At a council meeting Tuesday, council discussed the proposal crafted after several months of public input and committee-level discussion.
Short-term rentals currently are only allowed in commercially-zoned areas.
Representatives of The Point, a popular tourist destination, have lobbied against allowing such rentals in their neighborhood since the issue first arose.
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At least one council member said he had a problem with excluding a single neighborhood.
"I'm actually disappointed in the residents of The Point who seem to think it's separate from the rest of the city," Councilman Mike Sutton said. "I'm sitting here looking at the ordinance and thinking it's healthy for the entire city."
DeWitt Helm, a representative of The Point Neighborhood Association, said the group has "no desire to be anything but an integral part of the city."
"We just have real reservations about our neighborhood being anymore commercialized than it already is," Helm said.
If approved, the proposed ordinance would allow short-term rentals in primary dwelling units in all residential districts by special exception -- a process that requires approval from the city's Zoning Board of Appeals on a case-by-case basis -- except in The Point.
It also would allow short-term rentals in accessory dwelling units where the owner lives on the premises -- except in The Point -- but those would not require a special exception and could be approved by staff.
Each short-term rental owner would have to meet certain standards outlined in the ordinance, such as requiring a minimum two-night stay, providing adequate on-site parking and developing a property management plan, among other things.
If approved, the new proposal would close a debate that started last summer, when a couple sought to turn their house in the Northwest Quadrant neighborhood into a short-term rental but were sidelined when they discovered that the property's residential zoning didn't allow it.
Council likely will have a first reading and public hearing on the new proposal in coming weeks.
Follow staff writer Juliann Vachon at twitter.com/EyeOnBeaufort.