In a neighborhood along Asheville’s French Broad River and abutting a residential street that includes young families, Upstream Way stands out. It’s not just because most of the homeowners live out of town but also because, neighbors say, it turns into a fraternity house-like party scene on some weekends.
At least half of the houses are vacation rentals, with four accommodating parties of “16+,” including a “Bachelorette Oasis” and a “Bachelor Sanctuary.”
The homes are part of a booming vacation rental industry in Buncombe County that has more than tripled in the past six years. At the same time, long-term rents in the county have soared 65 percent, and service workers are complaining they’re being priced out of the area.
Industry advocates say large party houses are not the norm, and vacation rentals have significantly supplemented incomes for property owners, supported tourism-related jobs and given visitors diverse options for places to stay.
But many observers believe vacation rentals, which now number more than 5,000 in Buncombe, are causing or at least contributing to the area’s housing shortage and affordability crisis.
Asheville Watchdog interviewed neighbors about the impact on their quality of life and academics and economists about what short-term rentals do to the housing market.
The Buncombe County Tourism Development Authority and advocates of vacation rentals point to a 2021 study commissioned by the local realtors association that found “no correlation between the rise of STRs [short-term rentals] and local housing prices or housing availability in Buncombe County.”
Ken Johnson, associate dean of graduate programs at Florida Atlantic University’s College of Business in Boca Raton, reviewed the study at The Watchdog’s request.
“You’ve had a really big run-up in both home prices and rents in the last two to three years,” he said. “And while short-term rentals are not the singular cause of this, they are definitely a contributing cause, in my opinion.”
Other experts said housing supply and particularly whether a community’s new construction has kept pace with population growth are more of a factor in housing costs and availability.
“Nationally at least, short-term housing rentals are not a leading driver of high housing costs or the undersupply of housing,” said Owen Minott, senior policy analyst at the Bipartisan Policy Center in Washington, DC, a nonprofit that studies solutions to affordable housing shortages. “We can’t lose sight of the source of the problem, which is really that we are just simply not building enough homes and especially affordable homes.”
Vacation rentals ‘exploded’
Western North Carolinians have hosted tourists, including in their homes, since “the discovery of hot springs and the medicinal value of them in the 1800s,” said Steve Frellick, founder of Yonder Luxury Vacation Rentals in Asheville.
Coming Next: Identifying beneficiaries of the vacation rental industry is near impossible; a tax agreement with NC negotiated by Airbnb shrouds owners and complicates local governments’ ability to ensure taxes are paid.
By the 1990s, vacation rentals had become a business, Frellick said. By 2014, Airbnb had begun listing properties for rent in Buncombe, and the industry soon took off.
In January 2017, vacation rentals in Buncombe numbered 1,555, according to AirDNA, a Denver-based company that provides data and analytics on short-term rentals. By May 2023, that number had burgeoned to 5,466.
(The Asheville Citizen Times incorrectly reported 10,187 vacation rentals in Buncombe in two recent stories. The newspaper changed the stories last week to reflect the correct number.)
Buncombe’s short-term rental industry, “for lack of a better way to put it, exploded,” Frellick said. “I’m not going to pretend that doesn’t raise concerns. It does.”
Complaints of day drinking, boisterous parties
Neighbors of Beaver Cabin, a vacation rental in Weaverville marketed as a private mountain getaway accommodating up to 16 people, say their “quiet rural community” has morphed into “a state of noise and disturbance.”
“The echoing sounds of parties, music, people and boisterous activities have disrupted the peace we once enjoyed,” said a statement texted to Asheville Watchdog that the sender said represented the views of six neighbors. The neighbors asked not to be identified out of concern for instigating confrontations with the property owners.
Arcadian Avenue, the company that owns the cabin and markets three other large vacation rentals in the Asheville area, is a “small group of individuals that have great respect for our neighborhood,” said Julia Sawyer, hospitality manager.
She said the company has not received any complaints directly, but a “disturbed neighbor has reported us to the county and to Airbnb — with both, we have confirmed we are following all of the guidelines.” The cabin attracts mostly families and is not a “party house,” and guests must sign an agreement that includes being respectful of neighbors, Sawyer said.
