Communication

We were surprised and deeply disappointed to read the recent letter from Old Edward Hospitality Group’s (“OEI”) President and Managing Director Richard Delany. His letter reflected an ignorance of the facts, and worse, a blatant encouragement for others to violate existing law for OEI’s economic benefit.

Short-term rentals have not suddenly become illegal. Overnight accommodations, which are classified as a Commercial Use in the Town’s Code, have been banned in our residential neighborhoods at least since 1982. (In neighborhoods zoned R-2, overnight accommodations are allowed only with a Special Use permit, and only with a resident or manager onsite. Read: no whole house rental.)

If overnight accommodations are so scarce, then OEI is well positioned to fill that need, and judging by their past expansion, could easily do so. In fact, Old Edwards Hospitality Group or its affiliates currently own several large parcels of land, including 23 acres off of Arnold Road, 77 acres off of Stoney Creek Road, and more than 6 acres on the Dillard Road at the old Mill Creek Lodge site, which is currently zoned for commercial use (hotel, motel, or tourist home). Since this formerly was the site of a hotel, it seems perfectly logical that OEI could build some of the extra hotel rooms they claim they “need” right there.

Instead, the OEI business plan prefers for others to bear the expense and risk of excess rooms—in prosperous times, STR’s help OEI with plenty of overflow to serve their wedding guests; but in an economic downturn, they can avoid the risk of carrying excess inventory. Brilliant. For them.

This is no “knee jerk reaction” by the Town in response to a vocal minority. To the contrary, our neighbors and neighborhoods are coming together as a single voice. In neighborhood votes and surveys happening across our Town, the vast majority of our residents do not rent short term, do not want the homes on their street turned into full time short-term rentals, and do not want to be a part of OEI’s, or anyone else’s, business plan.

Residential neighborhoods in Highlands are the backbone of the Town. Indeed, preserving our neighborhoods is a key component of the Highlands Community Plan. A peaceful, residential environment is what makes Highlands special and desirable. Take that away and we are nothing but another Gatlinburg. Is that what you and OEI want?

Thousands of homeowners in Highlands purchased their property relying on the protections provided by the Code. What about our investment Mr. Delany? Does only the investment in residential housing that benefits OEI matter to you? You obviously know how damaging short-term rentals are to a neighborhood, because OEI has chosen to ban them in its own residential developments. If it’s that important to the buyers of OEI’s high-end homes surely you and OEI would want that for the rest of our neighborhoods.

What about the support and contributions to the Bascom, The Performing Arts Center, the Hospital, the Food Pantry, the Botanical Garden and others? Are the hotel guests and short-term renters going to support these organizations when we are gone? Of course not.

Until now we believed the OEI was trying to be a part of the community. Through the years, Mr. Williams and OEI have contributed generously to many causes. However, when the character of the town is at stake, Mr. Delaney is siding with investors and nightly renters over neighbors. When money-making motives are laid bare, the OEI is no better than investors who snap up houses in residential neighborhoods to turn them into mini hotels at our and the Town’s peril.

Mayor Taylor and the Board of Commissioners, we are proud of you for upholding our current Code, and we beg you to please save our Town.

Lila Howland, Bill Long, Carol Gable and Mike Magaha

Folks around the country have been coming to Highlands and the surrounding areas for years. Most are great neighbors, add value to our community, and help our local economy. But in the last few years, that has changed. Increasingly, local real estate agents that once sought potential homes for families eager to put down roots in our wonderful community, now commonly represent investors who have no intention of ever living in the houses they purchase. Instead, these homes will be rented out, full time, by the night, and in doing so, are forever changing the face of our neighborhoods and our Town.

What were once sleepy Highlands’ neighborhoods, known as havens for those seeking the peace and quiet associated with living in the mountains of North Carolina, are now fast becoming just another part of the destination wedding industry. Our new “neighbors” are bachelorette parties, fraternity get-aways, and family reunions who check-in and check-out, just like any other hotel guests.

Think of the good side, we get to learn new words like homesharing, hotelification, and occupancy tax. Our new “neighbors,” following the money, do things like 1031 exchanges, create holding companies, form LLCs and REITS, all to voraciously acquire homes in our neighborhoods and convert them into mini-hotels. With nothing more than an app and a website, they can partner with multibillion-dollar companies like Airbnb and VRBO to monetize their inventory by offering to rent by the night for as many days as there are in the year.

