Beaufort’s Short-Term Rental Boom: Navigating Growth and Evolving Regulations

Beaufort, like many charming coastal communities, has experienced a significant surge in short-term rentals (STRs), with platforms like Airbnb and Vrbo becoming increasingly popular. This trend, particularly accelerated post-pandemic, has seen a dramatic increase in available STR units. Between 2022 and 2025 alone, Beaufort witnessed a rise of over 42%, with STRs growing from approximately 175 to 249 units. This expansion is part of a larger trend that began around 2018 when the city first introduced regulations for STRs, a stark contrast to the minimal presence of such rentals in 2012. The growth, estimated at least 30% from 2019 to 2022, is driven by both traveler demand for unique stays and property owners seeking investment opportunities.

Economic Engine: The Financial Impact of Short-Term Rentals

The proliferation of STRs has a tangible positive impact on beaufort‘s economy. Tax revenues for the city have seen a substantial increase, growing by 25% over a four-year period. Hospitality and accommodations taxes are a crucial component of Beaufort’s General Fund, contributing over 16% and ranking as the third-largest revenue source. Since 2018, these taxes have generated $18.6 million, with an additional $736,557 from business license taxes since 2015. Tourism is a cornerstone of Beaufort County’s economy, supporting approximately 38.7% of all jobs, equating to nearly 41,893 positions. The overall economic impact of the tourism and hospitality industry in the county is estimated at a staggering $1.4 billion, with every dollar invested in destination marketing yielding a seven-dollar return for the city and its taxpayers.

Shifting Sands: Regulatory Adjustments and Community Concerns

However, this rapid growth and the concentration of STRs in residential areas have led city officials to reassess existing regulations. The primary goal is to preserve the tranquil character of Beaufort’s neighborhoods, which have faced increased complaints regarding noise, parking, and property maintenance. A key concern is a loophole in current rules that allows multiple STRs on a single property without counting towards a neighborhood’s cap. This can lead to clusters of STRs, creating “neighborless neighborhoods” and diminishing the residential feel of certain blocks.

The 6% Cap and Its Loopholes

Beaufort’s Short-Term Rental Ordinance currently limits STRs to 6% of residentially zoned parcels per neighborhood, with an exception for “The Point.” This cap aims to manage STR density. However, its effectiveness is compromised by the loophole where only the licensed parcel, not individual rental units on that parcel, counts towards the limit. This means one property could host up to three STRs but only count as one unit against the cap. As of May 2022, roughly one-third of residential units (around 10,000) were used as STRs at some point during the year, a significant increase. Notably, neighborhoods at their cap have no waiting list for new applications.. Learn more about Hilton Head Island Packet

Proposed Revisions and Future Outlook

In response, the city is considering several regulatory changes. A significant proposal involves redefining how STRs are counted towards the cap, shifting to “rooftops” or individual units per property rather than licensed parcels. Another consideration is requiring on-site residency for owners using accessory dwelling units (ADUs) as STRs, as most current license holders do not live on the property. The city is also exploring waiting lists for STR licenses in specific neighborhoods to better manage demand.

Owner Perspectives and Tax Obligations

These regulatory shifts present financial challenges for some property owners who relied on STR income to cover mortgage payments and property taxes. Many are exploring alternatives like long-term rentals or fractional ownership. For operators, tax obligations are multifaceted, including South Carolina’s 6% state sales tax, a 1% Beaufort County local option sales tax (totaling 7%), a 2% Beaufort County accommodations tax, and a 3% City of Beaufort accommodations fee. Compliance is monitored through systems like Host Compliance LLC, with fines for non-compliance.

Regional Trends and Housing Affordability

Beaufort’s situation mirrors challenges faced by other coastal communities, such as Myrtle Beach, Hilton Head, Charleston, and Folly Beach, which are also implementing or considering stricter STR regulations. A major concern across these areas is the impact of STRs on housing affordability and availability for long-term residents, as properties are removed from the long-term rental market.

Balancing Growth with Community Well-being

Beaufort’s vibrant tourism economy, attracting nearly two million visitors annually, is a vital economic driver. The city aims to strike a balance between supporting this growth and preserving residents’ quality of life. Ongoing discussions and potential ordinance revisions reflect a commitment to adapting regulations to manage STRs effectively and fairly, ensuring Beaufort remains a desirable place for all.