On Upstream Way, in East West Asheville near Carrier Park, cars with out-of-state license plates are a common sight in the driveways of tall, modern homes built in the last seven years by local developer Jay Fiano.
Eight of the 16 houses are listed on vacation rental websites, including four owned by Fiano’s company. His “Upstream Bachelorette Oasis” accommodates 24 guests, and the “Bachelor Sanctuary,” 21 people, and all four of Fiano’s rentals have hot tubs, according to Upstream Way Luxury Vacation Homes. Prices vary by date but ranged from $822 to $1,095 a night, according to a search for a weekend accommodation in August.
A 2022 review on the site, by a guest who said he was among “about 15 guys” attending a bachelor weekend, said, “The outdoor spaces were fun, and it is on a street with other similar homes hosting large parties so no one was bothered by any noises we may have created.”
But residents of Joyner Avenue, whose homes back up to the rentals, say they hear plenty. Three spoke to The Watchdog on condition their names not be used out of concern about relations with the property owners.
“What was a lovely, peaceful place, now there’s a hot tub in my backyard with revolving people like loud men with stinky cigars talking about women’s breasts,” said a neighbor whose house is behind three rentals owned by people living in Florida, Texas, and Georgia. “Projectile vomiting bachelorettes off the back porch, that was another night.”
A homeowner adjacent to Fiano’s rentals described “noisy day-drinking all day long” and a fraternity house atmosphere. “It’s not that I moved into the bar district; the bar district moved into my neighborhood,” the homeowner said.
The city has received five noise complaints about properties on Upstream, including three on Fiano’s properties, city officials said.
Fiano told the Watchdog via text, “All vacation rental owners need to have a close working relationship with the noise ordinance folks at the City. I try very hard.”
He said he’s filling a niche in Asheville’s tourism-driven economy.
“There are some groups, say 12, 14, 16 people are coming here for who knows, a wedding, or it’s a mountain biking club, or what have you,” Fiano said in an interview. “Those folks aren’t looking for eight hotel rooms on the same hallway side by side by side.
“There is a huge category of people that will just go to Nashville if they can’t find an Airbnb here, or they’ll go to Charleston… That hospitality side of our economy, it prospers from having a few houses available for those types of travelers. It would be like if we didn’t have any campgrounds. . . we’re not gonna get very many campers.”
Promoting benefits: ‘It’s been a huge blessing’
Frellick, whose company manages more than 200 vacation rentals and is an owner himself, said many vacation rental owners are local.
“We live here,” he said. “I don’t want to hurt Asheville or Western North Carolina. On the contrary, I want to cultivate the community that we have and be a positive member.”
Frellick acknowledged vacation rentals get a bad rap and said he regularly encounters complaints in meetings with residents and even elected officials: “ ‘Vacation rentals are just party homes, Airbnbs bring riffraff to your neighborhood. . .If you start allowing them all of a sudden, your town has no integrity and it’s just all these tourists running around.’
“None of that is real,” Frellick said.
Vacation rental property managers and the local realtors association last year formed an alliance, the STR Trust, to advocate for owners and project a more positive public image. The group produced videos featuring people who benefit from vacation rentals, including a woman who cleans houses, and property owners Jody Welker and Kevin Morgan.
Welker, a retired Presbyterian minister, told Asheville Watchdog that renting out his 2,400-square-foot home in Black Mountain for more than 20 years helped him and his wife retire and move into the home. The roughly $11,000 to $14,000 the couple netted each year helped pay their mortgage, he said.
“The short-term rental market is a boon to the economy, and I hope people realize that,” Welker said.
Morgan inherited his grandfather’s home just outside the Asheville city limits, renovated the property and began renting it short-term in 2019, two years before he got laid off from his job as a machine shop supervisor, he told Asheville Watchdog.
“The rental property was what I had to fall back on,” Morgan said. “It’s been a huge blessing for us.”
Rentals bring jobs, money for owners
Vacation rentals have become big business in Buncombe, surpassing hotels in growth since the pandemic, according to the TDA.
The 2021 economic study commissioned by the realtor’s association found that vacation rentals in Buncombe supported 7,500 permanent tourism-related jobs and accounted for 20 percent of the total impact of travel to the region.
