City of Charleston SC License Committee, 9 Jan 2023

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City of Charleston License Committee 1/09/2023

A

Ahead and start all right and then I will all right we're ready to start when you are okay.

B

I like to call the license committee meeting to order today is January 9th. The time is now 5 p.m. I'm standing in on the vice chair, standing in for the councilman Gregory who's, the chair. We have a previous commitment and the first thing on agenda is as customary we have an invocation we can buy over heads for a moment. Please, foreign.

B

In the minutes have been uh Mila shortly, I, don't think anyone have a chance to read over the minutes, so we want to defer them as we make. We can do that if uh move for deferral, give you a second I'll. Second it so the minutes was uh approved movement and, second, all in favor by saying aye, aye aye.

B

So we'll move on down. We don't have any old business. We have one item on the new business and that's an ordinance to a man. A pen, offended B business, license class schedule, adopted November, 9th 2021 to chapter 7, Article 2 of the code of the City of Charleston to modify the exemption of lesser of residential buildings and dwellings and um you'll, see it attached to audience attached to your agenda.

B

Anyone have any questions on that.

C

um Grenude I I want to note that, after submitting this uh for y'all's review, we noticed that there was a a typo so I'm going to do a screen share and show you the proposed revisions to the amendment.

C

But it should be chapter 17, not chapter 7, of article two, and we thought it would be better to also correct uh the naics code. Reference should be 531110, the one is missing and to include a separate line item for short-term rentals, so what this amendment would do would be to require a business license for Less source of two or more Residential Properties, and this, if you recall, is back in connection with the rental registry that was passed.

C

The rental registry is a pilot program only, but if you have a property this that you're registering and that you have two or more of them that are long-term rentals, then you'll need to get a business license and so to keep that portion consistent. As far as business license is concerned, this would be a city-wide Amendment, requiring the business license for two or more residential units.

C

So, as I mentioned, the proposed change, which we would recommend that the committee adopt as amended, is what's highlighted here in red and I'm happy to answer any questions that you may have. Yes,.

D

All right, um yeah, I, guess I have a question, so this is city-wide, so anybody that has two residential dwellings that they're renting out would now have to have a business license and that's two anywhere in the City of Charleston. That.

C

D

And currently it's five.

C

Five or more is required. Currently, yes,.

D

Right but but the reason we're doing it is for just those two areas of downtown those two boroughs, I guess so I guess I'm confused. So.

C

When, when the rental registry was passed, we were instructed to come back with an amendment to the business license committee. Excuse me to the business license ordinance so that all of the residential rentals that are long-term, the requirement would be two or more to have that consistent city-wide, but that's separate from just the pilot program. So the registry component is not Citywide, but the business license requirement would be, and that was based on the instructions that that we were given at the rental registry uh vote.

D

Okay, okay, I I was for some reason, I was thinking. This was just affecting just those two just those two boroughs and not city-wide.

B

See what happened uh councilmember when they first started the pilot program. They were talking about only the east side and then early bird I mentioned to them that Ellie Byron, candy bar won this years and years and years ago. So we took the pilot program from the East side and put everybody candy bar.

B

So that's for the pilot program moved to LA, Barra, Cannon bar so with the rental registration part of it. Then we were talking about the um a person who had more than one rental property if you make, and um so when we brought it on it, I think we bought it on that's when they uh we instructed them to go back and take a look at it instead of five rentals to bring it down and it has to be City.

B

Wide can't just be one area when you're dealing with the city, because the justice department to get involved in a few lists doing one area that way and um you'll look at it very poorly. So this is why you have to be City Wide when you're doing anything like that.

B

So that's one reason: I think you know I'm not sure this is a.

D

Little explanation.

B

That I remember about it. You know: okay,.

D

All right um so I mean is.

A

D

Is that right, there's no way to do it, just for the just for the pilot. I guess I mean I man, the.

B

Super with the pilot program, the pilot program, was only for that area when we started up with the pilot program and we were talking about the shot. The short-term rental uh uses then be going city-wide because they're doing something all over the place so positively wise concerned right.

