As home prices skyrocket, one in five Hilton Head properties are now short-term rentals

Sit down at any bar or restaurant on Hilton Head Island, and there’s a high chance that whoever’s pouring your drink drove across the bridge that day to come to work. As housing costs on Hilton Head rise above what most service workers can afford, many would rather wait in traffic every day on their commutes than pay what feel like astronomical rents.

Town leaders are hoping to address what they call a shortage of workforce housing on the island — housing that is affordable for workers that earn more than the threshold to qualify for subsidized housing.

At a Tuesday workshop, Town officials sat down with community leaders discuss the problem and what steps the town has taken to alleviate the shortage.

How much have home prices increased?

Five years ago, the median price of a single-family home on Hilton Head in 2020 was $553,037, according to data collected by Hilton Head Area Realtors. Today, it’s over $1.01 million — an 82% increase. The median price of a condo has increased by 72% in the same time period.

There are a total of 34,665 housing units on the island, including 16,882 multi-family units, 16,590 detached single family homes, and 1,193 mobile homes. Yet less than 2,500 of those are considered “affordable” by the town.

How do short-term rentals relate to the problem?

Town Manager Marc Orlando pointed out how discussions about workforce housing and short-term rentals “tend to be joined at the hip.” In 2020, the island saw a rise in both housing prices and the number of short term rentals, he said.

One in five housing units on Hilton Head are short-term rentals, according to town data — about 7,000 total. To compare, there are approximately 3,000 hotel units on Hilton Head, according to Charlie Clark, Vice President of Communications for the Hilton Head Island‑Bluffton Chamber of Commerce. Clark was not in attendance at Tuesday’s workshop but had provided this data in a previous email to the Island Packet.

How many workers live off-island?

The number of people that both live and work on Hilton Head Island has declined by 34% since 2002, according to a 2020 analysis. About 14,800 people commute to the island, while about 6,400 people live on the island and commute off-island.

These entities have the the most employees out of all other employers on the island:

• SERG Group Restaurants: 1,244
• Marriott Vacation Club International: 580
• Sea Pines Resort: 536
• Hilton Head Medical Center and clinics: 506
• Coastal Restaurants and Bars: 500
• Beaufort County School District: 438

What’s considered “affordable” for workers?

For a unit to be considered “workforce housing,” people that make between 60 to 120 percent of the Hilton Head area median income must be able to live there without spending more than 30% of their income on housing. For a family of four, that means being able to afford a home at an income between $66,120 and $135,000, according to data presented in the meeting.

What steps has Hilton Head taken towards workforce housing?

Hilton Head has created incentives for private developers to build workforce housing communities. The town has also embarked on a public-private partnership to construct workforce housing community.

Here’s a summary of all of the actions the town is taking, as outlined in the meeting:

• Data tools: The town is developing a public data visualization tool to visualize the workforce housing shortage, which is set to be completed in August 2025. The town currently has a short-term rental dashboard, which maps the locations of all the short-term rental permits issued on the island.
• New workforce housing communities: The town is partnering with OneStreet Residential to build a 157-unit apartment community adjacent to the U.S. Post Office and Marsh Point Apartments. The project is expected to be shovel-ready early next year. The town is also looking for partners to develop a 40- to 50- unit workforce housing neighborhood at 30 Bryant Road in the Muddy Creek neighborhood. Two privately led workforce housing communities may bring another 214 units to the island.
• Improving existing neighborhoods: $1.5 million is going towards efforts to improve the Muddy Creek neighborhood, including expanded sewer access and building sidewalks and crosswalks. Another $1.85 million has gone towards connecting 35 houses to sewer lines, repairing homes, and removing trees.
• Finding funding for future housing projects: The town created a housing fund to go towards public-private partnerships and neighborhood improvement projects using accommodations tax money and federal COVID relief funding. The fund has a budget of $4 million currently. Town leaders want to assess the sustainability of the fund and where money can be pulled from in the future.

How do town officials and community leaders feel about the progress?

Although the presentation did not explore how short term rental regulations could affect the workforce housing shortage, the topic of short-term rentals was brought up over and over again in discussion.

Some residents came forward to urge town leaders to control growth and voice concerns about the impacts of short term rentals on their neighborhoods. Stakeholders in the short-term rental industry came forward to ask leaders not to “villify” short term rentals, stressed their importance to the local tourism economy. Some residents also came forward to oppose public monies going towards housing projects.

Ward 4 Council Member Tamara Becker compared using accommodations tax money to fund workforce housing projects to “chasing our tails.”

“The more short term rentals we have, the more tourists we bring in, the lower our daily average rates go, but the more people that come in, [the] more employees that are needed, more businesses that say we don’t have enough employees because there’s nowhere for them to live, and then there’s that many more people that we have to service,” Becker said. “See the vicious circle we get ourselves into?”

This story was originally published July 31, 2025 at 5:00 AM.