Except for a minor technical clarification, Asheville City Council voted on May 17 to leave the current homestay ordinance unchanged. Since December, Council has studied the possible impact of expanding the city’s homestay short-term rental program to include separate living quarters like garage and basement apartments. Last night’s 4-3 decision — with Council members Cecil Bothwell, Brian Haynes and Keith Young voting against restricting homestays to bedrooms within a primary residence — upholds the status quo for now, but establishes a new task force to continue exploring the issue.
A homestay is a type of short-term rental in which a homeowner or long-term resident rents no more than two bedrooms in their primary residence to guests. The resident must be present during the rental. City Council expanded the homestay program on Nov. 15 last year to make it available to a larger number of city residents.
Renting out a whole house or a separate living unit on a short-term basis is not permitted in the city. Violators face fines of up to $500 per day.
While earlier discussions about Asheville’s rules for rentals of fewer than 30 days have encompassed a wide range of topics, the May 17 public hearing crystallized around the concerns of homeowners and long-term tenants who say they depend on income from renting an accessory unit to short-term guests.
Many of those in Council chambers wore green stickers with the letters “ADU,” an abbreviation of the technical term “accessory dwelling unit,” which encompasses basement and garage apartments, backyard cottages and in-law suites. The contingent of sticker-wearing advocates for expanding the homestay program to allow the use of ADUs included Five Points resident Helen Powell-Busch, who said she and her husband are building a garage apartment they hope to use as a homestay. Powell-Busch works with a nonprofit and her husband works in the service sector. “Don’t solve the affordable housing crisis on our backs,” she urged, saying that she ought to be able to use her property in the way that best suits her family. Powell-Busch also argued that property owners should be able to participate in the financial benefits of the city’s successful tourism industry.
While the sticker-wearing coalition of homestay advocates was a large one, more commenters spoke against the proposed expansion than for it. Opponents of the change said that allowing commercial activity in residential neighborhoods would undermine neighborhood cohesion and character and would reduce the availability and affordability of housing in Asheville’s tight real estate market. North Asheville resident Grace Curry was one of those urging Council, “[if you have] an interest in keeping some semblance of traditional neighborhood flavor, take more time to study the issue” before expanding the homestay program. Jane Mathews, a local architect who has frequently commented in the discussion surrounding short-term rentals, reminded Council that it loosened restrictions on building ADUs just last year. That decision, she said, was touted as a strategy for increasing the supply of affordable housing. Allowing those units to be used for short-term visitors would be inconsistent with Council’s declared justification for liberalizing ADU policies, she said.
“Reasonable people can disagree on this issue,” commented Councilmember Gordon Smith, before going on to argue passionately that any measure that might reduce the supply of housing in Asheville’s “historically severe housing crisis” would be “unconscionable, reckless and irresponsible.” At the same time, Smith continued, he understands that some people need the income from renting an ADU to short-term visitors to pay their mortgage. “I don’t want anybody kicked out of their house,” he said, advocating for the creation of a task force to determine ways that a limited number of ADU owners might be able to use those units as homestays. He urged a “patient and cautious approach,” and predicted that the city “will be doing policy around this for decades to come.”
Councilmember Cecil Bothwell expressed concerns about the impossibility of controlling an internet-based market at the local level. Allowing ADUs to be used as homestays, he said, would allow the city to understand the scope of and regulate the activity.
Keith Young, who took his seat on Council in December and was one of three Councilmembers who had not previously spoken on the STR issue from the Council dais, said he found it hard to limit the use and enjoyment of homeowners’ property by restricting homestays to the primary residence. On the other hand, Council has a duty to regulate some uses and minimize disruption to neighbors. In his view, Young said, the ongoing discussion surrounding STRs has been “a battle of wills among middle- and upper-middle-class homeowners. If you own a home in Asheville,” he continued, “you are de facto middle class.” Thus, Young said, he remains skeptical of arguments that focus on the financial struggles of Asheville homeowners, since those citizens who struggle the most financially are not in a position to make use of the homestay program in any form. He said he would vote against the motion “with hopes we can come up with something different.”
Mayor Esther Manheimer responded that she does have concerns about people who bought homes years before Asheville’s current real estate boom and now find themselves struggling to remain in the city. Manheimer said she is comfortable with the homestay program because a long-term resident is on-site during the visit to address any issues. At the same time, she continued, “a go-slow approach is a lot easier to manage than opening it up and later trying to rein it back in.” Manheimer mentioned a variety of potential approaches to allowing a limited number of ADUs to be used as homestays, and supported the formation of a task force to consider the best strategies.