B

So that's why that's why I went to change it so far, City Wide with the rent with the voters uh with the rent on registry, and um we are starting it in Billy bar Canon bar versus the pilot program, but with the railroad is, do we still have to do it Citywide when we come to anything else, purpose to doing it if it spreads over I guess if I'm correct, I'm I'm just trying to press in proper perspective a little bit and.

C

And you know your council member Mitchell you're, absolutely right the concern about keeping the uh the business license requirement to two or more only as part of the pilot program is that you're not applying a license tax uniformly and that's where we could get into trouble. So that's why we recommend that that this would be Citywide as with respect to the business license.

D

All right did you know: I know that Josh Dix got involved in this, and some of the other Realtors um groups I mean. Was that clear? Was that clear that this would be a city-wide business license as far as the Association of Realtors is concerned? Do we were they clear on that? Do we know that I, just I think there's going to be an uproar on this I and I I guess I was confused because I thought it was just going to be or the peninsula area on this do we did?

D

We is anybody talked to Josh Dix on this or any other people from the real estate side.

C

So if anybody has, it would have been Dan riccio um I do know that they're that, with respect to the pilot program, that's that was made clear. I, don't know if that distinction was made with respect to the entirety of the city or not. I can't speak to that right.

B

The pilot program under the board of realtors they was there doing the pilot program. I know that particle.

C

Yes, they were involved.

B

They agree, but that they they agreed to that.

D

Yeah and I know I know they did after some discussion and I guess I just wasn't. I didn't realize until now that this was going to be city-wide any two rental buildings um other than short-term rentals.

B

Wow- and it was it was mentioned- I mean we were discussing it because I remember: uh councilman Gregory mentioned it too, because uh he, you have a quite a few and um so I, don't know what.

A

E

A

Has his hand up as Mia.

F

Magdalene, could you just refresh my memory the rationale behind this.

C

The rationale behind having it be uniform, city-wide.

F

C

That that's that's, because, because of the business license requirement um and the corresponding annual license tax to avoid any equal protection issues, we would need that to be uniformed throughout the city, and we've already impose that within Canonbury Elliott as part of the rental registry pilot program, effective January 1 of this year. So when that passed, we were tasked to come back with a corresponding Amendment to the business license ordinance itself, so that that would be consistent. City-Wide.

F

So so, right now, let's just take cannonborough Elliot. That's the only place where the registry is in effect right. Yes,.

C

F

I own five rental units. What do I have to do and then the same scenario if I own two rental units right.

C

Now, if you're in cannonborough Elliott and you own any rental units, you would have to register it, but.

F

C

You own two or more, you would need a business license. Okay,.

F

C

You're, not in Canon Borough Elliott, you don't need to register as a as a present, but if this is passed, if you have two or more long-term rental units, long-term rental properties, then you do need a business license. This is separate and apart from short-term rentals, which already have a requirement for a business license.

F

Right now, though, city-wide you need a business license for five or more rentals.

C

Right? Yes, yes and that's consistent with state, but.

F

In Canberra Elliott Borough, because we put the registry in it's, it's two: yes been a business license. Yes, so um this is kind of maybe unrelated, but just curiosity, how much um Joshua would a business license cost if I had two units and got a marginal rent of fifteen hundred dollars um each? So that's three thousand dollars a month. Thirty six thousand dollars a year in income. What would my business license be.

E

I am not at my in my office I'm in a different location, but it's gonna be the yeah. Do you have the yes.

C

And I'll I'll share the screen here: okay,.

A

C

You see the great class here, yes,.

F

C

So it would be rate class seven, so sixty four dollars for zero to two thousand and then above two thousand, it's three dollars and ninety cents.

F

Okay, so that'd be 390 times 34 right.

E

F

Who lost the sixty four dollars, so it would be um 196.60.

F

If I had two and right now, I gotta pay that same class. Seven, if I got five rental properties right.

