Hilton Head council adopts short-term rental ordinance changes on 1st reading; occupancy limits removed

Hilton Head Island’s Town Council on Monday approved on first reading a rewritten short-term rental ordinance after agreeing to remove proposed occupancy limits and to adopt changes on parking and fire-safety language.

The council voted 6–1 to adopt the ordinance as amended. The package that passed trims a proposed occupancy table from the draft and makes the six-space parking cap apply only to exterior parking; it also replaces a requirement for a commercial-style pull-station fire alarm in some properties with a narrower, chief-recommended provision that requires monitored systems meeting the intent of the national fire alarm code for homes 3,600 square feet or larger.

The ordinance would repeal and replace Title 10, Chapter 2 of the municipal code governing short-term rentals. Staff told the council that most other requirements in the draft remain: a permit is required before advertising, permits are nontransferable and nonrefundable, false information is grounds for suspension or revocation, some homes must install combustible-gas detectors and other safety equipment, and routine inspections can occur with 48 hours’ notice. Staff said the ordinance as drafted would take effect May 1, 2026, with the fire-alarm exception for qualifying existing permits pushed to a later compliance date discussed in the staff report.

Council member Patsy Bryson moved adoption on first reading with two technical changes tied to compliance dates and an occupancy adjustment for very large homes; that motion was amended during debate. Council member Desimone successfully moved to remove the occupancy table and to defer questions about occupancy, location and use to the town’s pending Land Management Ordinance (LMO) rewrite. A separate amendment to specify that the parking cap applies to exterior spaces passed 6–1. Council member Tammy Becker’s amendment to change a contentious fire-alarm clause to reflect the fire chief’s recommendation passed unanimously.

The staff presentation reviewed the committee recommendation and highlighted several details that staff said would not change: the ordinance would continue to apply to residential properties rented for less than 30 consecutive days and would not apply to hotels, motels or similar uses. Staff also explained a proposed shift of the permit year from Jan. 1–Dec. 31 to May 1–April 30 to align with the business-license cycle and give finance and permitting systems time to adapt.

Fire Chief (referred to in the record as Chief Blankenship) told council members the town can accept monitored residential security systems that integrate smoke detection provided they meet the intent of the National Fire Alarm and Signaling Code. “We could get rid of the manual pull stations, but still have that manual option,” the chief said in explaining the compromise language offered to council.

Public comment filled more than two hours. Property managers, local business owners and many short-term rental owners argued the proposed 2+2 occupancy cap and higher permit fees would harm Hilton Head’s tourism-driven economy, cost jobs and penalize responsible owners and longtime investors. Examples cited during public comment included local lodging revenue and employment figures and appeals for enforcement of existing code rather than new restrictions. “This will take a significant chunk out of the business that we have on the island,” said business owner Peter Savarissi, who described hiring local youth and urged the council to consider economic impacts to small businesses.

Other speakers — including long-term residents and several council members during the debate — said occupancy and the growth of short-term rentals have strained neighborhoods and the local housing supply and argued the council should address occupancy and location as part of the LMO rewrite. Several callers urged more reliable data, an economic impact study and stronger enforcement before adopting occupancy caps. “We need stronger enforcement,” one council member said during the session, urging staff to ensure the rules the council does adopt are enforced.

The measure passed Monday is a first-reading adoption; the council will schedule a second reading before final passage. Council members who supported removing the occupancy table said the LMO process will allow more geographically targeted rules. Those who opposed removing occupancy said acting now would begin to address neighborhood impacts more quickly. The record shows votes on the sequence of amendments: the fire-safety wording passed 7–0, the exterior-parking specification passed 6–1, the removal of occupancy passed 5–2, and the final adoption passed 6–1.

Council members asked the town manager to return with implementation details, including any budget amendment to set permit fees officially; staff told the council that permit-fee changes would be brought forward in a future budget amendment so finance can evaluate operational impacts and enforcement costs.

The council adjourned after public comment and final votes.