The windfall to property owners, both local and out-of-state, is significant. Top earners of vacation rentals in the Asheville market over the past year took in $25,000 to over $112,000, depending on the size of the home, according to Evolve, a vacation rental marketing and property management company.
Rents soar. Are STRs to blame?
As vacation rentals have proliferated, Buncombe’s housing costs have increased dramatically. Whether those trends are connected is a hotly contested debate locally. The Watchdog posed the question to national experts.
Rents in Buncombe have increased 50 percent since January 2017, compared to 32 percent nationally, according to Apartment List. Factoring in all types of long-term rentals, including homes, condos, and apartments, Buncombe’s rent increase was even higher – 65 percent, according to the Zillow Observed Rent Index (ZORI).
Other places that also experienced population growth, such as Minneapolis, Portland, Oregon, and White Plains, N.Y., had little to no rent increases, said Alex Horowitz, project director of the Housing Policy Initiative at the Pew Charitable Trusts.
Those cities “made it easier to build housing, especially apartments in commercial areas, downtown areas, walkable areas, and the increase in housing production held down rent growth,” Horowitz said.
“Some places reduced parking requirements, and that made it easier to build apartments. Some places made it easier to build, like two, three and four homes on some lots instead of one,” he said. “All of them primarily added apartments during that time period.”
Research, Horowitz said, “just doesn’t suggest that short-term rentals are a major source of rent spikes. The housing shortage is the primary culprit.”
The impact of vacation rentals is “smaller than many people fear because the short-term rental market generally remains small relative to the rental market,” said Ingrid Gould Ellen, director of the Furman Center for Real Estate and Urban Policy at New York University’s Robert F. Wagner Graduate School of Public Service. “The more fundamental driver of affordability challenges is the shortfall in housing supply.”
Minott of the Bipartisan Policy Center said a housing shortage “is especially a problem in many tourist destinations that haven’t built enough housing to sustain affordability for their workers.”
He said he could not say with certainty that vacation rentals were “not having any impact on housing affordability,” but added, “it’s not the source of the problem, which is the shortage of housing in general, especially long-term.”
Johnson of Florida Atlantic University said vacation rentals can reduce the availability of long-term rentals.
“They subtract away from the number of units that people could live in,” he said. “You can’t be taking units out and going, ‘Oh, it really doesn’t matter.’ It does matter. . . It’s taking out supply so it’s helping to push up the price of housing.”
The population of Buncombe County grew by 15 percent since 2010, an increase of about 35,000 people, while the number of new housing units increased by a little more than 21,000, according to U.S. Census Bureau data.
Residential building permits in the county decreased by 25 percent compared to the previous decade, despite similar growth, according to the study commissioned by the realtors. “This underbuilding of housing has contributed to significant property and rent appreciation over the past 10 years,” the study said.
Buncombe is projected to grow even faster in the coming decades, adding 54,961 to 83,435 residents by 2045, estimates show.
“Like so many metros in the Sunbelt states where people are moving in rapid numbers, they can’t build fast enough,” Johnson said. “You’re going to have a period of pretty significant unaffordable housing, and it’s not going to go away overnight.”
Eventually, Johnson said, prices will level off if new construction catches up with the demand. Or, he said, if an economic downturn decreases travel, more vacation homes will be converted to rentals or sold.
“I still believe we’re going to go into a pretty significant recession,” Johnson said. “When the economy hits the slide, you’re going to get just a shock of supply rather quickly and that will help either flatten or even maybe bring prices down a little bit.”
‘Soft’ market could be turning point
Indications are Buncombe’s supply of vacation rentals may already be at saturation point.
Revenue from vacation rentals was down 13 percent in April over the same month last year, and down 11 percent in March, according to the TDA.
“I have heard from multiple [vacation rental owners] that ‘I’m not getting as many stays or having to reduce what I charge,’ ” said Matt Allen, director of professional development and government affairs at Land of the Sky Association of Realtors.
Chip Craig, owner of GreyBeard Realty based in Black Mountain, said the short-term rental market is “really soft just because of the increase of supply.
