AN ACT to limit the regulation of short‑term rentals by cities to protect private property rights and to ESTABLISH guidelines for regulating short‑term rentals.

Whereas, Section 1 of Article I of the North Carolina Constitution provides that all persons are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.; and

Whereas, Section 19 of Article I of the North Carolina Constitution provides that [n]o person shall be taken, imprisoned, or disseized of his freehold, liberties, or privileges, or outlawed, or exiled, or in any manner deprived of his life, liberty, or property, but by the law of the land.; and

Whereas, Section 1 of Article VII of the North Carolina Constitution provides that the General Assembly shall provide for the organization and government and the fixing of boundaries of counties, cities and towns, and other governmental subdivisions, and, except as otherwise prohibited by this Constitution, may give such powers and duties to counties, cities and towns, and other governmental subdivisions as it may deem advisable.; and

Whereas, North Carolina has 532 cities; and

Whereas, short‑term rentals are vital to the tourism and marketability of the State; and

Whereas, short‑term rentals provide housing options for transitory workers, including nurses, tradespeople, and executives; and

Whereas, cities often frustrate tourism and infringe on property owners' private property rights by adopting ordinances that inhibit property owners' right to use their property as they see fit; and

Whereas, it is in the best interest of the State to establish uniform guidelines for short‑term rentals; Now, therefore,

The General Assembly of North Carolina enacts:

SECTION 1.  Article 21 of Chapter 160A of the General Statutes is amended by adding a new section to read:

§ 160A‑499.11.  Regulation of short‑term rentals.

(a)        No city may adopt or enforce an ordinance, rule, or regulation that does any of the following:

(1)        Prohibits the use of residential property as a short‑term rental.

(2)        Prohibits the use of accessory dwelling units as short‑term rentals.

(3)        Limits the number of nights a property can be rented as a short‑term rental.

(4)        Requires the owner of the short‑term rental to occupy the property for any period of time during a rental to an occupant.

(5)        Classifies short‑term rentals as a commercial use.

(6)        Limits the operation of a short‑term rental marketplace.

(b)        A city may adopt an ordinance, rule, or regulation that regulates short‑term rentals by:

(1)        Requiring a lodging operator to obtain a permit to operate a short‑term rental within the city's corporate limits. The city may revoke the permit if the short‑term rental incurs five health and safety violations within a 12‑month rolling period; provided, however, the city shall, prior to revoking the permit, give the lodging operator an opportunity to contest the alleged violations and, if found to exist, an opportunity to remedy the violations. The city may charge a one‑time fee of not more than twenty‑five dollars ($25.00) for each permit issued and may charge an additional fee of not more than twenty‑five dollars ($25.00) to reinstate a permit that has expired or been revoked.

(2)        As part of the permitting process authorized under subdivision (1) of this subsection, limiting the number of occupants allowed to stay in a short‑term rental to two adults per bedroom.

(3)        As part of the permitting process authorized under subdivision (1) of this subsection, requiring the lodging operator, or his or her authorized agent, to provide a parking plan indicating designated parking to accommodate one space per bedroom. The violation of a parking restriction is not a health and safety violation under subdivision (1) of this subsection.

(4)        Restricting the location of short‑term rentals to areas of the city that have been zoned for residential use, and requiring that the property remains in compliance with all applicable residential zoning requirements.

(5)        Requiring that short‑term rentals comply with all applicable city ordinances and codes, including building codes and housing codes.

(6)        Requiring that all contracts for short‑term rentals include a copy of any city ordinances that regulate noise, waste removal, and parking or, in the alternative, that the lodging operator conspicuously post in the rental a written summary of city ordinances that regulate noise, waste removal, and parking.

(7)        Prohibiting the use of short‑term rentals for any purpose other than that which is allowed in hotels, motels, and inns without the property owner's prior approval, which shall be evidenced by a written agreement between the lodging operator and the occupant.

(8)        Requiring a lodging operator or authorized agent of a lodging operator be within a 50‑mile radius of a short‑term rental during the time that an occupant is staying in a short‑term rental.

(c)        Unless the context indicates otherwise, the following definitions shall apply in this section:

(1)        Lodging operator. – A person who rents a short‑term rental to an occupant using a short‑term rental marketplace.

(2)        Short‑term rental. – All of the following that are offered to the public for a fee and for a period of 90 days or less: (i) an individually or collectively owned single‑family house or dwelling unit, (ii) a unit in a condominium, timeshare, townhome, or accessory dwelling unit, and (iii) an owner‑occupied residential home. The term does not include any of the following:

a.         A collective group of units in a complex of condominiums owned by a single owner, corporation, or related owner that is non‑owner occupied and is used in a similar manner as a hotel, motel, or an extended stay inn if the complex of condominiums is not required to adhere to the same building standards and regulations as hotels, motels, and extended stay inns.

b.         A unit that is used for a retail business or as a restaurant, banquet space, event center, or a similar purpose.

(3)        Short‑term rental marketplace. – A platform through which a lodging operator, or the lodging operator's authorized agent, offers a short‑term rental to an occupant.

SECTION 2.  This act is effective when it becomes law.