North Carolina has long been dubbed “Variety Vacationland” thanks to its unique mix of mountains, beaches, and metropolitan centers.[1] While traditionally, “vacationers” in the state have stayed in hotels or resort lodging, the past decade has seen a surge in travel arrangements made through third-party short-term rental platforms such as Airbnb and VRBO.[2]
Short-term rentals encompass a wide variety of accommodations. Most jurisdictions define a “short-term rental” as “private property rented for a certain period of time for the purpose of business or vacation lodging.”[3] The North Carolina Vacation Rental Act definition adopts a period of up to 90 days.[4] While the short-term rental structure has existed long before web-based home-sharing or vacation rental platforms, the rapid growth of these platforms has dramatically expanded both the scale and visibility of short-term rentals.
However, regulations governing short-term rentals were developed before the rise of today’s large-scale, easily-accessible online industry.[5] As a result, many scholars have noted a “disjunction between the structure of the regulatory system and the industry that is being regulated.”[6]
The current statutory framework provides local governments with zoning laws as the primary tool for regulating short-term rentals.[7] Zoning laws divide land into districts (e.g., residential, commercial, mixed-use) and regulate use and density within the district.[8] Traditionally, “residential use” assumed long-term occupancy by households.[9]However, short-term rentals complicate that assumption. Now, many regulations explicitly classify short-term rentals as “commercial” or something in between, often depending on additional factors.[10]
But zoning authority still has its limits. Cities derive this authority from the state and cannot overstep their boundaries.[11] Cities can only use zoning as a tool to regulate land use, not business activity.[12] Additionally, the regulations must be tied to a location, not ownership or platform use.[13]
North Carolina cities have tested these limits in recent years as private residents continue to push for stricter short-term rental restrictions.[14] Permanent residents tend to show a distaste for frequent guest turnover.[15] Many community members express fears that short-term renters care less about property maintenance and are more likely to damage property or common areas.[16] Others show a general disapproval of loss of neighborhood character attributable to transient residents.[17] With the prominence of vacationers in short-term rentals, many complain about noise, parking, and overcrowding.[18] The common thread underlying all of these complaints is a decrease in property value. Even outside the neighborhood, advocates for affordable housing often criticize Airbnb and short-term rentals for their role in making home ownership less attainable, as many homes are taken off the market and used as vacation rentals.[19]
Despite these protests, North Carolina has continued to push back on local efforts to regulate short-term rentals through means other than traditional zoning.[20] The state appreciates that short-term rentals are a significant and growing component of its visitor economy.[21] From a high-level perspective, short-term rentals offer apparent benefits to renters, hosts, and the city at-large, providing flexibility, supplemental income, and more efficient use of residential space. This economic boon only loses its luster when it moves into (or, rather, rents out) the residence next door. However, while this entrepreneurial use of residential space defies traditional land-use expectations and occupies a difficult-to-classify position within existing regulatory frameworks, local governments cannot outright ban or unreasonably restrict such rentals.
In 2023, North Carolina Senate Bill 667 was proposed to protect the state’s short-term rental economy.[22] The bill aims to limit local governments’ authority to impose registration, licensing, or operational restrictions on homeowners seeking to rent out their residence.[23] While the bill has not yet been enacted, its introduction reflects the promise the state sees in short-term rentals and signals legislative caution toward expansive local regulation.
Taken together, these developments underscore the unsettled nature of short-term rental regulation in North Carolina. While cities continue to face pressure from residents to address neighborhood and housing impacts, their regulatory authority remains constrained by state law—leaving short-term rentals squarely at the disjunctive intersection of tourism, housing policy, and the limits of local power.
[1] The “Variety Vacationland” tourism campaign dominated the state’s tourism marketing efforts from the 1930’s to the 70’s and the moniker remains a beloved, though antiquated, nickname. See Bryan Mims, How North Carolina Became ‘Variety Vacationland,’ Our State (July 23, 2015), https://www.ourstate.com/how-north-carolina-became-varietyvacationland/.
[2] Thomas S. Walker, Searching for the Right Approach: Regulating Short-Term Rentals in North Carolina, 96 N.C. L. Rev. 1821, 1822 (2018)
[3] Id.
[4] N.C. Gen. Stat. § 42A-2–37.
[5] See Walker, supra note 2, at 1826.
[6] Eric Biber et al., Regulating Business Innovation as Policy Disruption: From the Model T to Airbnb, 70 Vand. L. Rev. 1561, 1565 (2017).
[7] See Eugene McQuillin, Constitutional Validity of Zoning Under the Police Power, 11 St. Louis L. Rev. 76, 76 (February 1926).
[8] Id.
[9] David W. Owens, Land Use Regulation of Short Term Rental of Residential Property, UNC Sch. of Gov’t (2023), https://www.sog.unc.edu/resources/microsites/planning-and-development-regulation/land-use-regulation-short-term-rental-residential-property .
[10] Id.
[11] See McQuillin, supra note 7.
[12] Patricia E. Salkin, American Law of Zoning § 3:2 (5th ed. 2023).
[13] Id.
[14] See, McDougald v. White Oak Plantation Homeowners Ass’n, Inc., 904 S.E.2d 180, 180 (N.C. App. 2024) (holding an HOA covenant prohibiting use of property for “business” overly broad as applied to bar short-term rentals); Schroeder v. City of Wilmington, 872 S.E.2d 58, 59 (N.C. App. 2022) (invalidating Wilmington’s ordinances, which restricted short-term rentals through a registration and lottery process).
[15] See “NC Short-Term Rentals Regulation: A Breakdown Of The Changes,” Cedar Management Group (2023), https://www.cedarmanagementgroup.com/nc-short-term-rental-regulation/.
[16] Id.
[17] Id.
[18] Id.
[19] Samantha Delouya, As the Housing Affordability Crisis Deepens, Airbnb and VRBO Face Backlash, CNN (October 28, 2024), https://www.cnn.com/2024/10/28/economy/housing-affordability-airbnb-vrbo-backlash.
[20] See “NC Short-Term Rentals Regulation: A Breakdown Of The Changes,” supra note 7.
[21] Id.
[22] S.B. 667, 2025-2026 Gen. Assemb., Reg. Sess. (N.C. 2025).
[23] See Clark Twiddy, What Senate Bill 667 means for North Carolina and its visitor economy, The Carolina Journal (May 8, 2023), https://www.carolinajournal.com/opinion/what-senate-bill-667-means-for-north-carolina-and-its-visitor-economy/ .
