Chapel Hill Town Council establishes new regulations on short-term rentals

The Chapel Hill Town Council unanimously passed an ordinance on June 23 that establishes regulations for short-term rentals after two years of work.

The ordinance amends the previous version of the Land Use Management Ordinance which did not include or define STRs and therefore provided no standards for STR use.

An STR is now defined by the ordinance as a residence rented in whole or in part for less than 30 consecutive days.

Chapel Hill Mayor Pam Hemminger said STR operators will now be required to obtain a zoning compliance permit, and they will be required to pay a registration fee to ensure the Town collects necessary occupancy taxes. 

The ordinance also limits STRs to a certain number of street parking spaces, and renters must obtain a special event permit before hosting an event. Hemminger said signage that indicates the property is an STR is now prohibited, too.

According to the ordinance, a designated person must be available by phone within a two-hour window, and the number must be visible to renters. Additionally, all units must have smoke detectors and insurance.

Hemminger said she believes these new requirements are a huge step for protecting the community. 

“One of the things governments are supposed to do is keep people safe,” she said.

Back in June 2020, the council received a petition from the Chamber for Greater Chapel Hill-Carborro and local hotel managers requesting they establish regulations for STRs.

“They wanted us to take a look because according to our zoning ordinances, short-term rentals weren’t allowed,” Hemminger said. “We had never defined short-term rentals.”

Chapel Hill Town Council member Karen Stegman said a central focus was dedicated STRs, which are non-hosted investment properties used solely as short-term rentals. Dedicated STRs will be restricted to high-density, mixed-use or commercial areas in the town.

She said the ordinance provides an 18-month grace period for dedicated STR operators to dissolve their operations in residential neighborhoods.

“That really isn’t the intent of residential neighborhoods to have people coming and going all the time,” Stegman said.

Other concerns heard from community members included excessive noise and disruptive parking, Hemminger said.

To tackle these problems, Stegman said the council developed an STR Task Force composed of various community members, including hotel representatives, general Chapel Hill residents and STR operators.

“We wanted to make sure we were hearing from everyone involved or impacted by short-term rentals,” she said. “There were a lot of different perspectives it was important to hear from and understand before making any changes or decisions.”

John Quinterno, a Chapel Hill resident and STR Task Force member, said he believes the Town will have trouble enforcing these new regulations, but they are a step in the right direction.

"You can't enforce anything if you don't have a regulatory framework to begin with,” he said.

However, Quinterno said he is still satisfied with the final resolution as he thinks the operational regulations put in place will provide balance to the community.

Hemminger said despite the concerns with STRs, she believes they are an asset to Chapel Hill. 

“There is a need for this kind of homestay,” Hemminger said. “There are people who come here for medical reasons, coming in to look for a home. We’ve heard about different needs that aren’t as hotel-oriented.”

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