Here’s why Myrtle Beach, SC wants to stop long-term rental conversions in the city

The City of Myrtle Beach stands to lose millions if more short-term rental properties are converted into long-term rental properties.

It’s that reason that the city council approved a nine-month moratorium on turning short-term rentals into long-term properties. The moratorium would extend to the end of the year.

It’s common practice that some short-term rental owners use their property as long-term options during the off-season. Nationally, some local governments are encouraging short-term rentals convert their properties, according to Avalara.

City of Myrtle Beach Director of Public Information Mark Kruea said that every 1,000 short-term rentals turned into long-term ones equals a loss of $5.7 million in direct economic impact. The city and state receive revenue from short-term rentals via the state accommodation tax and Myrtle Beach’s local hospitality fee.

“From an economic standpoint, if you lose all the short-term rentals or a lot of the short-term rentals along the oceanfront, what effect does that have on the economy?” Kruea said.

Kruea said the Chamber of Commerce provided the $5.7 million statistic.

Myrtle Beach Area Chamber of Commerce Director of Communications Marlane White did not return a request for comment before publication.

The city designates properties as short-term rentals if they allow visitors to stay for less than 90 days. According to a City of Myrtle Beach map, most oceanfront properties zoned for short-term rentals are between Farrow Parkway and 82nd Parkway.

Kruea added that the city became alarmed by the number of requests made by property owners to change the purpose of their units, and thus, the city enacted the moratorium. While the number of requests has increased, Kruea did not have an exact number and said the city didn’t know what was causing the trend.

The initial proposal for the moratorium claimed that hundreds of units had been switched from short-term rentals to long-term rentals and added that the loss of revenue derived from short-term rentals could impact “the City’s ability to provide essential public services.”

The new moratorium covers the east of Ocean Boulevard to Kings Highway, including from Grande Dunes Boulevard to where Ocean Boulevard and Kings Highway intersect, according to the city council proposal.

Kruea said the ban can be extended if needed. Units already converted to long-term rental properties won’t be impacted by the moratorium, and Kruea said the temporary ban doesn’t affect properties licensed or zoned for long-term rentals.

The pause is meant to allow the city to study the impact of this growing trend, but Kruea said he didn’t know if the city had selected a firm or how much a study would cost.

The move comes after Grand Strand short-term renters during the 2023 summer reported mixed results, with the supply of Airbnbs growing in particular. While not uniform, some short-term renters said their units were booked on fewer days than in previous years and that prospective vacationers waited longer to schedule their stays.

Lijun Chen is an Airbnb Superhost and owns a beachfront condo in Myrtle Beach. Chen said the new moratorium will not impact her business, as the longest guest stay is a month. Chen added the 2024 spring season is better than in 2023; however, summer bookings are still slow as customers seem to be biding their time before booking.