Pinehurst’s efforts to carve a loophole for the Country Club of North Carolina’s longstanding rental cottage program from the village’s broader ban on short-term rentals has hit a snag.
A proposed ordinance to allow homeowners’ associations to manage short-term rentals within their boundaries earned a thumbs-down from the village’s planning and zoning board, which unanimously recommended rejecting it.
The planning board had discussed the proposal at length, as had the Village Council, before reviewing the draft ordinance last week. Board members praised the ordinance as well-crafted toward its aims, but their rejection was based on the perceived unfairness of the measure’s basic premise.
“It almost is like walking through minefields in this scenario and they literally walked around every single one to create an ordinance that’s going to allow arguably a small group of Pinehurst citizens, to allow their flexibility,” said board Chair Jeramy Hooper.
“So as a citizen, I’m deeply concerned. I’m concerned about where this was derived. I’m concerned about their direction to create such an ordinance.”
When the Village Council voted to ban short-term rentals in all areas of Pinehurst last fall, CCNC lobbied for consideration of the rental cottage program it has operated since the 1960s. At the time, village leaders pledged that exceptions would be made down the road.
The proposed amendment to Pinehurst’s development ordinance would effectively create a new land use classification, defining rental programs run by homeowners’ associations distinctly from traditional short-term rentals managed by private companies or individual homeowners.
“Neighborhood housing accommodations” would be added as a new lodging category allowed by special permit in nearly every zoning district.
As proposed, the ordinance would define neighborhood housing accommodations as whole-house rentals of less than 30 days managed by an association responsible for at least 20 acres or 20 residential units — whether single-family homes, townhouses or condos.
Planning board member Matt Jones characterized it as “the same land use” of short-term rentals, “just in a different area.”
Sonja Rothstein recalled that CCNC “fought long and hard” to be annexed as part of Pinehurst in 1985, and said that the planning board’s job is to consider the interests of the larger community.
“I, as a planning board member, also feel that’s giving special permission to a special group of people after we have spent hundreds of hours trying to get this so it’s fair to everyone,” she said of the proposal.
The planning board’s public hearing on the ordinance brought out two residents critical of it.
Lynn Goldhammer echoed earlier concerns expressed by the planning board that the measure would allow developers to “mass produce short-term rentals” over the objections of minority property owners.
HOAs that move toward operating short-term rentals would be required to provide for them in their fundamental covenants. That requires agreement from a 67 percent supermajority of lot owners but disadvantages individual homeowners in newer neighborhoods where most lots are still owned by the developer.
Goldhammer also mentioned the Village Council’s recent approval to rezone property owned by Pinehurst Resort for the Cottages at No. 8 from medium-density residential to hotel use, allowing for the construction of nine rental homes.
“We’re coming up with all these weird little things and all I can think of is how are we, the taxpaying citizens of Pinehurst, better off because something like this is created?” she said.
Isabel Mattox, a Raleigh attorney representing CCNC, said that the proposed ordinance would require the club to update 60-year-old covenants. She asked that the planning board “wordsmith” the proposal to eliminate the need for a majority buy-in.
“I do want to underscore the fact that going into a neighborhood and trying to get 67 percent is really difficult, and we’d rather not have to do that,” she said.
Later in the meeting, planning board member Paul Roberts was also skeptical that CCNC’s rental program could pass through such a vote.
“I would wager a bet that when they vote, people are not going to want short-term rentals in communities like that. It’s only people who have financial gains and other motives,” he said. “I just would hate to have another divide or another situation within the community where ‘I can do it, but you can’t.’”
Though CCNC’s rental program is longstanding, specific homes typically rotate in and out of rental use as they’re inherited or sold — and inventory was at an all-time low of 14 addresses last fall. So the club opposed the village’s overall crackdown on short-term rentals, which prohibits homes from becoming short-term rentals unless they were actively used that way when the ban was adopted.
Alex Cameron, Pinehurst’s planning supervisor, presented the ordinance as a way to allow short-term rentals in neighborhoods that have the capacity to manage and regulate them — something Pinehurst as a municipal entity has virtually no authority to do.
“There's the feeling that this could lead to a significant decrease in some of the adverse effects that have been attributed to some of the short-term rentals within other neighborhoods,” he said.
Board member David Alzamora sympathized with that goal, but said it would have been better addressed with a more nuanced approach to the overall short-term rental issue as the planning board recommended last year.
“It’s something that we considered when discussing the short-term rentals: there's some areas that are better suited, able to manage them easier and it’s just a shame that it was sort of a sweeping movement on the front end,” he said.
Planning Board member Jack Farrell said that he saw no “widespread” demand from the community to allow HOAs specifically to manage short-term rentals. He also described the proposal to effectively lift restrictions within HOAs — which have the authority to create more stringent rules — as problematic.
In earlier discussions among the planning board and Village Council, both boards shied away from exploring regulations on how HOAs might manage any potential short-term rental programs.
Though the Village Council may still consider the ordinance with the planning board’s recommendation against it, it is not currently scheduled to do so.
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