Council wades into rental fray, looks to future of RAD

REUSE IN THE RAD: Asheville City Council approved a hotel and retail project for this historic building at 95 Roberts St., but not without raising concerns about living wages and chain retail. Photo by Carolyn Morrisroe
REUSE IN THE RAD: Asheville City Council approved a hotel and retail project for this historic building at 95 Roberts St., but not without raising concerns about living wages and chain retail. Photo by Carolyn Morrisroe

Asheville City Council continued its quest to crack down on whole-house and whole-unit short-term rentals at its Oct. 24 meeting, asking staff to collect more data on all such rentals in the city, even in commercial areas where they are allowed.

Mayor Esther Manheimer pointed out that Asheville is not alone in grappling with the issue of a rise in short-term rentals that some worry takes housing stock away from long-term residents. She mentioned Portland, Ore., San Francisco, Boulder, Colo., and Austin, Texas, as “other great places that are squeezed by their greatness” that might serve as models for how to proceed. “There are definitely vacation-focused communities like coastal communities where this is the way it’s done, and that’s how people finance their vacation rentals,” she said, “I think we’re having this community discussion right now about our future and whether that’s the way we want to go or do we want to continue to be a community that serves long-term residents.”

The request came as Council got an update on enforcement of its ban on whole-house rentals for fewer than 30 days, such as offered through Airbnb and VRBO, in all residential districts and some commercial districts. Council requested the report at its Oct. 3 meeting, sensing that many homeowners rent their properties in violation of the ordinance. “There’s folks who are going to great lengths to maintain their illegal whole-house short-term rentals,” said Council member Gordon Smith.

Last November, the city contracted Host Compliance to help identify violations of the STR ban. It provides a monthly report with addresses and screenshots of all short-term rental listings. In July, the city transferred responsibility for enforcement of homestays and short-term rentals from the Development Services Department to the Planning & Urban Design Department.

Zoning Administrator Shannon Tuch said the overall number of identified STR listings in Asheville consistently hovers between 900 and 1,000. Rental of private rooms within a dwelling on a short-term basis is allowed with a valid homestay permit from the city. The report shows 548 active homestay permits in Asheville, and Tuch reported a swell in homestay permit applications after heavy enforcement of the short-term rental code.

This year, the city has issued an average of 42 violation notices per month, which the report states is down from a past average of 72. Staff chalks that decrease up to “a normalization of activity after a period of heavy enforcement” and reduction in resources due to the transfer of responsibilities to the Planning & Urban Design Department. Only 17 percent of the violations originate through citizen complaints; 83 percent are identified by staff using information from Host Compliance.

The report shows that 52 percent of violations are resolved by correction of the violations, such as changing the rental term to more than 30 days, while 21 percent end up getting homestay permits. The city says 9 percent of cases are in various stages of enforcement action, including being turned over to the city attorney’s office for legal action.

As new listings are identified, enforcement action is initiated, with generally successful results, the report states. “However, the inventory of listings is changing day to day, presenting new challenges for tracking and monitoring properties and cases,” the report continues. Staff expects the number of violations to go down as more property owners employ means to avoid detection.

Smith said Council needs to move beyond the report’s findings to explore actions to remedy the problem of illegal whole-house STRs. “I think one of the questions here that isn’t answered in the report is whether what we’re doing now gets us where we’re going or whether there needs to be more done,” he said.

Council seemed surprised to hear that staff is concerned about STRs proliferating in commercial districts. The report mentions an increase in the number of residential dwelling unit conversions to short-term lodging in commercial zones of the city, and a significant increase in the number of new residential projects being constructed for the purpose of providing lodging.

Tuch said staff is seeing developers of apartment and condo projects asking to switch at least some of the units to short-term rentals. “What’s kind of a new trend that we hadn’t seen before a few months ago are the number of what would be residential properties now seeking to come in and amend their applications to be lodging projects,” she said.  

Council asked staff to look into how many requests to change from residential to lodging the city has received, and how many units citywide exist as legal short-term rentals. “We just don’t have a feel for how big this is right now in Asheville,” Manheimer said.

