Town attorney: Raleigh law limits Matthews’ ability to enforce parts of its short‑term rental rules; staff will pause revocation steps

Town Attorney Daniel Peterson briefed commissioners on a change in state law that affects local control over zoning changes, including parts of Matthews’ recently enacted short‑term rental regulations.

Peterson said a recently enacted state statute limits the ability of local governments to adopt down‑zoning measures that reduce permitted uses compared with prior zoning. Because the town’s short‑term‑rental restrictions relied in part on limiting where short‑term rentals could operate, the statute’s reach‑back provisions create ambiguity about whether enforcement steps that would terminate a short‑term rental operator’s authorization — for example, a two‑strike removal of a rental permit — would constitute an unlawful down‑zoning under the new state law.

The town will continue to accept short‑term‑rental registrations and will document complaints, Peterson said, but staff will pause enforcement actions that would revoke permits based on the ordinance’s zone‑based prohibitions until the legal issues are resolved. He recommended staff prepare a clear, plain‑language explanation for residents summarizing the statutory change and what it means for the town’s enforcement activity. The board asked staff to distribute that explanation to affected stakeholders and neighborhood groups.

Peterson stressed that the change was made by the General Assembly — not by the town — and that the council’s recent public‑safety and nuisance‑focused rules could still be applied where violations are documented (for example, local code or nuisance enforcement) but cautioned that removing a permitted use in particular zones could be interpreted as down‑zoning under the new statute. Staff said it will continue to track the state process and recommended the town wait for additional guidance or clarifying legislation before pursuing permit revocations tied to the zone‑based restrictions.