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Request to Set a Legislative Public Hearing on Text Amendments to the Land Use Ordinance Related to Tourist Homes/Short-Term Rentals
PURPOSE AND BACKGROUND: At the October 20, 2026, meeting, the Town Council held a work session on short-term rentals and possible new standards to add to the Land Use Ordinance. As part of the discussion, the Town Council considered local impacts, reviewed standards from other jurisdictions, conferred about statutory authority and preclusions, and spoke to community concerns about the use.
A draft ordinance has been prepared based on the discussion and direction from the work session (Attachment B). An annotated version of the draft ordinance showing the new and deleted text in tracking has also been provided (Attachment C). It is anticipated that further refinement will be made during advisory review and the public hearing process.
Text amendments are legislative decisions; the Town Council must receive public comment before taking action on the matter, planning board and Orange County review are also needed. A resolution setting the public hearing for January 19, 2027, is provided (Attachment A).
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Department
DEPARTMENT: Planning Department
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Fiscal and Staff Impact
FISCAL AND STAFF IMPACT: Short-term rentals contribute revenue to the Tourism Development Authority annually through the 3% local occupancy tax (which funds town-wide festivals, wayfinding, public parking, and other town benefits). Enforcement of any new policy that comes from a new subsequent text amendment may require more staff time to ensure compliance with new regulations. Setting a date for the public hearing has no fiscal impact.
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Community Impact
COMMUNITY IMPACT: Short-term rental conversions from existing homes remove housing stock from the vacancy cycle, impacting affordable housing and potentially reducing affordable housing. Short-term rentals may have nuisance impacts on local neighborhoods, including waste, traffic and parking, noise, and safety. Short-term rentals are a revenue generator and/or housing cost offset for existing property owners, allowing residents to stay or return, and manage less traditional work assignments or term employment. Setting a date for the public hearing has no community impact.
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Climate Impact
CLIMATE IMPACT: Short-term rental hosts tend to invest in ongoing property maintenance to compete in the transient stay market - incorporating updates to energy efficiency, modern appliances, and other electricity and energy saving efforts more frequently than long-term rental properties. Short-term rentals generate more single-occupancy vehicle trips and greenhouse gas emissions, as well as the potential for increased impervious surface based on market expectation for off-street parking. Setting a date for the public hearing has no environmental impact.
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