Vice Mayor Gwen Wisler agreed with gathering more data but said Council needs to take action to head off the swelling numbers of STRs, even if staff hasn’t pulled all relevant data yet. “It has become a bit of a panic. I mean, I’m not panicked, but this isn’t good,” she said. “Citizens certainly sense that what you’re saying is happening and it’s happening rapidly, so I don’t think that Council can take a pass because we don’t have all the data in place. I would suggest that we move forward and we start studying this yesterday.”

What’s best for RAD?

Council had some tough questions for the developers of a property in the River Arts District, with Smith and Council member Brian Haynes pushing for a commitment to paying employees a living wage and including local businesses, rather than national chains, in the retail portion of the project.

Charlotte-based White Point Partners brought a plan to renovate a 1920s-era, 61,000-square-foot building at 95 Roberts St. into lodging with 70 guest rooms, 4,600 square feet of retail and a 60-seat restaurant. Parking would be provided off-site in the railroad right of way through a long-term lease with Norfolk Southern. The applicant requested a conditional zoning from river district to lodging expansion conditional zone to allow the hotel to move forward.

Jay Levell, a partner with White Point, said the group has partnered with a boutique hotel company out of the Northeast to operate the lodging but wouldn’t disclose which one. He said the firm is excited to work on renovating a historic building for modern reuse. “It’s a great building, great bones, love the character, that’s what we want to preserve, and that’s what we try and do with these old buildings,” he said. “You can’t make ’em like they did, and you can’t re-create it, so it’s really neat.”

Anna Toth, an artist and business owner in the River Arts District, said during public comment that she’s concerned about development in the neighborhood and she highlighted the economic contribution from artists. “As we diminish the integrity of that community and the availability of space to artists, then we will also diminish the revenues generated by that source,” she said.  

Other business owners spoke in favor of the renovation of 95 Roberts St. into a hotel. Pattiy Torno, owner of Curve Studios, said the River Arts District Business Association hopes the project will draw people back to the RAD from downtown. “I think that it is really important for Asheville’s long-term health that we have some alternatives to downtown in terms of different experiences that you are able to get when you come to Asheville,” she said. She also thinks the constant flow of customers that a hotel would bring to the area would help decrease crime.

Prior to a vote, Haynes expressed some reservations. “I would still like to hear some sort of commitment from the developers regarding wages and providing space for local businesses in retail. Everything else about this I like, but I’m hesitant to just take it on someone’s word,” he said.

“I really cannot make that commitment,” Levell said.

Smith laid out the concerns more frankly. “What happens if this turns into another minimum-wage, Anthropologie-laden stain?” he asked. “We don’t have any guarantee against that.”

Smith also said a previous plan to use the building on Roberts Street for housing fizzled out. “I think there might be more money in tourists than there are in locals,” he said.

He cited a report showing that in 2016, Buncombe County attracted 10.9 million visitors and suggested that Council should work to create a tourism plan. “We had almost 11 million tourists visit a town of 90,000 last year. It’s hard to wrap your head around,” Smith said. “We also currently do not have a cooperative effort with the Tourism Development Authority to do a single tourism study to determine what is our carrying capacity and how are we going to grow responsibly in regard to our tourism industry. … And so it’s a question, who are we going to be as a city?”

Council member Keith Young said he shared Haynes’ and Smith’s concerns about low wages being paid to employees in the building and chain retail coming to the space, but that overall the project would be a boon to the RAD. “We are supporting the artists that in the area. That’s an area that we have their economic interests at heart,” he said. “In this specific instance, the biggest winners of this the situation are the artists and business owners in the River Arts District.”

Conditional zoning for the 95 Roberts St. lodging, retail and restaurant project passed 5-2, with Haynes, Manheimer, Young, Cecil Bothwell and Julie Mayfield in favor, and Smith and Wisler against.

