An increase in long-term rental units could cost Myrtle Beach millions. Here’s the plan
Big changes could impact future development in Myrtle Beach.
City of Myrtle Beach leaders feared losing revenue if too many property owners converted their short-term rentals for long-term use.
So, in April 2024, city leaders temporarily banned these conversions, and a proposed change to Myrtle Beach’s zoning code could make that moratorium permanent for specific properties.
The Myrtle Beach Planning Commission will consider amending its code of ordinances regarding short-term rental zoning. The proposal creates a new overlay zone prohibiting converting a building or structure with more than two units initially designated for short-term rentals to long-term use for commercial districts east of Kings Highway.
Myrtle Beach defines short-term rentals as ones that allow an occupant to stay for more than 90 days in a row. The Planning Commission will review the proposal on Tuesday, Nov. 19, 2024.
City of Myrtle Beach Director of Public Meredith Denari said the draft amendment is still subject to change. Denari said the zoning overlay plan could go on the city council’s agenda Jan. 1, 2025, if approved by the planning commission. She added that the city council must pass the zoning overlay on two readings before it goes into effect.
Despite Myrtle Beach’s transition from a seasonal economy into a more year-round one, some of Myrtle Beach and Horry County’s revenue derives from taxes related to vacationers paying sales taxes and hospitality fees.
A city map shows that most Myrtle Beach short-term rentals are allowed near the oceanfront between Farrow Parkway and 82nd Parkway. The permanent ban follows an initial moratorium earlier in 2024 and a study that claimed the city would lose millions in tax revenue if thousands of short-term rental owners converted their buildings to long-term use.
Enacted in April 2024, the original moratorium expires in January 2025. The ban included properties within city limits near the ocean, specifically between Grande Dunes Boulevard and the Highway 17 and Ocean Boulevard intersection. However, the city could extend the proposal so the new overlay amendment can receive full approval. During its city council meeting, Myrtle Beach passed a 60-day extension to the freeze on the first reading, Nov. 12, 2024.
During the city council meeting, Myrtle Beach City Manager Fox Simons said the moratorium extension may be unnecessary depending on the planning commission’s decision.
In an April 2024 interview, A city spokesperson said Myrtle Beach passed the initial moratorium to study the impact of losing a significant amount of short-term rentals. At the time, the city noticed a growing trend of property owners requesting to convert their short-term designated properties.
The report became public in September 2024 and found Myrtle Beach could lose $2.48 million in tax revenue for every 1,000 short-term rentals changed, while Horry County could lose an estimated $1.19 million. The study also found that every 1,000 units converted could lead to an estimated 48 lost jobs.
Greenville, S.C.-based Arnett Muldrow & Associates conducted the report, and firm principal Tripp Muldrow said in an October 2024 interview the city’s zoning code needed updating to address the nationwide housing crisis, also hurting the Grand Strand area.
However, Muldrow said the current tax code relies on visitors, and new revenue generated by long-term rentals wouldn’t address the shortfall in lost revenue.
“There’s always the possibility, particularly on the services side, that it would either be a wash or the conversions would decrease costs,” Muldrow said. “That turned out not to be true.”
