Myrtle Beach Faces Lawsuit Over Short-Term Rental Ban

News Summary

Myrtle Beach’s recent decision to impose a ban on short-term rental conversions has led to a lawsuit from property management firm MBSC Property South. The firm claims the ordinance violates federal fair housing laws and harms the local economy by restricting rental income. This legal battle highlights tensions between city leaders aiming to preserve the tourism economy and property owners concerned about losing revenue. The outcome of this lawsuit could have significant implications for property management and rental regulations in the area.

Myrtle Beach Faces Lawsuit Over Short-Term Rental Ban

In a surprising twist just a couple of months after Myrtle Beach leaders decided to ban short-term rental conversions across a hefty 114 city blocks, MBSC Property South, a well-known property management firm, has stepped into the legal ring with a lawsuit. The firm argues that this ban infringes on federal fair housing laws and is raising quite a few eyebrows in the community.

The Core of the Complaint

The lawsuit alleges that the recent ordinance prohibits properties from being rented for more than 90 days, a move that MBSC claims cuts off millions in potential revenue and shows a worrying trend of driving out affordable and workforce housing from the oceanfront area. According to the city council, the measure was approved in December to help regulate rentals between Kings Highway and the oceanfront, and to preserve the tourism-driven economy.

However, MBSC isn’t happy about it. A city analysis suggests that converting 1,000 homes from short-term to long-term rentals could lead to a staggering loss of $7.61 million in local, county, and state revenues. This includes about $2.48 million that would come directly from the city in taxes and licensing fees. That adds up to a lot of money being left on the table! No wonder property owners and managers are feeling the heat.

Property Owners Weigh In

unprecedented in the area, indicating that it’s not something Myrtle Beach has encountered before.

Legal Pathway and Allegations

The lawsuit, a lengthy 23-page complaint filed in Horry County Common Pleas Court, pinpointed some serious claims. MBSC reportedly owns 169 condominium units at the Sandcastle Oceanfront Resort and manages an additional 71. Interestingly, the Sandcastle Resort is classified as “mixed high use” (MU-H), which has no special regulations for long-term rentals, thus complicating the situation even further.

MBSC’s attempts to establish long-term rentals at the Sandcastle have faced roadblocks, with their application for a business license being rejected in March 2024. Adding to that, another application for a “project-based housing choice voucher program” was denied mere weeks after it was submitted.

The Broader Implications

The lawsuit argues that the conversion ban breaches constitutional rights related to private property ownership, specifically mentioning Article 1, Section 13 of the state constitution. It claims that the ordinance essentially sacrifices private property rights to benefit the city’s tourism industry, a statement that’s sure to stir up debates.

Financially speaking, MBSC alleges they’ve been prevented from realizing nearly $6.5 million in profits due to this ban and have racked up near $10 million in losses, including interest costs and legal fees. Unsurprisingly, the lawsuit is seeking unspecified financial damages and points to numerous issues including due process violations and regulatory takings.

What Lies Ahead?

As Myrtle Beach officials voted unanimously in favor of these new zoning regulations, it becomes crucial to see how this lawsuit unfolds. With both sides holding strong opinions and interests at stake, the outcome could set a significant precedent for property management and rental regulations in the area. Stay tuned, folks! The Myrtle Beach community is in for a rollercoaster ride as this legal saga plays out.

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Additional Resources

• AOL News: Myrtle Beach Ban on Short-Term Rentals
• Wikipedia: Myrtle Beach
• WBTW: Myrtle Beach Lawsuit Over Rental Ordinance
• Google Search: Myrtle Beach short term rentals
• WNCT: North Myrtle Beach Settlement
• Encyclopedia Britannica: Real Estate
• WMBF News: Myrtle Beach City Council
• Google News: Myrtle Beach rental ordinance