RAD hearings postponed

City Council was slated to hold public hearings on two other issues related to the River Arts District, regarding the form-based code and parking restrictions, but Council voted to continue those two hearings to the Nov. 14 meeting.

Manheimer, who is an attorney, came in late to the Council meeting and requested a continuation of those agenda items. “I have been made aware that there is a challenge to my ability to vote on the River Arts District form-based code overlay, and it requires me to consult with the Bar, but the question came up too late — I actually just received it —  for me to have an opportunity to consult with the Bar,” she said.

Buzz about Energy Innovation Task Force

An effort to solidify support for initiatives of the Energy Innovation Task Force, a joint project among Buncombe County, the city of Asheville and Duke Energy Progress, encountered a little pushback from some Council members.

Mayfield presented an update on the EITF, focusing in particular on its attempt to secure a grant from the Kendeda Fund for a weatherization program for low-income households. She also announced The Blue Horizons Project, a marketing campaign to get customers involved in bringing down their energy use.

Mayfield said it’s key that all three partners in the program — the city, the county and Duke — be seen as promoting the program. “If it is not supported by us equally and it is just viewed as a Duke marketing effort, I think we can all acknowledge that it will not be successful,” she said. “This is a place where the city has an opportunity … to commit additional resources now that we are at this implementation phase, to make all the work that we’ve been doing fruitful and successful.”

She asked Council to give informal assent for several aspects in relation to EITF including: one, assurances of a long-term commitment to the program and its tenets; two, applying more staff time to implement the communications plan; and three, $25,000 to go toward establishing a campaign coordinator position that would be housed at the Green Built Alliance.

Young said he hesitated to give more money to EITF than the $202,000 the city has already allocated. Wisler said she couldn’t support carving out more staff time for the initiative until they had a chance to consult with the city manager about the best way to divide staff resources.

Manheimer tried to summarize what Mayfield was asking from Council. “I think we have some tension around this commission because it’s a little bit of  stepchild in terms of the way it’s being treated from a city perspective,” she said. “I think what you’re saying is that to be more successful than it is, it’s going to need more robust staff support … and I think what you’re asking from us tonight is just to show our indication that there be more support shown for this commission from a staff perspective.”

Mayfield agreed with that assessment. “What I’m asking for you all to say is, ‘Yes, we continue to think that this work is important. We continue to think that this city as an entity ought to support it. And the city manager ought to put some staff resources toward it, as appropriate,’” she said.

While no formal vote was taken, it appeared a majority of Council members showed the general support for the EITF that Mayfield was seeking. Manheimer asked Mayfield to make sure that grant opportunities were exhausted to fund the $25,000 for a campaign coordinator before EITF comes back to Council with a formal budget amendment for that amount.

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About Carolyn Morrisroe
Carolyn Morrisroe is the news editor and city government reporter at Mountain Xpress. She can be reached at cmorrisroe@mountainx.com. Follow me @CarolynMorrisro

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15 thoughts on “Council wades into rental fray, looks to future of RAD

  1. Lulz

    LOL, let’s ban STR’s in neighborhoods and then complain when they pop up in commercial areas. LOL, the council buffoons simply don’t get it. People are not going to sit idly by while they approve greedy hotels and they themselves struggle. On top of paying higher taxes.

  2. Deplorable Infidel

    hmm, probably most of the 11 million visitors did NOT stay within the city limits of AVL …

    • hauntedheadnc

      WHY would you THINK that, Mr. Caudle? I’m CURIOUS, especially CONSIDERING that the vast majority OF hotels IN Buncombe COUNTY are located within THE city LIMITS of ASHEVILLE. If the tourists are AVOIDING Asheville, where ARE they staying? Are THEY camping, PERHAPS?

  3. Deplorable Infidel

    …and in the whole realm of AVL housing , still NO action from council to DEMAND respect and accountability FROM the management of the federally protected and mandated Housing Authority of Asheville with required CITY oversight. Gene Bell should be embarrassed and ashamed of too much public housing for a city this size. He NEVER takes ANY accountability, nor responsibility for all the emanating crime that the rest of us must endure in this city. We need LESS public housing not more. It’s the biggest problem in AVL. Downsizing and mainstreaming should be the goals of HACA.

