North Carolina Short-Term Rental Owners Steel Themselves for Long Recovery

Since late 2023, Spotlight has enjoyed a content sharing partnership with The Assembly, a new, digital-first magazine in North Carolina that has produced remarkable coverage of the devastating effects of Hurricane Helene in the state. This story is just one example of the crucial work they continue to do and we urge our readers to visit The Assembly’s Helene coverage, which also offers ways to donate time or resources to the recovery from this once-in-a-generation catastrophe. 

Hospitality is more than a job for Lindsay Levine: It’s a vocation. The Woodfin resident has spent two decades in the industry, first in Columbus, Ohio, and now as a server at the upscale Edison sports bar in Asheville’s Omni Grove Park Inn.

“I love serving people, creating experiences, hosting,” Levine said. “Even at almost 37, I genuinely love that part of the business.”

When she and her husband, Jay Levine, himself a 30-year industry veteran, decided to move to Western North Carolina in 2017, they knew they wanted to incorporate hospitality into their home routine as well. The two built a new house with a walkout basement unit that they operated as a short-term rental through Airbnb, with a focus on connecting with guests like an old-fashioned bed-and-breakfast.

The rental proved both personally fulfilling and a critical part of the couple’s income mix. The Levines earned high nightly rates and saw close to 100 percent occupancy from October through December most years, even throughout the COVID-19 pandemic, which gave them a financial cushion during Asheville’s traditionally slow winter tourism season. The extra money allowed the Levines to send their daughter to a private middle school and start building her college fund.

Hurricane Helene’s arrival in late September threw that future into doubt.

Although their house was spared from falling trees and flooding, the Levines, like practically everyone else in the region, lost power, water, and Internet service due to Helene. Several thousand dollars in fall bookings canceled within days of the storm. At the same time, the Grove Park Inn and many other hospitality businesses closed their doors for weeks. “We got a double whammy with the loss of income,” Lindsay Levine said.

Stories like the Levines’ have been playing out for short-term rental operators across Western North Carolina. AirDNA, a rental industry data firm, estimates that 85,000 short-term rental room nights in Asheville were canceled in the first three weeks of October alone, up sevenfold from the area’s usual cancellation rate. The Buncombe County Tourism Development Authority, which administers local occupancy taxes collected from such rentals, has not yet released October’s sales data, but September revenue from vacation rentals was 50 percent lower than in 2023.

Over the past decade, short-term rentals have become a massively important—and majorly controversial—segment of the region’s tourism economy. Revenue from the short-term sector in Buncombe County grew from less than $33 million in the 2015-16 fiscal year to more than $232 million in 2023-24. These rentals now represent more than a third of the county’s total lodging sales, up from 13 percent in 2016, and provide a critical side hustle for many people like the Levines.

At the same time, affordable housing advocates say vacation rentals have taken over properties that were once available to long-term residents and driven up housing costs. A 2022 study commissioned by Buncombe County found more than 5,200 short-term rentals, representing about 4.5 percent of all county housing stock and more than two-thirds of its “rental housing gap,” the difference between available units and demand by long-term residents.

In response to those concerns, Asheville banned new whole-home short-term rentals in 2018, and Buncombe County tasked a special committee with considering stricter regulations for unincorporated areas in August. (That work, scheduled to conclude in November, was suspended after the storm.)

Helene and its aftermath have placed Western North Carolina’s already tight rental economy under unprecedented stress. Short-term rental operators are struggling with drastically lower revenues, while those hunting for long-term residences continue to find few affordable options. Both groups increasingly fear that, even as the mountains slowly recover, they won’t be able to afford their lives as they were before the storm.

Inhospitable Conditions

For Asheville residents, everyday life has returned to a semblance of normal. The city’s water system, which had been inoperable or under a boil water advisory for nearly two months, restored regular service on November 18. While the banks of the Swannanoa and French Broad rivers remain lined with debris, roads have largely reopened. Grocery store shelves are once again full.

But the storm’s impact on the region’s tourism market continues to reverberate and likely will do so for months to come. Buncombe’s tourism authority projects that monthly lodging revenues will stay depressed by 30 to 45 percent through at least June, shaving more than $10 million off projected occupancy tax collections for the year. Visitor spending in the last quarter of 2024 is expected to be $584 million less than previously projected, a crash of about 70 percent.

