By Delayna Earley
The Island News
The Beaufort City Council moved forward on March 10 with a revised short-term rental ordinance, approving the measure on first reading with several amendments after a lengthy and at times pointed debate over neighborhood equity, investor rights, and how best to rein in the clustering of vacation rentals in the city’s historic districts.
The ordinance, which has been years in the making, aims to establish a citywide framework for licensing and regulating short-term rentals, which are properties rented for brief periods through platforms like Airbnb and VRBO.
Among its core provisions is a 6% cap on short-term rentals within designated residential neighborhoods, a 300-foot adjacency requirement to prevent clustering, and a one-per-parcel limit.
Community Development Director Curt Freese walked council through the key changes from previous iterations of the ordinance, including grandfathering provisions for existing operators, tightened transfer rules that would eliminate the ability to pass a short-term rental license along with a property sale, and distinctions between owner-occupied and investor-owned rentals when it comes to accessory dwelling units like carriage houses and pool houses.
The 6% cap — and how it’s counted
One of the first flashpoints of the evening came when Councilman Josh Scallate raised concerns about how the 6% cap is calculated and applied.
As written, the ordinance would not count currently licensed short-term rentals toward the cap until the property is sold, a provision Scallate argued could effectively double the allowable density in already-saturated neighborhoods.
“If you start off by not counting the currently licensed short-term rentals toward the 6% cap at all, you’re basically restarting that 6%,” Scallate said.
He also pushed back on the ordinance’s use of “dwelling units” as the basis for calculating the cap, arguing that the city should return to using residential lots as the baseline.
Because dwelling units can include individual rooms or connected spaces, Scallate warned the shift could significantly expand the total number of short-term rentals allowed citywide.
Council appeared to agree, and city staff indicated they would work with the city attorney to revise the language ahead of second reading.
The Point neighborhood exemption
Perhaps the most contentious moment of the night came when Scallate raised the issue of a provision in the ordinance that explicitly prohibits short-term rentals in the Point neighborhood, a protection carried over from the existing city code.
Scallate said he understood the history behind it, but argued the language creates an unequal playing field.
“I think the problem becomes when we put language in here that allows for a special privilege in one neighborhood,” he said, warning that codifying the exemption could open the door to legal challenges and pressure from other neighborhoods seeking the same protection.
Councilman Mitch Mitchell echoed that concern, noting that the burden of short-term rental impacts isn’t limited to the city’s more prominent historic neighborhoods.
“The pain of these short-term rentals really don’t rest in the Bluff or in The Point,” Mitchell said. “They rest in places like the Northwest Quadrant.”
He argued that singling out one neighborhood for a blanket prohibition while others face the same pressures implies favoritism.
Councilman Mike McFee pushed back, noting that the Point’s exemption was rooted in a clear democratic process, and the Point Neighborhood Association had gathered signatures from virtually every property owner opposing short-term rentals before the provision was originally adopted.
Scallate and Mitchell held firm, however, arguing that if neighbors in The Point truly don’t want short-term rentals, they won’t get them without needing a special carve-out in city code.
The amendment to remove The Point’s explicit prohibition passed, with Councilman Neil Lipsitz casting the lone dissenting vote.
Accessory Structures and Investor Properties
Council also debated a provision restricting investors, as opposed to owner-occupants, from using accessory dwelling units such as garage apartments or carriage houses as short-term rentals.
Scallate argued the restriction was inconsistent: an investor could use a standalone home as a short-term rental but would be prohibited from doing so with an ADU on the same parcel even if the main house was rented long-term.
“I don’t see value in restricting an investor from using their accessory dwelling unit as a short-term rental, so long as it’s the only one for that property, it’s within the 6%, and they don’t have anybody else within 300 feet of them doing the same thing,” Scallate said.
Freese acknowledged the point had merit but noted the original intent was to prevent investors from effectively doubling the density of their lots for short-term rental purposes.
After discussion, council agreed to strike the investor-only restriction on accessory structures, allowing any short-term rental, owner-occupied or investor-owned, to use an accessory dwelling unit, subject to the one-per-parcel rule and all other provisions.
Special exception process and enforcement
Council also approved language creating a special exception process to allow more than one short-term rental per parcel in limited circumstances, primarily for properties where multiple short-term rentals were already lawfully operating before the ordinance’s effective date, or where owners made investments in reasonable reliance on prior approvals.
The reviewing body for such exceptions was left as “the appropriate designated review body,” with staff and the city attorney tasked with determining before second reading whether that would be the Zoning Board of Appeals, the city council, or another body.
Additionally, council directed staff and the city attorney to revisit enforcement language that had stripped out a previous “three-strike” nuisance policy.
Council members argued that violations tied to noise complaints, disruptive guests, and neighborhood nuisances, not just business licensing infractions, and need to be addressed within the ordinance.
Staff also indicated they would examine whether provisions related to LLC ownership could be tightened to prevent short-term rental licenses from effectively being transferred in perpetuity through the sale of a corporate entity rather than the property itself.
What comes next
The ordinance passed unanimously on first reading with the amendments as discussed.
It will return for a second reading, at which point revised language addressing the grandfathering cap calculation, the LLC loophole, the three-strike enforcement provision, and the special exception review body is expected to be incorporated.
The city currently has approximately 223 licensed short-term rentals, with GIS analysis showing notable clustering concentrated in downtown zoning districts — the same areas that were previously exempted from the 6% cap under the old code.
Delayna Earley, who joined The Island News in 2022, formerly worked as a photojournalist for The Island Packet/The Beaufort Gazette, as well as newspapers in Indiana and Virginia. She can be reached at delayna.theislandnews@gmail.com.