A

E

F

Affordability, the the whole purpose of the of the registry was more about livability and about um livability and accountability for misbehavior of tenants and irresponsibility of landlords and tenants. Correct.

C

To address the number of.

F

Those questions.

C

F

So so is there is there some reason why you can't uh I mean you, you could just do the registry and leave the business license limit alone. That's possible Right.

C

We could do that, in which case what I would recommend uh is we have the fee schedule Amendment to the license to the rental registry, which will be before Ways and Means tomorrow and then Council. We would probably want to recommend uh an additional modification to that to eliminate the two or more language. The.

F

C

Or more so that, if we're going to keep it at five or more, that's fine.

C

But when we go to amend the fee schedule for rental registry, we would probably want to include a red line through that section to keep it to maintain status quo as it is because, ultimately it needs to be consistent.

F

I'm, just you know going back in my mind what the real intent of all this was and um I think it was more about livability and responsibility than anything else.

F

I mean we're not doing this because you know we need to maximize the business license. Income I, don't think.

E

They were when they used the license, as as the teeth for it I think so they can then revoke a license things like that. It's my understanding when I was talking with with Megan Lapointe. This.

F

Is going to be the topic yeah? That was a point right.

B

That was one point I.

F

C

That that is the because there aren't yes, that that's that's correct! That's one enforcement mechanism.

F

It's an important mechanism.

C

Just we eliminated the you.

F

Got any classifications that are more that are even less expensive.

E

No, that's. That's part of the business license standardization, so we have to make them a class seven. If they're that that next code, we have no choice. Okay,.

F

D

So so magaly we can still you what you're saying I think is. We can still enforce the registry, it's just that this was one more tool to to enforce things, but but we could still have the registry, where you're going to be able to track down the owner. I think that was that was the hard part was that we can't track.

D

Sometimes it takes so long and it's so hard to find an owner, because I've got it in an LLC and trying to find out who the person is responsible is is very difficult, but we can still do that part I, believe without this in there is that right. So.

C

What what the mentioned the? What the registry now provides? Is this additional contact information so that we have a person at an address with a phone number Etc that we can reach and that we can um basically cite pursuant to other sections of the code for these livability issues. But one of the additional components by having the business license requirement would be that um that we could basically uh well. Let me before I say something incorrect here.

C

Okay, so it's not expressly line laid out that way, but it yes, it is another enforcement mechanism and what a one consequence of operating without uh registering Again part of the rental registry is that the um each day of the unauthorized unregistered operation of that rental unit subject the uh landlord to a separate offense, which would be through livability as well.

F

And would be subject to um removal of their business license.

F

C

B

C

If you're not complying with the business laws, then it's not late. It's not one of the express Provisions within the uh the rental registry itself, but it's it's elsewhere.

F

And the teeth we have with the registry alone is just a fine and we take you to court.

C

Yes, if you're not registered every day or not registered as a separate offense, no separate violation that that we would that we would enforce through the livability court.

F

And, and do we have a notion of how many people in the city have between two and five rental units or between one and four I guess you'd, say.

C

Within the city I that that's something that I don't think we have put together yet I think we may have some numbers within Canberra or Elliott, um but I don't know that they were entirely accurate and.

F

C

Have them, but that's something: we've been looking at right.

B

I I believe a councilman uh Celia is thinking more about the uh business license so fast when you come to uh Citywide West Ashley area, city-wide.

D

Yes, sir, you know yes, sir, you know I I, think just what mayor tecklenburg was just asking I think there are a lot of people out there that don't have a business license that probably have two rental properties.

D

It may be that they have a house that was either passed down to them or maybe a house that they grew up in and they live in a different house and I think there's a lot of people in that situation that don't have a business license right now and I I think this is going to be an issue if we, if, if this goes through um and yes in West Ashley but I, think in all parts of Charleston um there's a lot of people that own houses that have owned them for a long time, moved in somewhere else and said: hey I'm, going to rent this one out, I'm gonna go move somewhere else and um I I knew a lot of those people because of the business that I'm in so I.

