Several years ago, Eddie and Kay Coleman noticed that the property taxes on their Oakwood home—a century-old, two-story beauty just blocks away from the state capitol—seemed to be growing as quickly as the city itself.
The pair of real-estate brokers and developers hatched a plan: Their property included a small two-story apartment, built in 1947 for a son returning from World War II and his new bride, memorialized as “The Little Nest” on an engraving near the driveway. They would update the 400-square-foot, second-story loft into a cozy apartment and offer it, romantic backstory and all, to folks looking to visit Raleigh to work, play or even scout prospective places to live.
The Colemans, in effect, became some of Raleigh’s earliest adopters of Airbnb, one of several online services that allow property owners to rent their pads in part or in full directly to their guests. As the cost to live in the city increased, the Colemans could augment their income—and serve as a city greeting committee in the process.
“A good 75 percent of people using The Little Nest are coming from New York, Cleveland, Silicon Valley, Detroit and all over the Northeast looking at Raleigh,” says Coleman, who has since added a second Airbnb option in an Oakwood apartment building he owns. “They want to see what it’s really like.”
But the Colemans are one of around 400 Raleigh Airbnb landlords who worry about the future of their rental income. While the model has grown rapidly in recent years, other residents have expressed concerns about shortages of visitor parking, strangers wandering their streets, and effects on real estate prices. It’s a debate happening in cities and towns across the country, and Raleigh’s direction remains to-be-determined.
Since 2014, the issue has confounded Raleigh’s city council, which has repeatedly directed the city’s staff to explore short-term regulations in other municipalities and analyze Raleigh’s best approach moving forward. Some councilors have regarded Airbnb as a boogeyman, capable of upending the housing market and degrading neighborhood character; others have looked at it as a boon, especially as the city center becomes a special-event destination. There’s never been a very organized opposition to short-term rentals, says a city official, but, rather concerned bands of residents who want to make short-term rentals fit seamlessly within their neighborhoods.
Still, so far, that research hasn’t produced the necessary regulations, as the council has rejected two proposed ordinances that took different approaches to the question of short-term rentals. Those ordinances have suggested banning whole-home rentals altogether, requiring an on-site residential manager for most of the year, limiting the number of people who could occupy a bedroom and so on. Though short-term rentals are technically illegal in Raleigh because no laws expressly permit them, the city has suspended enforcement while the debate continues.
Right now, the future of that policy seems to depend on the deliberation and collaboration of a 16-member, council-appointed Short Term Rental Task Force, charged with sorting through the issues and emerging with a policy that satisfies those who rent and those who worry. They’re considering aspects like parking, city zones where short-term rentals are more appropriate and that vexing question of what to do with entire homes up for rent, a sticking point for the council and task force alike.
“There were elements of both versions of those ordinances that many people found palatable. You can take a little bit from version A and version B and find a little common ground. And that’s what the task force is trying to do,” says Travis Crane, the assistant planning director who will be gathering the task force’s feedback. “The crux of the issue for city council is understanding the impacts of this new use and how the city can manage those impacts.”
Brent Woodcox, who works as special counsel at the North Carolina General Assembly but co-chairs the task force as a volunteer, agrees that compromise is the goal. Some zones have more to gain (or lose) from short-term rentals, and those outcomes need to be considered in any policy. He doesn’t feel that the council will ban short-term rentals outright or turn them into a free-for-all; otherwise, he insists, the committee wouldn’t exist.
“When you’re trying to create an approach, you want to make sure you’re targeting the bad actors in order to weed them out,” says Woodcox. “And the law-abiding folks don’t get affected by overregulation.”
Since its start in January, the task force has met every two weeks to wade through these questions. They’re perhaps two months out from a consensus, Woodcox says, which will then go to city council for consideration. If the city council agrees, city staff will then use its findings to shape an ordinance that creates clear, but hopefully non-burdensome, expectations.
Coleman will be watching. For his part, he sees Raleigh’s possible embrace of short-term rentals as a testament to a progressive, energized and welcoming city. If the city interferes too much, though, he worries not only about his own bottom line but the area’s reputation at a time when it’s already taken international dings. After all, many of his renters come to Raleigh to scope the city as a future home, opting to stay in a neighborhood rather than a hotel. In The Little Nest, he says, the reviews—that is, of the room and Raleigh itself—are almost always positive.
“Raleigh has the opportunity to continue to be the town that says we don’t want to create any problems, and ‘welcome, y’all,’” says Coleman. “It’s important for us to maintain that image, and creating another situation where there’s another opportunity to tax and inspect and create regulations against something that’s not a problem is not good for that.”