Those projections line up with the experiences of Chip Craig. The owner of Greybeard Realty, the region’s largest manager of short-term rentals, he oversees roughly 240 properties across Western North Carolina. His company’s October bookings were down 84 percent compared with 2023; January remained 40 percent below last year’s benchmark.

Greybeard has been through major disruption before, Craig said, during the first months of COVID-19 restrictions. “The difference is, after two months [of COVID], everything pointed at short-term rentals in the mountains. It came roaring back, and we had our best year ever,” he continued. “This is completely different—it’s going to be a long haul.”

During the pandemic, Craig said, many travelers preferred short-term rental homes over hotels to ease social distancing from other tourists, and visitors embraced the mountains for their open-air recreation opportunities. But even months after Helene, many of those outdoor attractions remain off limits. More than 84 miles of the Blue Ridge Parkway remain closed due to storm damage. Trails in the Pisgah National Forest and North Carolina Arboretum are still under repair.

Although Greybeard has provided some rentals to displaced families and recovery workers at reduced rates, that income doesn’t come close to the usual revenue. The Federal Emergency Management Agency has sought to place storm survivors into such properties, but Craig said many of the homeowners he works with stay in their properties regularly when they aren’t renting them out, so FEMA’s requirement for an 18-month lease isn’t feasible. (FEMA representatives did not respond to multiple requests for comment.)

That lost income will mean different things to different people. Many Greybeard clients, said Craig, plan on retiring to their vacation homes and rely on the rental income for now to pay off their mortgages. Others, like West Asheville resident Brooke Hendrickson, count on their rentals to make ends meet while living in one of North Carolina’s most expensive cities.

“You have to cobble a lot of things together to make it work here, and when one of those things gets knocked out of the equation, it just puts so much more pressure on those other income sources,” said Hendrickson, who also has gigs as a health insurance agent and writer. She estimated that a third of her household’s income normally comes from the short-term rental; in the months since the storm, that revenue has decreased by at least half.

Hendrickson pointed out that homeowners aren’t the only ones taking a hit from reduced lodging sales. The cleaners, landscapers, and maintenance people who service such properties have also seen income plummet. She said a trusted cleaner she worked with for years decamped to Virginia, with no plans to return to Western North Carolina and its uncertain tourism prospects.

Checking Out?

Given a foreseeable future of reduced income and a gutted workforce, some owners are questioning whether to transition out of the short-term rental market. Online groups for local renters are abuzz with talk about selling their properties or converting them into long-term rentals.

Finding demand for long-term housing certainly isn’t an issue. The office of Gov. Josh Stein estimated that more than 12,000 Western North Carolina residents remained without safe housing at the start of the year, and 2,700 households were still in FEMA-funded hotel rooms as of January 20. And the area’s long-term rental prices remain comparatively high, with real estate website Zillow reporting the median rent for a two-bedroom Asheville apartment at $1,763 compared with $1,203 statewide.

But shifting out of the short-term market can be difficult, particularly for operators who rent just part of their properties. These “homestay” units—the only type of new short-term rental allowed in city limits after Asheville’s 2018 crackdown—usually lack amenities like a full kitchen or laundry facilities that residential tenants need. Hendrickson said converting her unit for long-term occupancy would be an expensive, last-ditch effort, and she plans to wait it out as long as possible.

The conversation is different for the majority of Buncombe County operators who rent an entire home, said Tyler Coon, the CEO of Asheville-based Savvy STR Agents, which has helped investors purchase about 200 rental properties across Western North Carolina since 2019.

Coon said he’s gotten multiple messages from former buyers who now want to sell. Most of those looking to cash out have properties at the lower end of the market, two- or three-bedroom houses bought at attractive interest rates during the COVID-era short-term rental boom.

“A lot of times, people put in $20,000 or $30,000 of Amazon furniture, they put it on the market, and it wasn’t any better than hotel rooms in a house,” he said. Those generic properties could turn a profit as rentals when Asheville’s tourism was booming but were the first to lose out on occupancy when the destination became less attractive due to the storm.

Coon predicts that the return of those rentals to the market could have a positive impact on long-term housing availability. He expects most of them to sell in the $300,000-$400,000 range, relatively affordable for a market where the median sale price is $475,000, according to real estate website Redfin.