Manheimer called for a vote on Smith’s motion to deny the proposed change in the homestay program and to create a task force for further study of the issue. Council passed the motion on a 4-3 vote, with Bothwell, Haynes and Young opposed.
Bothwell then suggested that the city suspend enforcement of the prohibition against using ADUs as homestays until the new task force could present recommendations to Council. City attorney Robin Currin advised that failing to enforce its own laws could open the city up to legal challenges. “Why would you let some people violate the law and not others?” she asked. Bothwell conceded the point, but said he was concerned about “leaving people hanging” for an additional six months or longer.
After determining that the Council’s Governance Committee will hold a special session to appoint the special task force, Manheimer said, “I think we’re done with this item. We did it, it’s sort of unsatisfying.”
Council heard a presentation on the Asheville in Motion transportation plan. Former Asheville Mayor Ken Michalove asked the price tag for the consultants who prepared the plan. Transportation Planner Mariate Echevery responded that the cost was $336,000, $200,000 of which came from a federal grant. The balance of the cost came from the city’s general fund. Council voted unanimously in favor of adopting the plan.
The proposed city budget was the next item on Council’s agenda. Barbara Whitehorn, the city’s finance director, reported on changes to the budget since Council’s last meeting on May 10, which included shifting $800,000 in unallocated funds to offset Lee Walker Heights redevelopment costs, adding $2,000 for a Festival of Neighborhoods event and adding $106,000 for new staff and equipment for enforcing short-term rental regulations.
Three commenters, including the Rev. Amy Cantrell of the BeLoved Community, spoke in opposition to budgeting money for a new crime analyst position at the Asheville Police Department. Smith asked City Manager Gary Jackson to help share with the public additional information from Police Chief Tammy Hooper on the goals and activities of the analyst, which Jackson promised to do.
Council received thanks from three transportation advocates, including Chair of the city’s Multimodal Transportation Commission Bruce Emory, for including funds to support expanded transit service in the proposed budget. Cantrell also praised the city’s commitment to improving transportation, which she said would benefit the city’s most vulnerable residents by increasing their ability to access employment and services.
By far the most dramatic testimony of the evening came from Asheville property owner and former Vice Mayor Chris Peterson, who is suing the city over its taking by eminent domain of his riverfront property. Peterson charged that the proposed budget did not add up. Repeatedly addressing Jackson over the protests of Manheimer, Peterson said that the city had raised fees and charges to make up for a budget shortfall, that stormwater taxes were being collected but not used for stormwater projects and that the city had not budgeted for inevitable increases in construction costs or legal fees associated with his own and other condemnation lawsuits.
When Manheimer interrupted to ask Peterson to ask him to address Council rather than city staff, Peterson shot back, “I’m going to address you and Council, and I might add too that your law firm is making a lot of money on these confiscations and you are, too.” He went on to say that the city’s “rainy day fund” (identified as the “unassigned fund balance” in the budget) ought to be $40 million rather than $15 million to protect taxpayers against flooding along the river and lawsuits. Peterson also criticized Currin, the city attorney, for her department’s staff of 12 and budget of $1 million.
Manheimer again instructed Peterson to address Council; he spoke over her and she banged the gavel to end his speaking time. “So I just want everybody to know it’s a corrupt Council,” he added in a parting sally as police officers approached. Peterson left under his own power.
Former Mayor Michalove also criticized the city’s use of funds, saying that the city’s priorities are misplaced and it is misusing ad valorem taxes. He believes the city is improperly directing funds toward the Asheville Art Museum while claiming to support Pack Place. “Your actions are inconsistent and the political favoritism is obvious,” Michalove said.
Council approved a conditional use permit for an expansion project at the Asheville Outlets and an associated reconfiguration of the mall’s signage.
After the conclusion of the homestay discussion, Council appointed three members to the Haywood Street Advisory Team, which is charged with leading the public engagement process to determine the community’s vision for city-owned property on Haywood Street. Council selected David Nutter, Susan Andrew and 17-year-old Carolina Day School student Geronimo Owen. In addition to his school responsibilities, Owen has been active in the community and with the Haywood Street issue.