New Short-Term Rental Ban in Raleigh

After years of contention, Raleigh leaders have finally made the decision regarding home listings in the city on sites like Airbnb and similar homesharing websites. While it has always been technically against the City Code to list and rent properties within the city limits on these sites, city officials had long chosen not to enforce that provision unless there was a complaint, but last week that changed.

On Tuesday, May 21, the Raleigh City Council voted 5-2 to ban whole house rentals and to tighten restrictions on “homestays.”

While homeowners may still rent out one to two rooms in their homes, they must be living on property, apply for and receive a “Homestay Zoning Permit,” and inform their neighbors about the guests coming to visit.

Hosts are also now restricted to only “two adult guests and their minor children” staying in the house at a time, hosts must be present in the home when guests are present, and accessory dwellings separate from the main house may not be used as a short-term rental. Violation of these terms could cost homeowners up to $500 in fines per day.

“Residents of Raleigh who currently rent any portion of their homes as short-term rentals should review this new ordinance carefully,” advised Forrest Form attorney John Burns. “People generally expect to be able to manage their home as they see fit so long as they aren’t a nuisance to their neighbors. This action by the Raleigh City Council moves the bar significantly.”

In a press release last week, Airbnb reported it remitted over $24 million in state and local taxes in North Carolina in 2018, including city and county occupancy taxes. The company also reported that hosts in the Triangle earned $18 million, or an average of $6,000 per host.

Do you currently have your home listed on a short-term rental site or are you thinking about renting your home in the future? Consider consulting with John Burns to ensure you understand the policy and how it may affect your existing business or future plans. John can be reached by email at john.burns@forrestfirm.com or at 919-706-1389.