“We’re seeing people getting out of short-term rentals and moving into long terms just because the occupancy has been so low.”
Buncombe’s era of explosive growth in vacation rentals may be coming to an end.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Sally Kestin is a Pulitzer Prize-winning investigative reporter. Email skestin@avlwatchdog.org.
The neighbors of these short term rentals say they’re loud and disruptive. The owners of them say they’re a boon to Asheville and not bothering anyone. Who are you going to believe? They are a total detriment to our neighborhood in North Asheville which is full of whole house (illegal) short term rentals. A neighborhood is changed when it’s overflowing with out of state cars lining the street, strangers wandering around and drunken parties day and night. Don’t bother calling the city to complain. They do nothing. And don’t bother calling the police about the noise. They’re too short staffed to address noise complaints. Welcome to Asheville where everything comes before the residents that actually pay for city services. Something has to give.
True – we get stuck with higher property taxes while the TDA does no infrastructure repair and out of state owners do not get charged higher taxes for houses used as short term rentals.
I totally agree MJ! At least an owner should have to live in the the same neighborhood as the their rental. Out of state owners should not be allowed. These STR’s are definitely a detriment to “community” in my experience of having one in ours.
something has to give, yet city voters continue to elect manheimer for some reason.
Great reporting, as usual.
I do think you left out a significant detail: the data and your article do not delineate between *home stays* and whole house STRs. Many people incorrectly lump
the two together b/c they are both “AirBnBs”. But home stays (vacation rentals attached to an owner-occupied home, which is the requirement within Avl city limits) are a separate issue and should be named as such. Home stays generally are not contributing to the frat house neighborhood take-overs you reference; they are owned by locals; they are monitored by the on-site resident; and many are not suitable for long-term rental due to the City of Asheville’s former rule that they could not have kitchens (lifted in 2021). On behalf of the permitted home stay resident owners, I would request that this subset be noted and separated from the whole house STR discussion.
Thanks for your comment. The AirDNA data does not break out home stays. They may be included in the “entire place” category, which as of May 2023 totaled 5,031. The other categories in the data are private rooms, which as of May were 427, and shared rooms, which were 8.
I own a vacation rental in a WNC neighborhood where they’ve been specifically allowed since at least the 70s. It was never a part of housing supply, and won’t be until we retire.
It’s worth pointing out that AirDNA inflates our revenue numbers by 3x. At least in our case, it’s extremely inaccurate. We do about ~50k/year but AirDNA has us listed as doing $150k+ in rev.
As if 50k is inconsequential! That home could have been providing housing for members of the community instead of just lining your pockets. I remember when helping communities mattered to people. Is profit your sole consideration? How very sad.
A good deal of the.housing supply challenge could be alleviated by transitioning housing units from short term rental to long term rental. The challenges STR owners, many of them out of towners or recent arrivals, as they are not willing to give up a higher profit. My wife and I own rental home, and we have made a conscious effort to continue it as a long-term rental. Because we care about our community (I have been in WMC for 40 years), we rent it at below the market rate. I don’t expect others to follow this model other than to make their units available for long-term rental. It just seems too many people are coming to Buncombe County because they see the opportunity to make a profit rather than to build community.
Your choice is appreciated by locals looking for affordable housing, please know that 🙂
You’re absolutely right, Gerald. We need more rental housing. And in financial planning, if the only way someone can afford to buy a house as their primary residence is by also renting out a section of it as a STR, but not as a long term rental (which I’ve heard many times in city council meetings focusing on STRS) that’s not a very sound financial plan. Those STR renters won’t be around forever.
I think the platforms that collect such high fees from the STR renters need to pay up. Those fees can run from 1/3 to 1/2 of the daily rental price added onto a renters bill over and above the owners’ posted daily cost. Platforms like VRBO, AirB&B, Evolve and others are all making record profits these days and little if any of those added fees go to the property owner. These fees mostly go to the platforms advertising the rentals. And they pay nothing to the communities they’re invading—uh, I mean, “housing vacationers in.”