Initially, of course, this drives the price of housing up. And correspondingly, it raises the price of renting long term, that is, if you can find a house to rent long term in our Town. You know, it’s that whole supply vs. demand thing.
Highlands is hot. We are in demand. And so are your neighborhoods. Or what’s left of them. But at what cost?

Instead of giving in, Mayor Pat and the Town Commissioners have joined a growing list of communities seeking to preserve its neighborhoods, its sense of community and peace, and to ensure that affordable, accessible housing remains available for long-term renters and home buyers who value real, thriving neighborhoods over a hollowed out collection of mini-hotels. Join this effort. Speak up before it’s too late. This is the true effort to Save Highlands.

Bill Long

Dear Mr. Mayor and Commissioners,

Thank you for listening patiently on Thursday night to the arguments and stories of Highlands residents whose residential neighborhoods have been so badly damaged by short-term rentals (STRs).

There were speakers for our side (i.e., people asking you to enforce the Town’s UDO); and speakers for the other side (i.e., people asking the Town to continue to tolerate STR’s where the UDO clearly does not permit them). You listened to everybody, and we appreciate that.

However, if you noticed, those asking you to enforce the current UDO had legal, policy, and personal arguments, such as:

• Legal: As demonstrated by Charlie Nalbone, Bob Irvin, me, and others, the UDO clearly and specifically classifies “Overnight Accommodations” as a commercial use, and the State of NC clearly and specifically classifies any rental of a residence for 90 days or less as a retail business subject to the State sales tax identical to hotels/motels, which is then subjected to the County’s Occupancy Tax. The Town’s UDO just as clearly and specifically prohibits commercial uses in R-1, R-3, and R-2 zones (except, in the latter, by special use permit).
• Policy: The explosion of STRs (from 65 in 2017, to 433 in 2019, to perhaps 1000 by the end of 2021, as demonstrated by James Worrell) in established Highland’s neighborhoods threatens to hollow out the neighborhood core of the Town, as long-term residents – both full time and seasonal — will flee what is becoming merely a collection of “hotel neighborhoods” surrounding a commercial core. Is that really the kind of Highlands we want?
• Personal stories, as attested by many people, from many neighborhoods: Noise, partying, overloaded septic systems, garbage, vandalism, drunk driving, fear for little children’s safety.

By contrast, those wishing you to continue to not enforce the current UDO had only personal stories, such as: “Our guests are good people”; “We want to be good neighbors”; “We’ve only gotten 3 [or 6, or zero, or whatever the number] complaints/police calls at our houses”; or, “We need to rent our house short-term now because we can’t afford it otherwise”; or, “We got our house in a tax-free 1031 Exchange, so we have to rent it.” (The 1031 Exchange argument, used by two of the six speakers, was especially nonsensical since this is basically a property required to be used as an investment and/or for their trade or business. Yet they go on to claim it is not a business or a commercial use.)

In other words, the other side had no legal or policy arguments. Their position essentially was that the Town should let them keep violating the law, because that benefits them, and it would be bad for their business and an economic hardship if the law were enforced.

The “other side” threatened that if you even start regulating STRs, “a lot of people will go offline and you’ll have a harder time with them”; or they will “go to Cashiers”; or they will “sell their [absentee-owned rental] houses, driving down prices” – which, incidentally, might turn out to be a good thing because it might result in more affordable housing, both for purchase and for long-term rentals. Nor did they respond to the many problems with short-term renters that we mentioned in our personal stories; they just said, in effect, “well, those can’t have been our renters, because many of ours are well-off doctors and lawyers.”

Even though our position is often mischaracterized, it is important to note that we are only addressing short-term rentals in the Town of Highlands in Residential neighborhoods where they are specifically, and currently, prohibited. We certainly do not want to ban longer-term rentals, which have always been an integral part of Highlands. We are not even asking you to ban short-term rentals where they are allowed. We are asking for status quo, not for anything new or special. Additionally, those who chose to place their investments illegally in areas where it is prohibited should not be allowed to claim a subsequent hardship, or a grandfathering right, when the town enforces the existing ban.

