Everything You Need to Understand About Short Term Rentals in Asheville
Short-term rentals (or rental homes) is a term used for a house, or some part of a home, which is rented out for short terms. While the term is widely used to include other types of rental properties, in Asheville, some may refer to them as "vacation rentals" or Airbnb properties in reference to the most well-known booking platform. In the Asheville area, we see many different styles of short-term rentals. They are not limited to single family homes in neighborhoods, but can even apply to rooms, wild cabins, and other varieties throughout the city.
Short-term rentals in Asheville have become increasingly popular in the past few years. As Airbnb, Vrbo, and other booking platforms have grown in popularity , more and more visitors to Asheville are looking for a personal touch and unique experience when traveling to Asheville. Average hotels are not likely to have an epic mountain view from the property itself, personalized experiences, or a location on a river. What people are looking for is the ultimate vacation experience when in Asheville, and short-term rentals provide those opportunities. People are coming to Asheville for outdoor adventures, cultural experiences, and food exposure, and visitors want to be a part of that experience. Many rental property owners promote great restaurants, activities, and attractions in their areas, preparing a personal, fun experience for guests.
Current Asheville Short Term Rental Laws
Current Legal Regulations for Short Term Rentals in Asheville
To operate as a short term rental in Asheville legally, you must abide by all city and state laws. Many of these laws will be based on where your property is located, but they also have various city-specific criteria as well. The following is a list of regulations you will have to comply with to list your property.
You must have an occupancy license for this permit. These licenses are then used to track the number of rentals a property is being rented out on a yearly basis. This means that you have to pay attention to exactly how many rentals you’re taking on each year. This is not unlike a normal license for running a business in the civic jurisdiction, and you must be up to date on all applicable taxes.
In order to legally complete short term rentals in Asheville, the property will need to be inspected by a code enforcement official. This inspection will cover things like fire safety and the number of available exits in the home in case of a fire.
This involves registering your property with the city of Asheville. In order to obtain a short term rental permit, you’ll need to have several documents filed:
Once you have registered your property with the city, you will need to carry a $2 million liability policy on the property. This is largely designed to prevent risk, by providing funds in the event of an injury or death on the property.
A parking pass will also be required, which you will get once you have obtained your short term rental license. This allows people to park while using your home, but make sure that there are no other restrictions such as requiring a driveway or other similar setup that must also be in place.
You’ll also need to submit a tax certificate to prove that all of your taxes are paid for the property. Most of these taxes will be listed below.
Permit and License Requirements for Short Term Rentals
To be a host in the Asheville short term rental program, it is necessary to obtain both a used oil collector permit (if applicable) and a rooming house license. For most people, that means obtaining the rooming house license.
To apply for the rooming house license, the host must complete an application form. The application isn’t short. It contains five pages of detailed questions, including information about the property, the property owner, the host and all of the other businesses owned by the host. One example of a tricky question is a request for disclosure of all employees and contractors who work at the property. The application requires that any contractor who is utilized for short term rental host purposes have a valid Hampermits.com account. Be aware that Hampermits.com requires the contractor to pay for a waste generator account before the contractor can even register with Hampermits.com.
The fee for the license is $300. The application must be submitted with the fee to the City, which will then issue the license if the application meets all requirements. The license must be renewed every year, except in the case of anyone who obtains the license for each property owned by a company owned by the host. That license expires on December 31 of each year, and may be renewed for as long as the host owns the property.
The City offers no guidance regarding how long it will take to obtain the license and set up the Hampermits.com account. My best guess is six weeks or longer. I would suggest starting the process as early as possible.
Zoning Restrictions and Regulations
In addition to the restrictions and requirements imposed by the ordinance itself, short-term rentals must also be located in zoning districts that permit their use. Those zones are the D8, D8A, D8B, D9, and D10, all of which are located in the city’s Central Business District ("CBD"). Sections of the D7 and D7S zoned areas of South French Broad within the Central City East Riverside and East West Connector Area also qualify for compliance with the definition of rooming house. To put it simply, short-term rentals may not be within residential districts such as the Residential One (R1) or Residential Two (R2) or other areas of the city including the River Arts District, North French Broad and Hillard Avenue neighborhoods.
