Will Hilton Head’s new rules lower the number of short-term rentals? Here’s the early data
Early data is emerging from a Hilton Head Island decision that prioritizes residents seeking to preserve their quality of life above tourism, the island’s economic lifeblood.
On Jan. 1, the town’s newest measure to monitor short-term rentals went into effect, an ordinance requiring rental owners to obtain a business license and pay $250 for a permit.
Response to the new regulation was mixed. Some renters who own property on Hilton Head but don’t live on the island or in Beaufort County said at a December information session that the extra costs were akin to “taxation without representation.” Other renters, primarily those who live on Hilton Head, applauded the town stepping in to curb disrespectful renters or tourists disrupting residential neighborhoods.
With another peak tourist season on the horizon, it appears the ordinance has had little effect on the number of overall rentals, despite hopes STR regulation could help lower the island’s cost of living. The town’s ordinance also could clash with a South Carolina bill looking to declaw municipalities when it comes to regulating rentals, an uncomfortable position as local support for tighter STR regulation grows.
Chloé Garlaschi, senior communications specialist for AirDNA, said there were 5,177 rentals listed on Hilton Head in February 2023. In February 2022, 5,315 rentals were available.
AirDNA gathers its data by monitoring listings on sites like Airbnb and Vrbo. It runs cross-checks to ensure properties aren’t duplicated.
As of March 14, Hilton Head revenue services manager April Akins said the town had received around 4,100 short-term rental permits and expected to have between 6,000 or 7,000 by the March 30 deadline.
That estimate aligns with AirDNA’s data, with the peak of available listings rising to 7,550 in August 2022. In 2021, listings also peaked in August with 6,629.
“We’re obviously going to be lenient in that,” Akins said, “we’re not going to run out and (immediately) start issuing citations. … We really have not had any concerns that we’re going to have to start enforcement soon.”
The town has made over $1 million from the permits alone to date, money that Akins said will go back to expenses related to the new ordinance like staffing, paying contractors and code enforcement.
Bob Bromage, Hilton Head’s director of public safety, said renters who run afoul of the ordinance could face a $500 fine once enforcement begins. A third-party contractor, GovOS, will monitor online listings and ensure the properties offered in town limits are permitted.
Residents push for more
Part of the town’s initial rationale for passing new regulation was the rapidly-increasing cost of living that has continually pushed low-income islanders and some lifelong residents to the mainland.
“It’s obvious. I do not have an agenda here, but short-term rental conversion on Hilton Head Island has affected the long-term rental options,” Town Manager Marc Orlando said at a September 2022 town meeting. “I have nothing against the rental market ... but that has affected a supply-and-demand issue on our island.”
Orlando and Town Council members have previously discussed other measures, like adjusting millage on property taxes, to dissuade renters from shifting long-term homes into the short-term market.
Further short-term rental regulation hasn’t yet returned to a Town Council agenda, but island residents are keeping the topic front-of-mind for the town planning commission. Many, including members of the expanding Jonesville Preservation Society, are asking officials to introduce more stringent measures.
JPS has suggested Hilton Head adjust the permit fees based on a property’s square footage, strengthen parking requirements and introduce a maximum floor-area ratio.
Ongoing efforts outside short-term rental control, like the Northpointe public-private partnership and SERG Restaurants’ pitch to convert abandoned office space into dormitory-style housing, are also still underway to address the island’s housing need.
