In Pinehurst, a Village Divided by Short-Term Home Rentals

Note: The following story about the divisive issue of regulating short-term rentals in Pinehurst first appeared in The Pilot on July 9, 2022. 

Some of the Pinehurst homes and condos listed on Airbnb on July 8, 2022. || Collage by Jaymie Baxley/The Pilot

For about $240, you can spend a night in the middle of a municipal maelstrom.

That’s the average cost of an Airbnb in Pinehurst, where some long-time residents feel their quality of life is being threatened by a proliferation of short-term home rentals. Others contend that the rentals benefit the village and are key to its continued success as a global destination for golfers.

The debate is forcing the village to reckon with two seemingly irreconcilable sides of its identity. Is Pinehurst a retirement community or a resort town?

While the Village Council has for years fielded complaints from residents about short-term rentals, a recent surge in rental listings has moved the issue to the forefront. Data from AirDNA, a consultancy that tracks the short-term rental market, shows there are nearly 430 homes and condos in Pinehurst listed on Airbnb and VRBO — a 141-percent increase from the third financial quarter of 2019.

Comments from supporters and opponents of short-term rentals have become a common part of Village Council meetings. According to a Pilot analysis of legal minutes and meeting videos, the council has received 86 public comments about short-term rentals since the beginning of the year.

Several of those comments came from Jeffrey Heintz, an attorney who has lived in Pinehurst since 2015. He wants to see the council enact a village-wide prohibition on short-term rentals.

“Living next to a short-term rental is like having a vacant house next door,” Heintz said in an interview. “There is no one to whom you can go and borrow a cup of sugar. There is no one to whom you can chat about local issues. And if left unchecked, it will consume the single-family, residential neighborhood character of the village, which is every bit as important as the resort character of the village.”

On the other side of the issue are people like Brandon Goodman, who operates three short-term rentals in Pinehurst. Two of his properties, he said, were “purpose-built” as rentals by James Tufts, the founder of the village, in 1896.

“Vacation rentals have been a part of Pinehurst since its very founding,” Goodman said. “What’s actually relatively new to Pinehurst is full-time residents. The vacation rentals have always been here.”

Nuisance or Necessity?

Robert Rupel estimates there are seven short-term rentals within a two-block section of his neighborhood near the 13th hole of the Pinehurst No. 2 golf course.

He said litter and noise from renters are common nuisances in the neighborhood. There have been a few instances of intoxicated guests urinating in his backyard, he said.

While walking his dog a few weeks ago, Rupel overheard a lively conversation among a group of renters who he said had “obviously been playing golf and drinking all day.”

“They’re screaming at each other about whose ‘unit’ is bigger than the other guy’s ‘unit,’” he said. “If you live on either side of that house, it’s disgusting. And it’s a pain that you shouldn’t have to put up with in a residential neighborhood.”

A June 2020 incident on Magnolia Road is often cited as Exhibit A in the case against short-term rentals. Police responded that night to numerous reports of loud music, illegal drugs and property damage in connection with a party attended by about 75 people at a rental home, a violation of the statewide gathering restrictions in place at the time to curb the spread of the coronavirus.

But that incident was an “outlier,” according to Village Manager Jeff Sanborn. He has said that an analysis of rental-related complaints filed with the Pinehurst Police Department yielded no evidence of widespread misbehavior.

That finding has been disputed by critics of short-term rentals, who claim that many incidents involving renters go unreported. Among other things, Rupel believes renters are to blame for the increased amount of litter he’s seen around the village.

“The litter problem that we have in Pinehurst, which I think is significant and degrading to our community, is driven by short-term rentals,” he said. “You’d be hard-pressed to convince me that 70-year-old people are throwing Budweiser cans out of their car window after a night of drinking beer for the weekend. It’s coming from the renters who don’t have a vested interest in the community.”

Goodman rejects what he views as a prevailing misperception of short-term renters as “drunk golfers.”

“About 50 percent of the people that stay in our houses are here for golf,” he said. “There’s a host of reasons people come here, from family reunions to funerals. It’s not all golfers. And if people on vacation are so undesirable, why would we want them anywhere? Why would we want them in our hotels? There’s just no data to support that people on vacation are undesirable people.”

He added that some of the residents who oppose short-term rentals have no issue “staying at vacation rentals in other communities.”

“They like them in other places,” Goodman said. “They just don’t like them here.”

Goodman contends that the village, which has only a handful of hotels, would not be able to accommodate large events like the back-to-back U.S. Open golf tournaments that will be played at Pinehurst Resort in 2029 without short-term rentals. When the tournaments were last held at the resort in 2014, about 340,000 people visited the village.

“We don’t have the available hospitality here to support what’s happening here, what’s going to happen here and what has already happened here,” Goodman said. “We just don’t.”

Todd Camplin, who manages a dozen short-term rentals in Pinehurst, said the benefits are “a lot more far-reaching than most people consider.”

“Not only do they bring dollars to the area, which pumps money into the economy, but every short-term rental pays taxes to the Convention and Visitors Bureau for marketing dollars,” he said, referring to the 3-percent cut taken by the bureau to promote the area to tourists. “It’s not much of a stretch for me to believe that a lot of the new interest in Pinehurst, as far as real estate goes, is directly correlated to those dollars.”

