Here’s the Problem With Raleigh’s Dumb Airbnb Restrictions

Closing the book—for now—on what has often seemed like an interminable five-year debate, the Raleigh City Council passed strict regulations on short-term rentals like Airbnb last Tuesday. 

Starting January 1, whole-house rentals will be illegal throughout most of the city, and residents will only be permitted to rent a maximum of two rooms in their home to a maximum of two adults at a time. Moreover, those rooms cannot have a separate kitchen or privacy from the main dwelling, and homeowners must be living onsite. Those violating the new rules will accrue fines of $500 per day. (Exempt from the whole-house ban are five mixed-use districts, mostly downtown, where hotels are already allowed.) Rental owners will be required to obtain a $176 permit that must be renewed every year for $86.

It’s hard to describe how foolish this is. 

As Airbnb noted in a press release before the vote, it has seen 60 percent year-over-year growth in North Carolina, and taxes on its rentals pumped $24 million into state and local coffers last year. 

But Raleigh’s rules crack down on the very things that make the service popular: Short-term rentals offer privacy and space, and whole-house rentals can accommodate more people than fit into hotel rooms. 

Want to bring in the whole family for graduation? Right now, you can rent a North Raleigh townhome that sleeps six for $169 a night. Come January, that will be illegal. 

The bigger problem, though, is that the council simply refuses to listen. 

It’s been more than sixteen hundred days since the city cited Gregg Stebben for renting out his home on Airbnb, then decided to stop enforcing its Airbnb ban while it crafted regulations. There have been countless meetings and public hearings since. Each time, a vast majority of residents urged the city to adopt rules that, while reining in abuses, would allow them to rent their homes to generate extra income or give their families an affordable place to stay when they visit. 

The council didn’t care. 

What council members cared about were the horror stories they heard from a handful of residents who said their neighborhoods were being ruined by renters taking up street parking or throwing loud parties. Never mind that, since 2014, the city has only received thirty-seven complaints about Airbnbs, of which just twenty-three were deemed valid—about four a year. 

To be sure, Airbnb has been a mixed bag in some cities. In cities with tight housing markets and large tourism economies, short-term rentals have driven up housing prices. In response, several cities are tightening their rules.

But while that’s a convenient excuse for the Airbnb-phobic city council, that’s not the problem in Raleigh. The city isn’t a tourist destination—Airbnb’s biggest surge is graduation weekend—and Raleigh’s housing prices are skyrocketing because of the predominance of single-family zoning and the city’s reluctance to increase the housing stock by adding density. 

Rather, Airbnb disrupts the status quo. And like other disruptions to the status quo—electric scooters, accessory dwelling units, mobile retail—the council’s instinct is the same. 

No. 

In this case, council members Dickie Thompson and Stef Mendell have argued that neighborhood opposition has led to the city’s crackdown. But that opposition has been almost invisible throughout the debate. 

“If there are that many people in Stef Mendell’s district and that many people in Dickie Thompson’s district that are opposed to this, where are they?” Stebben asks. “We’ve never seen them.”

At a public hearing on May 7, for example, twelve people addressed the council on short-term rentals. Eleven spoke against the city’s proposed rules. 

The council delayed its vote on the regulations for two weeks because Thompson wasn’t there, and the pro-regulation camp needed his vote. 

As it turned out, Thompson had ideas to add: Allowing four adults to stay in a house, as was originally proposed, was too much, he argued. He suggested two. 

On a 5–2 vote, the council agreed. Nicole Stewart and Corey Branch—not coincidentally, the only council members under the age of fifty—dissented. 

The public never got a chance to weigh in. Not that it would have mattered. 

Those regulations didn’t cover whole-house rentals. They were still illegal in most of the city, but there weren’t plans to enforce the ban, as council members were still working on those rules. 

But immediately after the vote, Mendell moved to begin enforcing the whole-house ban along with the other rules on January 1. And while violators were initially going to be fined $100 a day, council member Kay Crowder thought that wasn’t enough: She asked for $500. 

Again, the council agreed, with only Stewart voting no. Again, there was no public input. 

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Contact staff writer Leigh Tauss at ltauss@indyweek.com. This story has been edited and updated for print. 

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