Many recent reports in the media point out that these platforms have wreaked havoc on cities such as Amsterdam, Paris, Venice, Madrid, as well as smaller cities like Asheville. If they want to make the big bucks in these places, they need to financially contribute to the upkeep (city services like police, fire dept, garbage collection, as well as hospitals, libraries, symphony and art museum like Nancy Sultan pointed out in her comment) of local long time community institutions that do not get TDA money.
Maybe the higher fees the platforms had to pay would just get passed on to STR renters anyway but maybe that would get those vacationers to book directly with owners, which is what used to happen before Expedia bought VRBO and started this whole STR craze. Or maybe higher fees will get visitors to book through local booking companies or will discourage some of the renters altogether.
When the number of vacationers disrupts communities while vastly enriching the “big box” rental platforms, it’s time cities started demanding some (literal) payback from these platforms.
Yes, and it’s incredibly irresponsible for the TDA (Tone Deaf Assholes) not to at least acknowledge that their sole goal is to rake in as much cash as possible from overnight stays–dollars which are then squandered on excessive advertising and not reinvested in the community (even if mandated by the NC legislature). That’s why TDA members use terms like ‘another 200 rooms coming online’ this year, etc. as if overseeing hens laying eggs. Every person with an IQ over 40 knows that tourism does not pay a fraction of what it should invest into infrastructure or quality of life of essential citizens who aren’t slinging overpriced beer in plastic cups and then asking for handouts for affordable housing because their crappy jobs don’t pay them enough to live here.
Thank you for being generous members of your community! You set a wonderful example.
If these Upstream properties are within city limits, how do they get around the STR ban?
They were approved before the 2018 ordinance on STRs.
It really isn’t that complicated. If I own a cabin that I could rent out long-term to a fellow citizen but instead choose to use my cabin as a vacation rental, I am contributing to area housing woes. It should be my right to do this, but refusing to admit the truth isn’t much different than all the other denying going on in our country.
I live in an old established neighborhood in Arden, which was, and still is, a popular area for vacation homes. Families(mostly Floridians) come for a few months every year, and neighbors get to know them. Some of these folks moved permanently into to their homes. Unfortunately, developers now are buying every house for sale with cash and turning them into STRs. The owner of the AirBnB across the street from us took off the the mailbox. Many folks who live permanently in our neighborhood are very concerned. Short term renters do not contribute to the community. They don’t know the neighbors and we don’t know them. These renters don’t become members of the neighborhood association, or the Arboretum, or the Asheville Symphony, Art museum, etc. They don’t pay Buncombe County taxes. The rentals bring noise and increase traffic on our narrow roads. We don’t like having rotating groups of tourists wandering the neighborhood, allowing their dogs to bark while they go out and to poop on our property. We are not alone in our belief that Buncombe County needs to regulate these STRs. The owner should live in the house and belong to the neighborhood. Neighbors help each other. Kids grow up together. This community bonding doesn’t happen with a neighborhood full of weekend renters. People who live here don’t want to be surrounded by “hotels.” Furthermore, these developers and real estate agents who don’t live here are driving up the prices so that young people can’t afford to buy homes. The Commission must take some action to save neighborhoods like mine and help bring new families into older neighborhoods.
I agree 100%.
I agree wholeheartedly!
It’s hysterical to ask the tourism department and the board of realtors if the short term rental market has any effect on the lack of availability of long term housing for actual residents. Seems like a classic case of research done by a very very interested party. You’re going to come up with the result that you want but the numbers don’t lie when you have a 4000 unit increase between 2017 and 2023, five years… meaning that 4000 units that could have been for housing have instead been purchased for Airbnb purposes… common sense and logic indicate that most definitely this would have an impact.
I am in the industry, and I literally shake my head when people call me nearly on the daily saying that they want to look into buying a property here to use for an Airbnb because they believe they are so lucrative, and they want to start building their rental portfolio. This is all at the expense, in my opinion, of people who want to put a roof over their heads in our town.
And how many of them are obtaining loans under false pretenses? We only need to look to the infamous Shawn Johnson to realize that many people are obtaining loans claiming that they will be their primary residence when in fact, it’s going to be turned into a rental in short order.
I believe the solution lies in taxing anything that is not a primary residence at four times the primary residence rate and making these rental units not so attractive. South Carolina does something along these lines, and they do not have the problem we have.