The boundaries of the CBD are determined by the city’s Center City Plan, a land use plan first adopted by the City Council in 2002 subsequently amended in 2005 and most recently in 2014. As previously mentioned, this plan is located in the Downtown Master Plan Design Guidelines, which are divided into individual sections. A few relevant sections to note are below along with a screenshot of the map that illustrates the overall area.
Effect of Short Term Rental Laws on Hosts
The myriad of government regulations are often labeled as bureaucratic red tape and burdensome control of private property. But controls over short-term rentals through zoning ordinances, planning and development codes, and various licensing and registration requirements actually have the ability to limit competition among short-term rental providers and create opportunities for compliance from law abiding property owners.
In fact, Asheville’s regulations favor the owners of properties already in compliance with state and local laws over transient vacation rentals that push the limits on zoning ordinances. For example, while a ban on rental listings websites publishing advertisements that violate local zoning codes would benefit existing short-term rental companies , it would also ensure that new companies providing short-term rentals with fewer eyes on the regulatory process will face more barriers to breaking into the market.
Similarly, the requirement that allows short-term rental hosts to only rent one private residence – in most cases the homeowner’s primary residence – to tourists at a time prevents many property owners from taking advantage of the oversight created by the regulations. In many ways, the limitation on one short-term rental per person is the most important part of the law for keeping illegitimate investment properties out of the market. Well-managed properties by one host will be generally treated better and face less impact and regulation than managed properties by several hosts under one "family" operation.
Consequences for Not Following the Laws
The City will monitor the veracity of active listings and may commence enforcement action to ensure compliance with the new short-term rental provisions. In addition, a person who advertises or offers a short term rental that is not registered, or who provides false or misleading information in connection with a registration is guilty of a misdemeanor punishable by a fine not to exceed $500.00 or imprisonment not to exceed six months. The property owner or host can be charged with this misdemeanor crime. The City may revoke or suspend the registration and the remedial actions that the City can take to enforce the law include rescinding an active listing, an administrative citation, or possible petitioning for an injunction. These enforcement measures are both civil and criminal in nature; meaning they might not only lead to monetary fines but possible jail time as well.
Future Developments / Updates on the Laws
It would not be an accurate portrayal of Asheville and its rental market if I did not include a discussion on the many proposed changes to STR laws in the area. In 2016, there was a proposed change in the definition of vacation rental, in that it would be defined as "a single family residence or unit included separately on a common bill of sale or rental for sleeping accommodations." This change effectively eliminated the requirement of being the primary residence in order to list a room, and would have been a very positive change for guests, but unfortunately failed to pass through City Council. The failed proposal remains online, but as of yet, their has not been a new proposal to comment on. It is still an issue that we would like to see changed. However, even with no residency requirements, listing an entire home is still a stretch. As a result of the 1% transfer tax in Buncombe County (colloquially known as the "meals tax") the City has begun the process of proposing another increase to the occupancy tax . Asheville has one of the highest occupancy taxes in the state, and it would be very disappointing to see a tax increase, as it is the guest who ultimately pays the tax, and the tax has resulted in a large increase in the cost of rentals in the areas where the tax is available. For example, transient customers of home2 suites have a 6% occupancy tax in Davidson County, compared to our 7% tax. It seems only fair that the tax in the county be 4% based on that fact alone. As it stands we do not know what proposal will be made. These changes have the potential to have very drastic effects on the rental market and the local community. As mentioned previously, while short term rentals are a great way to connect with people, it is an enigma that locals are learning to live with. If residents are unhappy with a transient local lifestyle, the short term rental industry could begin to hurt our beloved city. Keeping our long term rental market afloat should be a priority, but so too should be attracting quality tourists into our great city. Hopefully, by working with our community leaders, we can find a solution that helps meet both objectives.