FOLLY BEACH, S.C. (WCBD)- Short-term rentals have been a point of contention for months in the Lowcountry, and we’re starting to see how a cap on rentals is impacting real estate on Folly Beach.
Back in January, homeowners on Folly Beach voted to put a cap on the number of short-term rentals allowed on Folly.
In 2022, 75 properties were sold on Folly Beach, but this year, that number has plummeted.
“We have actually seen a 70% decrease in closed homes,” broker in charge of Healthy Realty, Mikki Ramey said.
Ramey blames the decrease on the short-term rental cap.
“Have short-term rental caps impacted real estate? It definitely has, there’s no denying that it’s made an impact,” Ramey said.
Only 800 short-term rentals are allowed on Folly now.
Ramey says the cap pushes away many buyers who are in the market for an investment property and adds that property values have also decreased by 40%.
Looking at the bigger picture, Ramey says the cap could have an economic impact for years to come.
“It may impact local businesses on Folly Beach. There will still be plenty of vacationers there, but it might have some impact on local business too,” Ramey said.
Over on Isle of Palms, the city is gearing up to take a vote on a short-term rental cap as well.
However, looking at what has happened to the Folly Beach real estate market, some city council members like Bliar Hahn say they are concerned.
“Obviously we don’t know what’s going to happen if this referendum passes, but the best guess we have is that the same thing will happen here that happened at Folly Beach,” Hahn said.
Hahn says IOP has a lot of amenities, like one of the top police and fire stations in the area, a recreation center, and a pristine beachfront.
Most of that is paid for by tourists renting homes.
Hahn says putting a cap on rentals would create tax hikes for residents.
“95% of Isle of Palms annual budget is paid for by vacation rentals, only 5% is paid for by permanent residents,” Hahn said.
Isle of Palms will vote on the short-term rental cap on November 7th.