Camplin said a renter may decide to become a permanent resident following a good experience at a short-term rental, which could in turn improve the quality of life for all residents by boosting the village’s coffers. That additional tax revenue could then allow the village to expand existing services and create new amenities.

“There is a huge trickle-down effect from people coming to the area, spending money and having a good time here, and going back to their homes and telling people about how good of a time they had here,” Camplin said. “Most of the people that I deal with in the real estate environment who are looking to move here either heard about it from someone else or they have come here as part of a trip or outing or event that drew them to the area. I think short-term rentals are a big driver in the overall economy and interest in the area.”

Katrin Franklin is a downtown business owner who supports short-term rentals. In recent comments to the village council, Franklin said her store, Bump and Baby, which specializes in clothing for infants and maternity wear, is sustained by out-of-town customers who hope to eventually move to Pinehurst.

“It is clear and undeniable that tourism drives my business,” she said. “My money is made on mostly tourism. We catalog every shopper, we talk to them and ask where they came from. People (say they) are visiting for the first time or they visit every single year or they can’t wait to retire here or they own a short-term rental here. It’s a myriad of beautiful stories about how this is the place that they want to end up.”

Seeking Solutions

The Pinehurst Village Council voted 4-1 last month to adopt an ordinance amending the village’s municipal code in an attempt to address some of the oft-repeated complaints about short-term rentals.

Among other things, the ordinance prohibits “unruly gatherings at residential properties.” Such gatherings are defined as any event where “at least one person who is not a permanent resident” of the property is present and three or more criminal offenses are committed within 100 yards of the property over a 24-hour period.

If an unruly gathering occurs at a short-term rental, the owner of the property will be fined $1,000 under the ordinance. An increased fine of $2,000 will be levied against the owner for any subsequent violation recorded at the property within two years of the first offense.

The ordinance also includes an amendment prohibiting overnight parking on residential streets and a section stating that any person found “urinating or defecating on private property” could be fined $500.

Sanborn described the ordinance as the first step in a three-phase plan to establish a regulatory framework for short-term rentals in the village. The second phase of that plan, which is scheduled to be discussed by the council on Tuesday, would involve adding short-term rentals to the table of allowed lodging uses in the Pinehurst Development Ordinance.

Darryn Burich, planning and inspections director for Pinehurst, said this change would give village staff the ability to issue and revoke permits to rental operators, and to designate districts where short-term rentals are or are not allowed.

But some opponents of short-term rentals believe a more drastic approach is needed. Residents like Heintz want the practice banned outright.

“If I’m wrong and a pause or a prohibition on short-term rentals in single-family neighborhoods turns out to not be the thing to do, we can always allow them (again),” he said. “But if the short-term rental people turn out to be wrong, we’re screwed because we will already be overrun. It will be impossible for us to get that genie back into the bottle.”

Although Rupel is also opposed to short-term rentals, he doesn’t think they should be “eliminated or blown off the face of the earth or whatever.”

“They ought to be controlled, they ought to be managed, they ought to be monitored,” he said. “And where there are violations or problems, the owner ought to be held accountable.”

Goodman, however, believes the problems are confined to a small number of short-term rentals in the village. It would be unfair, he said, to impose restrictions on the rental operators who have been following the rules all along.

“The perfect solution is to use existing law and existing ordinances to deal with the bad actors,” he said.

Phillip Sounia, a retired Army officer who is in the process of completing his doctorate in public policy, has repeatedly gone before the Village Council offering to mediate a solution between the rental operators and their critics. The council has yet to take him up on the offer.

He has also provided the council with multiple reports and studies on short-term rentals. One of these papers, published in 2017 in The Journal of Law and Economics, links the regulation of short-term rentals on a Florida island to a decrease in surrounding property values, a conclusion that goes against a concern voiced by some village homeowners who feel their property values could be adversely affected by short-term rentals.

In a phone interview, Sounia acknowledged that there are “valid claims on either side” of the issue.

“One side is saying, ‘Hey, this is part of my livelihood that you’re trying to take away from me. This improves the value of my home. This allows me to go on vacations, to see my grandkids, and you’re trying to take that from me,’” Sounia said. “And then on the far other side, you have a group that’s saying, ‘Hey, we just want to have this totally quiet environment, and I want to have a golf course all to myself. I don’t want to have any kind of disruption to my daily life.’

“But what they don’t realize is that all the visitors that come to Pinehurst are what pays for that quality of life.”

The council itself has yet to reach a consensus on the extent of the issue or the best way to address it. While council members Jane Hogeman and Patrick Pizzella have been generally supportive of a potential prohibition on short-term rentals in areas zoned for single-family residential use, members Jeff Morgan and Lydia Boesch have both voiced concerns that such a measure would subject the village to lawsuits by running afoul of the rights of property owners.

Despite being the only council member to vote against the municipal code amendment addressing unruly gatherings, Boesch said she is neither for or against short-term rentals.

“My position all along has been let’s let the two sides try to work this out and find common ground where they can agree,” she said in an interview. “What are the two sides telling us that we should do? I don’t even know the answer to that because they haven’t been given the opportunity.”

While Pinehurst has by far more short-term rentals than any other municipality in Moore County, it is not the only place where local officials are grappling with the issue. On Tuesday, Foxfire will hold a public hearing on a proposed amendment to its development ordinance that addresses the “use of dwelling units and short-term rentals.”