spaces that often already have hotels.

Locally, the city of Columbia and Richland County have both enacted restrictions in the past couple years, with the county finalizing its regulations last month.

Richland County’s new regulations are less strict than the capital city’s, requiring all short-term rentals in unincorporated areas to maintain a county business license, at least two parking spaces for guests and a record of all guests with contact info for all guests who have stayed there in the last two years. They must also pay the county’s 3% accommodations tax.

The city of Columbia has different rules for owner-occupied rentals and non-owner-occupied rentals, charging more for non-owner-occupied locations. As in Lexington County, the more restrictive regulations the city initially considered were shouted down, with rental owners arguing a proposed ban on non-owner-occupied properties would be catastrophic for the local rental market.