The City of Wilmington announced on Monday, May 2, that it will not appeal the recent decision by the State Court of Appeals regarding short-term rentals.
Here’s where things currently stand.
The City of Wilmington enacted a zoning ordinance in January 2019 that restricts short term rentals (STRs) through a registration and lottery process.
The General Assembly amended and recodified statutes regarding local government regulation of STRs in July 2019 with a retroactive effect, applying it to Wilmington’s ordinance.
The Schroeders filed a complaint with the Board of Adjustment in August 2019 and then challenged the ordinance’s validity in court in October 2019.
The trial court denied the Schroeder’s claims of unconstitutionality but declared the ordinance invalid in its entirety in September 2020; Both the city and Schroeders appealed the decision.
The NC Court of Appeals issued its opinion in April 2022, affirming the registration and lottery provisions of the ordinance are invalid but reversing the portion of judgement invalidating the entire ordinance saying valid provisions of the ordinance are severable from the invalid provisions.
The City will not appeal the Court of Appeals’ decision and will amend its ordinance and will no longer require registration for short term rentals or enforce the cap and separation requirements.
All other provisions of the ordinance will remain in effect, including parking and insurance requirements, bedroom maximums, ground floor restrictions in the Central Business District, local manager requirement, and nuisance related requirements. Council is expected to vote on the amendment at its July meeting.
The City will refund the registration fees, any applicable credit card convenience fee, and will include 6 percent interest per annum – as required by NCGS 160D-106.
The City being mindful of the ongoing litigation and potential outcomes held the registration monies collected.
Registered operators will receive checks from the City along with an explanation of their refund.
Registration fees collected since the inception of the program amounting to $443,428 and related third-party processing fees amounting to $10,189 will be reimbursed to the respective homeowners.
Accrued interest, calculated at a rate of 6 percent and estimated to total $57,867 will also be remitted to the homeowners.
Refund checks will include convenience fee charges to hosts who registered by credit card.
The City’s goal is to complete the reimbursement payments by June 30.