    • luther blissett

      Asheville should have a lot more public housing, in property directly owned by the city, as a bulwark against greedy landlords. The city should not be begging and offering inducements for a few years’ worth of “affordable” housing from private developers.

  4. Austin Hill

    It is my impression that Wisler has accepted money from the TDA, or the the Asheville hotel lobby. If that is the case she has some conflict of interest here. The city has implemented common sense regulations for dealing with STR’s. The fact that this agenda is still being pushed makes one wonder how far the TDA has infiltrated and influenced Wisler, Smith, and Manheimer, and whether the end game is to ban STR’s altogether so that the hotels can catch up to their projected occupancy goals, which they are lagging behind right now. The TDA is not looking out for Asheville, they want to turn it into Beer Disney with traffic like L.A. STR’s are kicking the hotels butts because they offer a more authentic Asheville experience, and hey people aren’t stupid, THEY KNOW $200 FOR A SUPER 8 IS A RIP OFF!! Boo hoo TDA.

    • luther blissett

      Maybe, just maybe, there is just about a majority in City Council (or will be in 2018) that appreciates how the city’s population is divided down the middle between property owners and renters, and that AirBnB in Asheville isn’t simply competing with hotels, it’s competing with long-term renters being paid Asheville wages.

      The situation in the RAD is weird because you have a bunch of artists like Pattiy Torno who put sweat equity into their property and are sorta kinda hoping for some kind of return on that, whether in terms of visitor traffic or ultimately selling up like Mitch and Jolene Mechanic. They’re not in the same boat as landlords like Chris Peterson, but they are navigating the same stream.

      (It’s sad that The Junction is selling up: it’s a great restaurant, but its owners and the RAD in general got outflanked by the rapid gentrification of the South Slope for beer tourists. Turn back the clock five years or so, and Depot Street was a much bigger and pleasanter draw than the lower end of Coxe Avenue. It just never established itself as much as was expected.)

      • Lulz

        Substitute taxes in there and you might have something. Higher taxes means higher rents but that’s OK because God government is the one calling for it lulz.

        • luther blissett

          So if your rental property’s market value has gone up a quarter-million bucks over the past five years, it’s right and proper to soak renters for the couple of thousand in property taxes?

          • Lulz

            Why would any owner eat the higher taxes? What’s the point of renting your property if you have to pay for the higher taxes yourself? That’s the way it works. But by all means you charge 500 a month for a house and see where it gets you.

    • Lulz

      And Wisler was just endorsed by……………Kapoor. Smells already considering that Kapoor is running on an anti-STR stance.

  5. moderncrooks

    i love how the city is just standing by waiting on data to pile up, meanwhile people that live here can’t afford to live within the city, unless they get an airbnb stipend. its also a great idea to let the TDA keep walking all over everyone, and not giving back anything to the community they’re taking advantage of

    • luther blissett

      I hold no torch for the TDA, but the RADTIP grant was very smart politics that will probably stifle any move towards renegotiating its controlling statute.

      I would like to know whether the “can’t pay property taxes without AirBnB” contingent actually exists — it has the whiff of the family farms allegedly broken up by the estate tax — and if so, whether that group has greater influence than the “can’t afford the rent increase because my landlord would prefer AirBnB weekenders” population.

  6. Lulz

    LOL, depleted how? No that would mean thousands of houses are STRs. The demand is being met by wealthier people. It’s called GENTRIFICATION. So you end up with higher prices and higher rents because you FORCE people out.

    Free market means freedom. You people are the last and least qualified to understand that. If Asheville were a free market, it wouldn’t ban STRs. It would allow them to compete with the hotels that the establishment such as yourselves seem to be on the side of. And the lies of competing with rentals is absurd when multiple people have to pool their resources just to afford the costs. Which are increasing because you people think sticking homeowners with higher taxes is the free market.

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