NC Court Ruling -- Wilmington STRs Can Still be Regulated

[Wes M.]

A ruling has finally been issued for NC Court of Appeals case involving the City of Wilmington's STR ordinance. Ultimately, the court found portions of the City's ordinance to be invalid. Specifically, the City's requirement for "registration" and "lottery" of STRs was found to be invalid. Some may read the news headlines regarding this decision as an unequivocal prohibition of STR regulations in North Carolina, but that is not the case. If your read the entire decision and opinion, the Court affirms local government authority to regulation STRs through zoning enabling legislation. Effectively, any local government in North Carolina still has the authority to prohibit STRs in certain zoning districts as it so chooses. I would anticipate the City of Wilmington will modify their existing ordinance to remove the term "registration" from its existing ordinance in accord with the court's ruling and continue to regulate STRs in certain zoning districts -- but that's just my opinion.

Barring future legislative action by the General Assembly to explicitly preempt local government zoning regulation of STRs, it appears this court ruling will have little effect on existing STR ordinances throughout North Carolina. Few North Carolina local governments use the term "registration" in their ordinance, which is the reasoning for court invalidation in this particular case.

I share this information in an effort to help educate NC STR investors on their future decisions. In my opinion, it would be unwise to invest in an STR location that has existing regulations in place under the assumption this court case has somehow preempted that authority.

Language from Court opinion:

We hold that the following provisions of the ordinance are not preempted by Section 160D-1207(c) and remain in effect: (1) the restriction of whole-house lodging to certain zoning districts, i.e., the entirety of Sec. 18-331.1.

https://www.wect.com/2022/04/0...