D

Just don't feel comfortable with this, with everybody having to have a business license because they have two rental properties in the city.

D

B

I, don't know how we feel about it. Maybe we might have to.

B

When we have to have this done approve so to speak, so we can get it in.

C

Well, the the rental.

B

C

Is already, in effect, yeah.

B

That's more, in effect, I'm talking about the uh business license with the other amendments that we have to it. Foreign.

B

Yeah, that's already, in effect,.

F

I, just can't I think I, don't remember wearing's hand up, but but yeah.

G

That's been wearing yeah. Thank you, I think I think the mill kind of answered, because I thought it was a pilot program too I from listening. I was thinking.

G

This thing was spreading with and Ashley, so I won't be a quick councilman, Shelia I think this would be a little bit more complicated than we think if it's the pilot, I'm I'm, still supportive of pilot to see whether it works or not, and then we come back and how long was that supposed to run before we would kind of come back and review and assess the effects of the pilot program?

G

F

I think it's going to be a little while six months or maybe even a year before, because you've got everybody signed up right. Six.

G

Months a year or something.

B

Like that, okay, because we know the pilot program is already in effect- we voted on that. That.

G

Means yeah I, remember that part yeah, but I thought it was like we're.

B

Talking more about.

G

The uh Elliott Cannonball was that the area.

B

Exactly right, okay, tomorrow, thank.

G

B

That's where the registry is from, but now we're talking about the the business license that everyone city-wide would have to be into this uh with the business license proposal.

G

B

G

Why would why would that be business-wide I mean city-wide.

C

Because it's a tax because of the license tax, that's associated to avoid any issues on that end. So, alternatively, if if the committee is not inclined to to make this city wide, then I would recommend when the uh fee schedule is up for an amendment for the for the rental registry that we include striking through the requirement for two or more and just keep it at five or more.

G

C

Now that would be an easy fix.

G

Yeah I'm a little confused, so we got this pilot program. This that's an effect, but this piece on the business license that's applying for the whole city. uh When did we vote to do that? If you got two of them.

C

We were at the vote for the uh rental registry. We were instructed to come back if it passed with the corresponding amendment to business license that.

B

Was down at city council when we had told him to go back right, but Mr chairman.

F

Asked magaly I hate to sound thick on this, but see my goal is to get everybody registered and, admittedly, we're trying it in a certain neighborhood first. So what you just said to fix things? If we didn't do this today, um I don't want to backpedal and not have the folks in L.A or Canonbury, not register if they had.

A

C

We would recommend, as part of the vote on the fee schedule, would be an amendment to that to strike through Section. Let's see.

C

7131C just to eliminate that requirement, but that would that would be the only change. But.

F

They'd still have to register if they had.

C

Absolutely two.

F

Units right, yes, okay, we'll um gee, I'm, gonna, I'm gonna, um you know I I mean exactly when we were in staff. Maybe y'all just made more sense to me, but hearing council, member shealy and thinking about this more and the difference between pilot and Citywide I I think it'd be best to hold off on this personally as well, and um let's, let's get through the pilot again my goal long term was more about getting people to register. I.

F

Think one we'll see how the pilot goes, but I I'd like if it goes well, I'd like to see registration occur city-wide. So we know who to contact everywhere, but anyway, I know. That's that's an issue. That'll come back to council later, but this this would probably confuse things and and make it even more difficult, in my opinion, to get that passed down the road. So if, if council is agreeable, I'd like to um vote to defer this mood make a motion to defer. No second.

B

B

This item uh all the paper but by saying aye aye causes eyes. Have it so we'll defer this? If I have any questions or have anyone have any questions uh refer to attorney at city council, but I'm not going to remember all this and I'm not ready to try.

B

You know so is anything else come before the committee before we decided the Gen adjourned.

F

So could I just ask a question while we got Joshua here yes, so normally we would have a annual approval of our rates and all like that, are you telling me that since the the business license rates are kind of standardized Statewide that we don't have to do that every year anymore,.

