:
US: Folly Beach City Council has approved a temporary moratorium on most new short-term rental licences after a judge struck down the South Carolina destination’s existing 800-licence cap.
Council members voted 4-1 in favour of the moratorium on 26 August, following its first reading one week earlier.
The measure will pause most new licence applications while the city completes a study of its short-term rental market and considers new regulations. The freeze is expected to remain in place until the study is completed or the moratorium expires in 2027.
Existing operators will still be able to renew their licences. Exemptions also apply to applicants already offered a licence through the city’s waitlist, owner-occupied properties rented for up to 72 days annually and 54 applications submitted immediately after the court ruling.
The decision follows a 14 August ruling by a Charleston County judge, which invalidated Folly Beach’s cap of 800 non-owner-occupied short-term rental licences and its registration permit fee.
The court found that the cap had been improperly introduced through a public referendum in 2023. The permit fee was also ruled to be an unauthorised tax under South Carolina law.
Folly Beach has appealed the decision. An automatic ten-day stay initially prevented the court order from taking immediate effect while the city considered its response.
Mayor Chris Bizzell said the moratorium was intended to limit the city’s legal exposure while the appeal and regulatory review continued.
The city plans to use its previously commissioned STR study to assess future regulatory options. The ruling does not prevent Folly Beach from introducing another cap through the standard city council process.
The dispute has divided residents and rental operators. Supporters of the cap argue that limits are needed to protect the island’s residential character, while some property owners claim the policy has affected property values without resolving local housing pressures.
Highlights
- Folly Beach has approved a moratorium on most new short-term rental licences.
- The measure follows a court ruling that overturned the city’s 800-licence cap.
- A judge found that the cap was improperly enacted through a referendum.
- The city’s STR registration fee was also ruled to be an unauthorised tax.
- Existing licence renewals and several other categories are exempt from the moratorium.
- Folly Beach has appealed the court’s decision.
