Town Council of Hilton Head Island on Oct. 13 approved on first reading a rewritten ordinance replacing Title 10, Chapter 2 of the municipal code that governs short-term rentals (STRs), adopting committee-recommended changes that remove an occupancy limit, cap exterior parking and revise fire-alarm requirements.

The ordinance, presented by town staff during the special meeting, keeps the town’s long-standing definition of STRs (residential property rented for less than 30 consecutive days) and preserves the permit requirement but changes several application, safety and advertisement rules. The council adopted three amendments: removal of section 10-2-60(c) and other references to occupancy limits; limiting permitted parking to a maximum of six exterior parking spaces per site; and altering the fire‐alarm requirement language to require systems that meet “the intent” of national fire alarm signaling standards while removing a required manual pull-station requirement.

Why it matters: Council members and dozens of residents debated the changes for hours as part of a broader discussion about neighborhood character, enforcement and the local economy. Short-term rentals account for a large share of visitor lodging on the island; owners, property managers and businesses warned that occupancy caps and fee increases could reduce visitor spending, while residents and some council members argued for stronger safety and neighborhood protections.

Most important provisions and deadlines
- Permit and fee structure: The ordinance retains a permit requirement prior to advertising an STR. The Community Development and Public Services Committee recommended permit fees of $500 for 0–4 bedrooms and $1,000 for 5+ bedrooms; council did not adopt the fee schedule at this meeting and directed the town manager to return with a budget amendment for fee changes at a later date.
- Occupancy: The council voted to remove the proposed occupancy limit language (section 10-2-60(c)) and all other references to occupancy ceilings “at this time,” directing that occupancy, location and use be addressed further as part of the Land Management Ordinance (LMO) rewrite and related work.
- Parking: The ordinance requires off-street, on-site, improved parking and—by council amendment—limits exterior (visible) parking to a maximum of six spaces per site. Garages may be counted in permit review but the adopted amendment clarifies enforcement will focus on exterior spaces.
- Fire and life-safety: The ordinance requires standard safety equipment (smoke detectors, carbon monoxide detectors, fire extinguishers) and adds a combustible-gas detector where propane is used. Council accepted an amendment based on the fire chief’s recommendation to require a monitored alarm system that meets the intent of the National Fire Alarm Signaling Code (NFPA) while removing the ordinance’s mandatory commercial-style manual pull station requirement.
- Compliance dates: Staff presented an effective date of May 1, 2026, for most requirements, with some earlier or later compliance exceptions discussed for existing permits and specific elements. A separate amendment that would have required any new STR permit application filed on or after the adoption date to comply by Jan. 1, 2026, failed in a separate vote.

Discussion and public comment highlights
Town staff reiterated that the draft does not include a minimum-stay requirement, a cap on the number of permits, or geographic restrictions on where STRs may operate. The staff presentation also clarified that permits are nontransferable and that false or inaccurate application information may be grounds for suspension or revocation.

Fire Chief Blankenship told council that the department prefers a continuously monitored system and said, “we could get rid of the manual pull stations, but still have that manual option.” That recommendation framed a council amendment that narrowed the alarm requirement.

Public commenters produced a wide array of viewpoints. Several speakers representing local businesses and property managers warned of economic harm if occupancy limits or high fees were adopted: “This will take a significant chunk out of the business,” said Peter Savarissi, who described owning local ice cream shops and employing island youth. Speakers from Sea Pines, Palmetto Dunes and other resort communities urged focused enforcement of existing rules rather than broader new limits. Others pressed the council to prioritize neighborhood character and fire safety.

Votes and formal actions
- Amendment to revise fire-alarm language (meet intent of national standard; remove mandatory manual pull-station): PASSED, 7–0.
- Amendment limiting permitted exterior parking to a maximum of six spaces: PASSED, 6–1.
- Amendment to remove section 10-2-60(c) and all other occupancy limitations “at this time,” with direction to address occupancy in the LMO rewrite: PASSED, 5–2.
- Attempted amendment requiring new STR permit applications filed on/after adoption to comply by Jan. 1, 2026: FAILED, 2–5.
- Final motion to approve first reading of the ordinance with the adopted amendments (fire-alarm language amendment, exterior parking cap, occupancy removal): PASSED on first reading, 6–1.

What the votes mean: The council approved the ordinance for first reading with the committee’s changes (except the failed short-date compliance amendment and the fee schedule, which council left to a future budget amendment). The second reading will be scheduled per normal ordinance process; staff said a second reading was anticipated in late October but did not commit a final calendar date within the meeting’s record.

Next steps and outstanding issues
- Fees: Council left the proposed short-term rental permit fee structure (committee-recommended $500/$1,000) to be considered later as part of a budget amendment after staff completes an operational-cost assessment.
- Enforcement: Multiple council members and many public commenters called for stronger enforcement resources. Council asked staff to return with details of implementation impacts and enforcement capacity tied to any adopted fees.
- LMO rewrite: Council directed that occupancy, location and use issues be addressed in the Land Management Ordinance rewrite and related overlay or zoning work rather than through this ordinance.

Council members and town staff said the adopted changes were intended to balance safety and neighborhood concerns with the island’s tourism-dependent economy. The ordinance will return to council for second reading and final adoption after staff completes follow-up work identified during the meeting.