Judge’s ruling reopens Folly’s bitter STR debate as city moves to preserve 800-license limit
by Lorne Chambers | Editor
For more than three years, few issues have divided Folly Beach quite like short-term rentals. The debate has touched nearly every nerve on the island: property rights, tourism, neighborhood character, housing, the local economy, and even the question of who gets to call Folly home.
In February 2023, voters narrowly approved a citizen-led referendum capping the number of investment short-term rental licenses on the island at 800. The vote followed years of debate over the impact vacation rentals were having on Folly’s residential character, property rights, tourism economy, and future.
But on Aug. 14, Circuit Court Judge Thomas J. Rode ruled that the city’s voter-approved ordinance had run afoul of state law, finding that the referendum improperly imposed what amounted to a tax, a power reserved for elected government rather than voters through the referendum process. Rode struck down the city’s separate revenue-based STR registration fee, finding that it functioned as a tax rather than a fee for a specific service.
The ruling did not decide whether 800 is an appropriate number of STRs for Folly Beach. Instead, it took aim at the legal mechanism used to put the cap in place.
And just like that, an issue many hoped had finally begun to settle was wide open again.
“We knew the judge was getting close to a decision,” Mayor Chris Bizzell said. “But we were a little surprised at how he came to it.”
Five days after the ruling, residents packed City Hall for an Aug. 19 special meeting. Council almost immediately entered executive session to receive legal advice from City Attorney Joe Wilson, leaving the packed council chambers waiting for roughly an hour and a half.
When council emerged, it voted 5-1 to authorize an appeal of the ruling and moved toward temporarily halting most new STR licenses while the city determines its next move. Councilman Blair Holladay cast the lone dissenting vote. Councilmember Katherine Houghton was not present.
At a second special meeting on Wednesday, Aug. 26, council approved the moratorium on second and final reading by a 4-1 vote, with Skip Fink, Billy Grooms, William Farley, and Bizzell voting in favor and Holladay again opposed. Councilmembers DJ Rich and Houghton were absent.
The city filed its appeal Aug. 21.
“The timeline on these things can vary wildly,” Bizzell said when asked when he expected to get a ruling from the appellate court.
Meanwhile, another important vote is coming much sooner. On Sept. 8, council is expected to consider an ordinance that would effectively reinstate the 800-license cap through council action rather than via a voter referendum.
Bizzell described the move as largely procedural. The city, he said, continues to believe the cap itself is legally sound.
“We need to make sure what we’ve got is defensible,” he said.
CAUGHT BETWEEN THE RAINDROPS
At the center of the lawsuit is Park Lane Partners LLC, a name plaintiffs Chris Cooper and his wife, Elizabeth Spratt Cooper, say has led to misconceptions about who’s suing the city. Some on social media have claimed that Park Lane LLC is backed by powerful real estate organizations, while others have gone so far as to suggest they’re a lobbying group for Airbnb. None of that is true.
“We’re one family with one house,” Chris said. “We’re not a Trojan-horse corporation sneaking in and buying up a bunch of houses on Folly.”
Both Chris and Elizabeth have deep South Carolina connections. Chris grew up in Charleston and has been visiting Folly for the better part of 50 years. Elizabeth grew up in Fort Mill and visited the island when she was growing up and while her brother attended The Citadel.
“We wanted our girls to have a connection to South Carolina and the Lowcountry and feel it was their home, too,” Elizabeth said.
The couple bought an older West Side house in 2016 that was already being used as a short-term rental. They continued renting it while using it themselves several weeks a year.
During the pandemic, their relationship with the house changed.
“We reassessed our lives and decided we just wanted to be here more,” Elizabeth said. “We wanted to retire here and wanted to have our kids and grandkids have a place here.”
According to the Coopers, the older, ground-level home was prone to flooding and wasn’t what the couple envisioned as a retirement home. They ultimately decided to rebuild, filing for permits in September 2022.
Then the rules began changing.
The following month, the city imposed a moratorium on new STR licenses as the citizen referendum moved forward. When voters approved the cap in February 2023, the Coopers weren’t particularly concerned.
“We were watching the vote and thought, ‘Wow, can’t believe that’ but we said, ‘Good thing we had a license,’” Chris recalled.
The new house was completed, but the couple soon discovered their understanding of their STR status differed from the city’s. Because they rebuilt the house, they needed to obtain a new license, even though it was on the same piece of land.
“They gave us a license, but told us we couldn’t rent until we got our Certificate of Occupancy,” Chris said. “But then they took our license back.”
Councilman Holladay has described property owners caught in similar transitional circumstances as being “caught between the raindrops.”
“I don’t have a strong opinion on the cap or no cap; we just felt like we got stuck,” Elizabeth said.
The couple eventually sued. Despite prevailing in the recent ruling, they don’t consider the dispute over.
“Our goal all along is just to get our license back,” Chris said. “You don’t ever want to fight City Hall. It is a hard thing to do. But we’re in it now and we’re not going to walk away.”
“We have not accomplished our goal,” he added. “We still do not have our license.”
For Chris and many others on the island, the fight raises a larger question about what kind of beach community Folly wants to become. He worries that increasingly restrictive rules could ultimately make the island accessible only to those wealthy enough to own property here without needing rental income to help support it.
“It was South Carolina’s last great, real beach town,” he said. “And now some people are attempting to turn it into another Kiawah or Seabrook. Folly should not be a refuge of the elite.”
‘THE STUDY WAS THE COMPROMISE’
Even as the lawsuit worked its way through court, Folly had begun another effort to revisit its STR rules.
Earlier this year, the city committed $50,000 for an independent study examining the ordinance and its impacts, an effort Bizzell has said is intended to bring objective data to a debate long driven by competing claims.
The city expects responses to its request for proposals this fall, after which a consultant will be selected and the scope refined.
“Our intention is to inform any kind of policy changes moving forward,” Bizzell said. “Hopefully people see the objectivity that is brought to it.”
The current moratorium, he said, helps maintain the status quo while that work proceeds.
“It gives us time to finish the study,” Bizzell said.
But Holladay argues that logic raises an obvious question: If the city is waiting for an independent study to determine whether its STR policy should change, why reenact the 800-license cap before seeing the results?
“The study was the compromise,” Holladay said in a statement he read at the conclusion of council’s Aug. 26 special meeting.
Holladay will be overseas for work during the Sept. 8 meeting and objected to council taking up such a consequential issue before the results of the study were in hand. More broadly, however, he questioned why council should act on the cap while both a moratorium and an appeal are already in place.
“Why would a study even matter if we reinstate a new cap?” he asked.
Holladay has been the lone dissenting vote during council’s recent special meetings and urged his colleagues to be patient and not rush to adopt another cap until everyone sees the results of the study.
“Please give all citizens a chance to see the verdict of the study before you decide to simply readopt the cap in a few weeks,” he said.
For Bizzell, the study remains valuable regardless of what happens Sept. 8 and can guide future changes to an ordinance that has divided the island for years.
“We’re never going to make everybody happy,” he said. “But I’m really hoping that this doesn’t reopen all the old animosity. Even if they disagree, let’s discuss civilly and respectfully. Because we don’t need to go down that road again.”
Holladay, despite opposing the city’s current course, struck a similar note about the community itself.
“Despite the rhetoric, we all love the same place,” he said. “We all agree on that one truth.”
For now, however, the question that divided Folly in 2023 is back before City Council, this time without a referendum.
The court fight continues. The independent study has yet to begin. And the future of Folly’s 800-license cap is, once again, unsettled.
