Whether it’s Hall County or Hilton Head, vacation spots in the Southeast are putting vacation rentals under the microscope.
Hall wrapped up its rewrite of short-term rental code in March and has launched a plan to enforce rules in a growing market that has been effectively unregulated by the county for years — sometimes to the frustration of homeowners around Lake Lanier.
Enrollment is still slow-going. Only a handful of people are getting legal with Hall County in the first few weeks with the new rules.
Four property owners have started the process, according to Hall County Planning Director Srikanth Yamala, whose office manages the licensing and permitting process.
All of the properties starting the process are in the Vacation-Cottage zone around Lake Lanier, Yamala said on Monday, April 9, and 10 property owners total have inquired about the new program.
Exactly how many properties are being rented in the county is unclear, as rental sites keep locations of properties vague until they’re disclosed by the property owner.
Hall County has created an online portal for short-term rental property owners that lays out the permitting process and what’s expected of them. The site includes a 12-page pamphlet that explains how to get registered and what taxes are owed.
Taxes levied by the county and state include a 12 percent tax on the cost of the rental (plus a $5 flat fee), a 7 percent sales tax and a 5 percent hotel tax, according to the pamphlet.
Scott Gibbs, the member of the Hall County Board of Commissioners who kicked off the review of the local rules in late 2017, said on Tuesday, April 10, that the new regulations are “a fair starting point for everybody” and that they accommodate both commerce and residents in the county frustrated by short-term rentals.
The county is building a list of properties it believes to be short-term rentals, according to Yamala, and will send letters notifying property owners about the new rules and the deadlines to comply in the coming months. The county will have a grace period for owners to sign up, he said.
Property owners who don’t comply will eventually be hit with a $500 fine, according to county code.
And Hall County isn’t alone in trying to rein in rentals: The town of Hilton Head Island, South Carolina, has spent the past year updating its own code and bringing people into compliance, according to Steven Markiw, its deputy finance director.
While Hall County isn’t sure how many rentals are operating around Lake Lanier, Hilton Head estimates it has 3,000 to 3,500 rental properties on the island.
Many of those weren’t registered with the county before the town government stepped up enforcement. Property owners renting more than one house are required to have a business license in Hilton Head, but owners renting a single house are not.
Because the Hilton Head rental market is so much larger, more than half of the properties on the short-term market are represented by property management companies.
“Yes, we do get them compliant. Is it easy? No,” Markiw told The Times on Tuesday, April 10. “What we’re currently doing to gain enforcement is we got lists of properties from all of the property management companies, and it’s going into a massive database. We’re going to be comparing that database to county records to determine who has multiple properties.
“If they have multiple properties, they have to have a business license.”
In one case, a property owner in Hilton Head was found to be renting more than 30 properties on the island without a license. Hilton Head draws the line at one home being rented without a license because of an Internal Revenue Service definition.
“That is under an IRS guideline, which is called casual rental — if you only own one property, it is what they consider to be casual rental,” Markiw said.
Hall County makes no allowances for single-home property owners. All rentals are required to be licensed, and in some zones, permitted, with the county.
All sides of the issue agree that the big question for Hall County comes down to enforcement of the new rules. Hilton Head is building its database and educating property owners — an initiative being loosely followed by the county.
But Hall County government is also tracking complaints made by neighbors of vacation rentals. The Hall County Sheriff’s Office, Marshal’s Office and the Planning Department are all coordinating to track complaints about rentals. That tracking system will help the county not only identify properties but to assess fines if needed.
Gibbs said the county will find out this summer if the new rules, and the new enforcement system, will work.
“We’ll know this time next year with the season kicking off in the next two or three weeks,” he said. “It’ll take a year for everything to shake out with the good and the bad.”