E

I believe that we put, we still have to do the rates, but we don't do that until are we doing the next month or two because of the license year. Change I.

F

E

Have to approve the whole ordinance, it's just the appendices, whatever whatever that is, but yeah we still have.

B

To do that every year, I, normally we should do in December. One time, I think our first agenda.

E

Yeah, that's right now the license years and starts in vase. So oh okay and.

F

um Your experience, I just never heard directly, was that the transition went smoothly with that change of date and.

E

A little remarkably smoothly yeah, we didn't have nearly the issues that you would. uh You know kind of assume that we must have uh got the word out pretty well so.

F

I know our income was above what we budgeted. So there was, there must have been no loss of income because of it all either.

E

Not that you could tell no, we were substantially over budget, so yeah.

F

Yeah, well, that's that's all good I just thought. While we had you here, I asked you that sounds good.

G

uh Miss Tim I do have a question. This may be another committee, but um Mr mill on on permit building permit fees on what on building permit. Yes,.

F

G

You remember a couple of years ago we tried to police I, think three percent fee onto the building permit and have it go towards affordable housing? We did do it on the business license, but to do it on the building permit. We had to get permission from Colombia from the state I'm just wondering how that was that act. I may have the numbers wrong at the 238 that um apparently passed recently. It's the one that councilman lapel um speaks of. You know having big potentials for municipality I'm, just wondering since that passed.

G

Do we have the right to add a fee to building permit and have it dedicated towards affordable housing, since that act has passed, Julia.

F

A

I certainly didn't light up anytime anytime about fees, I, light up.

C

A

Councilman Waring, that is something we can certainly talk about. You know. Councilman Appel has already brought up a really good idea about tacking on um uh a user fee on hotel rooms and um we're passing those by the municipal Association. So let's, let's throw that in the mix too and see if we can get some feedback because anytime we talk about affordable housing. People get squirrely in Colombia all.

G

Right: okay, that's.

A

G

In other words, if the I always thought home rules should come in on something like that, I don't understand how it's the City of Charleston building permit. It's, not the state of South Carolina building permit why we have to ask the state to um put a field out on our building permit. We don't have to ask the state to put a fee on our business. License. City Charleston business license anyway, so anyway, I thought, I, know, I, think uh Mr, mid, I, think Senator kimson put it in and I think it died in committee.

G

You know, but that was prior to that act. Passing right.

F

G

That gives us a little more potential anyway. Thank you, we'll.

F

Ask about that one too.

B

I mean they they in Colombia, when you get to affordable housing and then I took keys on it anyway.

G

Maybe maybe that's why they passed it down to Mikey.

B

They're not keen on it and I. Remember one time: I brought up and I let you go I brought up uh putting um uh in like in New, York and other places. You know even with housing per se, when you're building housing or half housing, you know and those other big cities. You know you can't go up the way you want to on this, raising the rent but see in South Carolina and all the states of South Carolina. They don't have. They don't have anything like that.

B

You know you can charge whatever they want to charge. Yeah you're right. We don't have it, we don't have it in these South and I said I mentioned one time. He.

A

Was? Oh no, oh.

B

No don't bring that up. They're, not gonna, do nothing like that. You know so. I brought it up one city council, one time with the under mayor Riley when he was. You know.

A

I see because I.

B

Looked at I said it's the only way we talk about affordable housing, how we can kind of maintain it, because the people, uh because it people are sizing people like mad out here and people can't afford it, and even these people are working and these uh hospitality and and bars and restaurants. They can't afford these houses out here you know even a person, that's working can't afford it anymore, because they're not making that kind of money we don't have. We don't have nothing to uh hold the rents down or nothing like that in this state.

B

But this state is not going to pass it. You know they're not going to pass it so true, it is what it is. I guess, yeah one day, maybe I don't know if I'll be around, but they might might work. I'll leave us be careful and Kevin might do it. When I leave him.

B

You know but but if you don't have anything else to bring before this committee.