There’s been less movement at the higher end of the market, Coon said. Investors who shelled out for larger homes and equipped them with amenities like hot tubs or pickleball courts, he said, have been able to market those properties as destinations and keep up more business since the storm. Those owners also generally have the financial reserves to weather a period of reduced income while covering expenses like cleaning and utilities.

Other hurricane-hit travel destinations offer insights into the interaction between rentals and housing supply, said Bram Gallagher, director of economics and forecasting for AirDNA. He points to Florida’s Cape Coral and Fort Myers, which Hurricane Ian struck in 2022, as a good model for Western North Carolina’s path forward.

Short-term rental demand in those Florida destinations fell by 50 percent year-over-year, Gallagher said, but listings only decreased by about 20 percent. “About 80 percent stayed in the market, which is to say that they were anticipating reopening at some point,” he said. Listings there didn’t start growing again until more than a year after the storm, and occupancy and nightly rental rates both remain below their 2022 peak.

Slow and Unsteady

While more sales of low-end rentals may be a good thing for potential homebuyers in Western North Carolina, affordable housing advocates have been concerned about another possible outcome of the storm.

As residents face economic losses and the state’s highest unemployment rates, groups like Down Home North Carolina worry about a repeat of dynamics that played out in places like New Orleans after Hurricane Katrina and Puerto Rico after Hurricane Maria, in which developers bought distressed homeowners’ properties at steep discounts and converted them into more profitable rentals. That resulted in less housing stock and higher property values, contributing to the displacement of lower-income people, particularly families of color.

While Asheville residents have anecdotally reported a wave of unsolicited real estate offers—including this reporter, who received such texts and calls from at least five separate numbers following the storm—it’s unclear how many have actually sold to outsiders. No text or phone inquiries to phone numbers associated with the offers were returned. On the one occasion when The Assembly spoke to a caller, the representative said they were working for an unspecified “local homebuyer and investor” and hung up when pressed for further information.

If sales driven by desperation do take place, said Autumn Ness, they might not happen for some time. On the Hawaiian island of Maui, where she serves as executive director of the Lahaina Community Land Trust, residents whose homes were destroyed by wildfires in August 2023 also received early offers to sell. But even owners who might consider selling wouldn’t do so while in negotiations with mortgage providers, insurance companies, or federal aid agencies, a process Ness said is still ongoing for many.

“The machine of post-disaster aid and services moves so slowly,” she explained. “Everybody’s been in this weird limbo, not knowing how much money they’re getting, how much money they owe, and what it’s going to cost to rebuild. There are a lot of people waiting to see what the numbers are going to look like.”

Ness’ organization aims to help distressed residents avoid selling property to outside investors. The trust has helped homeowners get better payments from insurance adjusters and more generous terms from lenders, reducing the pressure to sell; in some cases, the trust can buy property and add deed restrictions to keep it as community housing. She advised Western North Carolina to adopt similar programs as recovery from Helene continues.

“If there’s going to be aid attached to things like rebuilding homes in your community, there need to be some kind of protections attached, like reserving those units for your local people and making sure they’re affordable,” she said. “If you’re just rebuilding your community so the investors can move in, that’s what’s going to happen.”

For now, the Asheville area real estate market appears to be relatively quiet. From October through December of 2024, 615 homes sold in Buncombe County, according to Redfin, down more than 31 percent from the same period a year earlier. Coon with Savvy STR Agents said many buyers who would have looked at Western North Carolina have instead been purchasing properties in the Poconos of Pennsylvania, which offers similar mountain tourism opportunities.

Coon expects that the market will eventually recover, both for tourism and investment in short-term rentals. But he admitted that Helene has made him less certain about his sales pitch for the area. Western North Carolina has generally benefited from lower insurance rates than historically hurricane-prone beachfront property, he said, meaning vacation rental investors have lower expenses and potentially greater profits.

“I’ve always been able to lean on the fact that we’ve remained relatively unscathed from most natural disasters,” he said. “Is this something that, because of climate change, becomes more normal? Was this a freak accident, or does this become the new reality every few years, like Florida is dealing with now?”

Daniel Walton is an Asheville-based freelance reporter covering science, sustainability, and political news. He was previously the news editor of Mountain Xpress and has written for The Guardian, Civil Eats, and Sierra. Contact him at danielwwalton@live.com.