Short Term Rentals - A Tool In the Resilience Toolbox?

We on Sullivan’s Island are paying attention to Isle of Palms’ debate on short term rental (STR) licenses. I am interested from a coastal resilience perspective. Management of STR licenses, like other rules, ordinances, and regulations, provides an avenue to bolster resilience, but like all compromises it is not without costs and considerations both at present and in the future.

One of the points I hope to make is that the STR-Resilience relationship varies in the short and long-term. We are used to the short-term outcomes of a decision on STR licenses, but in the long-term those expected outcomes can flip. With these potential future changes, it is important to consider STR licenses as a tool in each island’s resilience plans.

The shorter perspective is one that we see in many of the signs on people’s lawns. One view is that STR’s bring a lot of people and development to the island and could adversely limit ability of the town to respond to different natural threats. It is certainly a valid point and one made by a large group of citizens. They have labeled this condition as a lack of livability that occurs when services are strained. The town of Sullivan’s Island has traditionally accepted that view and decided to minimize the reduction of resiliency (livability) by, essentially, eliminating STR’s. Conversely Isle of Palms is working to minimize or offset that reduction by using the funds from taxes on those STR’s to bolster the island’s Adaptive Capacity in the form of more resources/finances to handle threats.

Both models have their opponents and proponents (as is evident by the number of signs on the road) – I am not writing to offer an opinion on which is better, rather I am pointing out that resilience/vulnerability has several factors that can offset each other. The two offsetting ones I have covered are Exposure to the threat (e.g., increasing number of people on island) and Adaptive Capacity to lessen the impacts (Isle of Palms financing work on flooding and erosion issues on the island).

Long-term coastal resiliency issues are more complex and include climate shifts as well as the existing and well understood short-term threats. Adding climate change to the equation starts to move the driving forces and their relationships outside of the borders of the existing conventions, both in terms of threats and finances. In the future what is presently coveted may not be and what was a safe assumption may turn into a risk. We can, based on the short-term resilience model previously described, reasonably understand the motivations of our neighbors driving the different motivations for or against STR caps. The longer-term perspective, however, can turn these understandable motivations on their head.

The question remains “what does climate change have to do with STR’s and how does it change in the future”? The answer lies largely in the financial aspects of home ownership, maintenance, and taxation. In the long term, the costs of maintaining a home on an island with only two ways off are going to increase at a rate beyond the national baseline. The first reality is that insurance, if it is available, will be much more expensive than it is now; just ask the people of Florida. This is a national trend, it is occurring here already, and it will become more pronounced.

The second reality, which is partly an outcome of the first, is the tough one to accept. Island homes are, at some future point, not going to be worth what they are now. Climate change and the associated sea level rise are going to cost us and reduce the taxes the towns receive; that is a double-edged sword for all coastal towns. IOP has already seen how much it costs, and to what limited outcomes, beach renourishment projects can provide. More importantly, on the other sides of the islands there are no dunes and elevations are generally lower; chronic daily flooding is occurring and is forecast to become more extensive. When flooding occurs more than 30 days a year any area exposed to this level begins to teeter on the edge of livability. There are presently very few areas with more than 30 days of inundation per year on the islands, but the towns are keenly aware of where this condition exists. There will be significant increases in the areas inundated more than 30 days per year. Taxes and home values will fall in these areas as buyers become more aware of risks and town maintenance budgets swell to maintain services in chronically flooded portions of the islands.

Example of increasing 30-day inundation zones on Sullivan's Island from 2022 to 2042

Back to STR’s – they represent opportunities to put money into the ‘Adaptive Capacity’ bank at present – both for the towns and the people owning the property. Financial stability is a form of Adaptive Capacity; funds will be needed by families and the two towns in the coming years to tackle issues from insurance to sewer maintenance. Adaptive Capacity also allows families to divest in risky investments, thereby reducing exposure, in whatever way is best for them. On Sullivan’s, time shares may offer local families a way to call the island home for part of the year and take some risk off the table.

Dire warnings – yes and unfortunately you have heard them before, but in problems exist opportunities. We can start by acknowledging that not all properties have the same exposure to long-term risks. This provides an opportunity for those who will most likely need financial help to get it in the intermediate term; or for those looking to move to a safer location it may provide a more affordable avenue. One could envision that areas with higher risk have more STR licenses, thereby increasing the value of these homes in the short term to help amortize loss in the longer term. It may also help families move from higher risk zones to lower risk zones by increasing the home value at present in higher risk zones and lowering it in lower risk zones. I know this sounds contrary and it is if we don’t consider the motivation of many Isle of Palms homeowners – secondary income. This mix of residential and commercial homes provides some friction at present, but also opportunities in the future.

Using natural hazard risk as a zoning determinate is becoming a reality in Charleston so the blueprint is available. The next ten years will be both important and difficult for coastal areas as we transition from the known present to a changing future. Realigning wealth, tax income, and risk will not be easy. There will be winners and losers, but the sooner it begins the more equitable it will be for all. STR’s and time-shares are, among other ordinances, important tools if used strategically to create livable coastal towns.

Before I finish, I would like to provide a little background on myself. I am a coastal geologist and have been working on coastal issues since the mid 1990’s. I studied under the regime of Stan Riggs and Orrin Pilkey, so it was full of cautionary tales of coastal development. Yet, I am a homeowner on Sullivan’s Island and have the same concerns that most of you have. I bring this up to highlight that I understand the nuances that resilience can arise when it comes to finances, the environment, and safety, and one does not always translate linearly to the other. I can only hope that this STR example helps spur us to move beyond the traditional lanes when tackling coastal issues that we will face in the next twenty to thirty years.