November 2021 was a memorable date. A record 45% of eligible voters in IOP voted to elect four new Council members and a new mayor. Every one of them ran on a residents-first agenda. The mandate was clear. The execution of the mandate could not have been easier – put every vote to a litmus test of whether it supports a residents-first agenda. Period.
Short-term rentals are an excellent test of this mandate. First, the focus of any effort with STRs should exclude primary homes being rented out by residents for up to 72 days annually as allowed by state law. Restrictions on STRs should exclude long-term rentals. Next, how are surrounding communities addressing STRs? Well, the cities of Charleston, Sullivan’s Island, James Island and Myrtle Beach have all essentially banned STRs in residential communities. Kiawah restricts STRs and Mount Pleasant caps them at 400 licenses – less than 1% of households. Folly has a referendum in February to restrict STRs. Why? Because all these communities have concluded that unlimited STRs seriously impact the quality of life of residents, erode property values when they become excessive and ironically reduce the value of rentals when there is no constraint on supply.
With this as background, let’s look at how IOP’s profile has shifted. In 2000, although data from the city is anything but consistent, using city-provided data and census data for households, IOP shows approximately 850 STR licenses out of 3,881 housing units, or approximately 22% STRs. At year end 2022, again using the same city and census data, there were approximately 1,750 STR licenses and 4,419 housing units, for a 40% STR ratio. In other words, in a 22-year period, the island went from 78% residential to 60% residential. Even more alarming is the rate of transition. As big money flowed into real estate investment funds, STR licenses in IOP went up by north of 25% in the last two years, largely fueled by investor groups.
Most people believe that IOP is best served with a healthy mix of STRs and residential. However, as the only community in this area with no restrictions, investment money will pour in here, changing this island forever. Like many other communities that failed to address this issue, there will be an initial surge of property values with new money which will eventually revert to lower property values as residents lose their paradise and unlimited supply of STRs result in a deterioration of rents and value.
I urge you to contact your Council members immediately and ask them to act –citycouncil@iop.net. Mayor Pounds and Council Member Hahn – both of whom ran on a residents-first agenda – recently voted against a pause on issuing new licenses for 90 days while a plan was developed. Perhaps you should ask them why. The justification is they wanted to have further meetings and come up with the perfect solution. In business, we use a decision-making analogy: If someone is bleeding on the side of the road, stop the bleeding before you design a healthy diet and exercise regimen for perfect health. If residents first is the agenda, it is time to stop the bleeding. Make the tough decisions that the residents voted you in to make. Almost every other surrounding community has acted.
“Reddy or Not” is a periodic column representing the opinion of Lucky Dog Publishing owner Rom Reddy but not necessarily the opinion of the newspaper. In keeping with the paper’s philosophy of publishing all opinions, the publisher welcomes responses, which must be limited to 300 words and will be published on a space-available basis.
