Wilmington City Council’s final Tuesday vote on short-term rentals allows whole-house rentals in residential zones with some restrictions, a compromise that received mixed reviews from locals who have been involved with the issue since the beginning.

The restriction states that establishments eligible for whole-house lodging should have a separation distance of 400 feet, and up to 2 percent of homes in residential districts can do short-term rentals.

The ordinance also states that a local operator should always be available and within 25 miles of the property.

Last year, the city council allowed “homestay” rentals, where one or two rooms in a house are rented with the owner present, in all residential and some commercial and mixed-use districts. Whole-house rentals were allowed in some commercial and mixed-use districts.

“They are going to spend hundreds of thousands of dollars on software and manpower to attempt to enforce something that has never been shown to be a problem by their own statistics,” said David Billitto, owner of vacation rentals Suites on Front.

Billitto, who has managed short-term rentals for more than 15 years, said the restrictions have the potential to affect some members of the short-term rental community, forcing some to continue to operate without registering their short-term rental properties.

“We're going to continue to have short-term rentals in Wilmington, much of which will go underground even though they're allowed,” Billitto said. “If you look at Asheville where they outlawed, there's hundreds and hundreds of vacation rentals up there that are illegal, that are continued to be rented every day. If the demand's there, people are going to figure out a way to do it.”

Sylvia Kochler, former president of Residents of Old Wilmington, said in an email that she was upset with the new regulation.

“I support most of the new short-term rental regulations, including unlimited numbers of STRs in business and mixed-use districts, as well as the registration requirements, like the requirement that STRs carry commercial insurance and comply with applicable building and safety codes,” Kochler said. “However, I am disappointed that the regulations permit whole house short-term rentals in residential neighborhoods as that depletes the supply of residential housing available for Wilmington's residents and undermines residential zoning.”   

While she appreciates the restrictions established for whole-house rentals, Kochler said the city should now focus on enforcing them.

“Otherwise, short-term rentals will continue to exacerbate Wilmington's housing shortage and harm residential neighborhoods,” Kochler said. “Regulation is the key to whether the compromise Council has crafted will work for Wilmington's residents.”

According to AirDNA.co, there are 602 active rentals in Wilmington, with about 68 percent of those being whole-house rentals. Since 2010, there has been a 42 percent annual growth in the total number of rentals in the city.

The new regulations will open the door to continue having conversations on how short-term rentals should be regulated, Billitto said.

“My guess is as we continue to go forward and the sharing economy becomes a bigger piece of how we live, work and how those lines blur, it's just going to be revisited in the coming years,” Billitto said.