The number of properties that can be used as short-term vacation rentals in Savannah is quickly decreasing following the passage of new restrictions on the industry, as industry representatives criticize a last-minute change to the revised ordinance they said cut the number of available permits in half.
The revisions to the ordinance approved by the Savannah City Council limits the amount of rentals to 20 percent of the parcels in a ward in residential zoning districts. Owner-occupied rentals are exempt from the cap, as are commercial zoning districts.
As of Oct. 20, 24 of the 42 regulated wards had reached the cap, leaving 102 parcels available for use as vacation rentals, according to city officials. There were 1,170 certified vacation rentals at the time.
Passage of the revised ordinance came Sept. 28 after industry representatives unsuccessfully opposed a change concerning how the cap is calculated.
Alderman Bill Durrence had proposed including owner-occupied rentals in the total instead of exempting them from the initial count as originally proposed by staff.
Durrence said he was concerned about automatically counting properties with homestead exemptions as “owner-occupied,” as staff proposed, when the ordinance revisions establishes a process for homeowners who want to be categorized as such. In addition, Durrence said he was concerned the owner-occupied rentals would be exempted indefinitely when the properties were not being counted towards the accumulation of the percentage cap.
“It’s essentially double dipping,” he said. “We’re saying we’re not going to count you now, but any time in the future if you want to switch to non-owner occupied you’re exempt from the cap.”
Durrence’s amendment changed one word so that “all” parcels, rather than “such” parcels, with Pre-Existing Certificates, shall be counted in determining the percentage then existing in each ward.
The change, which was ultimately approved in a 5-3 vote, increased the number of existing rentals in a ward and decreased the number of potential properties that could be operated as non-occupied vacation rentals.
But Durrence’s verbal amendment to the text’s language was flawed, according to Corey Jones, whose company, Lucky Savannah, manages multiple vacation rentals throughout the city. The number of properties that can operate as vacation rentals is now based on that flawed ordinance, Jones said.
“He only changed one word,” he said. “And the one word he changed only clarified the original language versus expanding the original language.”
The ordinance revisions were developed by city staffers, residents and industry representatives in response to concerns of the Savannah City Council and community members about the growing number of rentals operating in the city and their impact on the amount of long-term residential properties available. There were also concerns about quality-of-life issues related to trash, noise and parking.
The 20-percent cap was chosen as a compromise between the Savannah Downtown Neighborhood Association, which wanted 15-percent limit, and vacation rental representatives, who pushed for a 35-percent cap.
The amendment to include owner-occupied rentals in the calculation goes against what the city, the neighborhood association and industry representatives had agreed to after seven months of work, said Attorney Robert McCorkle III, who represented the group of vacation-rental management companies.
There was never any guarantee the agreement between the stakeholders would prevent the cap from being challenged in court, but it was his goal that at least his clients would walk away satisfied with the ordinance, McCorkle said.
“The city backed out of their commitment with us and therefore we no longer have an agreement,” he said. “What that means for the future, I don’t know.”
The city council held a first reading of the ordinance on Aug. 31. That reading came after the Chatham County-Savannah Metropolitan Planning Commission approved the recommendations in August, which the city council had agreed to submit for the their review in July.
Aldermen Carol Bell, Estella Shabazz and Tony Thomas cast the votes against the amended version.
Bell said during the Sept. 28 council meeting she was also concerned about the number of increased vacation rentals and their impact on neighborhoods, but that she did not support voting against the compromise at that stage in the process.
“It’s a little late guys,” she said.
The ordinance, which was initially implemented in January 2015, defined short-term vacation rentals as the rental of an entire dwelling unit for 30 days or less and limited operations to the Historic District, Victorian District and the Mid-City District. The ordinance also established a certification process and method for taxing and licensing the rentals.
The updated ordinance also reduces the amount of visitors that can stay in the rentals and shortens the period in which a new owner can renew a property’s vacation rental permit from 12 to six months.
The city’s ordinance could end up being superseded by state legislation introduced earlier this year by Rep. Matt Dollar, R-Marietta, that could block local governments from banning or regulating vacation rentals.
Rep. Ron Stephens, R-Savannah, said Dollar’s bill will probably not pass as written and it is unclear how Savannah’s ordinance will ultimately be impacted. Most state lawmakers believe in local control, but at the same time homeowners have rights also and they do not want cities and counties to prohibit vacation rentals outright, Stephens said.
“This is going to open up a lot of conversation,” he said.