In conclusion, at your meeting on Tuesday, August 24th, we ask that you vote to direct the Town staff to enforce the UDO and the current ban on overnight accommodations in zones R-1, R-2 (except with special permission), and R-3.

We ask that you do this as a simple matter of following the law.

We ask that you do this as a matter of fairness to the residents who bought their homes in reliance on the Town’s zoning ordinance.

We ask that you to do what is right for the Town of Highlands, to protect and preserve our neighborhoods and the community most all of us want in the future.

We ask that you do it Tuesday afternoon, whether or not you are considering some additional action which you might take in the longer term, something which requires you to run through a process that will take weeks or months. This is because, while the Town did not plan for this explosion of STRs, it is the Town’s failure to enforce its own law that is allowing this to happen. Doing nothing for some period of time is not neutral—in fact, it is, and has been, siding against the neighbors and neighborhoods, as it will allow more and more STRs to get up and running and continue to damage Highlands’ neighborhoods, perhaps irreparably.

Thank you for your consideration.

Sincerely yours,

William E. Long III
President, Dog Mountain Property Owners Association

RESOLUTION, Adopted by Unanimous Board Vote, August 6, 2021

WHEREAS, Dog Mountain Road is part of the Town of Highlands, and in a neighborhood zoned R-1;

WHEREAS, the Dog Mountain Property Owners’ Association and its residents are governed by and rely on the Town’s Unified Development Ordinance (UDO) for the protection of their quality of life, quiet enjoyment of their homes and preservation of their property values;

WHEREAS, the Town’s UDO in Section 6.5 specifically states that an “Overnight Accommodation” is a Commercial Use;

WHEREAS, short-term rentals are overnight accommodations and as such are commercial uses which are therefore prohibited in R-1 Neighborhoods;

WHEREAS, notwithstanding that short term rentals are illegal and prohibited on Dog Mountain under the UDO, certain Dog Mountain property owners as well as other business operators are engaged in this illegal commercial activity on Dog Mountain to the detriment of the quiet enjoyment, quality of life and property values of the residents of Dog Mountain;

NOW, THEREFORE, BE IT:

RESOLVED, that the DMPOA Board finds that it is in the best interests of the Association and its residents that the Association take formal action against any short-term rentals (rentals of less than 90 days) occurring on Dog Mountain;

RESOLVED FURTHER, that the officers of the DMPOA be, and hereby are authorized, empowered and directed to take any and all action to cause the current illegal short term rental activity on Dog Mountain to be shut down including, but not limited, to: reporting to the Town Manager any and all such violations of the UDO relating to such illegal short term rentals; demanding that the Town issue cease and desist orders and impose fines against any property owners whose properties are being used for short term rental; engaging legal counsel to take any and all actions to shut down short term rentals on Dog Mountain; and calling the police where necessary to stop secondary offences such as speeding, vandalism, excess noise, trash, etc.;

RESOLVED FURTHER, that the Board hereby authorizes, empowers and directs the officers of the Association to communicate this information to all current and prospective property owners on Dog Mountain by both written and verbal communication; and

RESOLVED FURTHER, that the Board hereby authorizes the officers of the Association, and each of them, to take such other actions as they may deem necessary or appropriate to affect the intent of these resolutions.

Press Release
August 24, 2021
The Dog Mountain Property Owners Association and our residents are gratified that the Town of Highlands has made dear that short-term rentals are a commercial use and, as such, have always been prohibited in the R-1 zoning district. We are very appreciative that the Board of Commissioners have instructed the Town staff to enforce the law. This is simply a mane-r of fairness to the residents who bought their homes in reliance on the protections of the Town’s zoning ordinance. To be clear, we are-not opposed to short-term rentals, but they should be located in our commercial and business districts, just like other overnight accommodations. We understand the Town’s thinking in delaying enforcement so that those who are currently violating the law may bring their conduct into compliance with the law.
The Town of Highlands Community Plan stresses the importance of protecting and preserving our single-family neighborhoods as a vital part of our community. Indeed, they are the foundation of a successful town where there’s a place for everyone. The Board’s decision to enforce the current law will help ensure this protection.

Bill Long
President, Dog Mountain Property Owners Association