You have to literally take evidence that you are living in a property on a yearly basis, in order to get the discount to have normal taxes. We need to step up and return our housing to our residents.
another excellent article from asheville watchdog.
I am curious why you did not include motel/hotel. In the 23 years we have lived in Asheville over 15 multi-story motel/hotels have been built in Asheville (not including airport area). If those had been apartments there would not be such a big problem.
Thanks for reading it and posting your comment. You’re correct that there has been a huge growth of hotels in the area, but our intention was to keep the story tightly focused on the short-term rental market.
This is basic economics and common sense. STRs are causing huge problems in our city. Citing studies done by entities who have a vested interest in keeping STRs is not good information.
Why don’t we copy South Carolina and increase the tax burden for anyone who is an owner but does not live here permanently to 3 times the property tax of permanent owners. That would be a good start.
Will there ever be a story about the massive carbon footprint of tourism?
That is, how many miles flown and driven and the cumulative impact on our natural world…
I second kw’s suggestion.
Please include the carbon footprint of building housing here for people who already have homes elsewhere.
Asheville’s travel/dining/entertainment economy is hugely dependent on the burning of fossil fuels. It seems like simply green washing for city council to obsess about composting and greener city vehicles.
Amen to MJ’s comment. I honestly think of moving sometimes. I am a native North Carolinian and 25 year Asheville resident. Our city government seems to be profit driven, not representatives of the people who live and work here.
I’ll offer another perspective here as a STR owner in N Asheville.
We live in Florida but we come up to the home at least 4+ times per year with family and friends, often for weeks at a time. When we are in town, we spend a majority of our time at the shops, breweries, restaurants, and galleries. We know all of our neighbors, they can call/text us anytime if there is a problem and we socialize with them when we are around.
We follow all the rules and regulations required to run a safe and fun STR property. I would say 90% of our renters are families and groups of old friends getting together for special occasions. These people are respectful of the home and the neighborhood. Zero complaints from those around us, and I personally ask them this every time I see them because we genuinely do care.
We have invested a significant amount of money to improve the home, hiring local roofers, contractors, plumbers, and electricians in the process. We have spent a great sum supporting local furniture and antique stores, as well as Asheville’s artisans to furnish and make the house beautiful. We pay local taxes with every booking.
Our guest book contains pages and pages of messages from people who have written about their time exploring Asheville from our home, and making memories as well. We have had proposals, family reunions, birthday celebrations, and more. This would not really be possible at a hotel.
The Upstream homes mentioned in this article clearly seem to be marketed as giant party houses. I understand the concerns of the neighbors who live near them. However, not ALL of us are bad operators. Happy to answer any questions as best I can.
You’re still taking up two homes for one family, one of which is largely rented to transients who have no stake in the community. You can whitewash that all you want, but you are part of the problem. I hope you choose to rent the house long term to deserving people who do want to be part of the Asheville community.
I will absolutely not consider that and as far as I am concerned, my family is very much apart of the Asheville community, just not to a degree you see fit. Nobody “deserves” to live anywhere. They have to earn it, at least for now. I am sorry you feel that “transients” have no stake in the community. I think this is an overly broad generalization with no basis and the people who come here to visit have every much a right to be here as you do. Let me ask, how do you feel about immigrants who come to the US buying up housing, taking jobs, and driving home prices out of reach from hard working American citizens who just want a place to live?
Neighborhood residents need to band together where there are troublesome STR and make it as inhospitable as they can (without breaking the law). Where there is a will there is a way.
Yep. I’m in Buncombe County. The moment my neighbor resumes renting his place to big groups of noisemakers as he’s done in the past, I plan to do some legal target shooting within hearing distance of the hot tub he’s installed facing what was once a serene forest between us.
I’m not familiar with White Plains but I don’t find it surprising at all that there is not enough demand for rental housing in Portland and Minneapolis to drive up rents in the last few years.. There has been incredible violence on the streets of both in the last 3 years and Portland’s population increase has been largely driven by indigent homeless and led to creation of major tent cities. It was a wonderful city 10 years ago but no way would I set foot in it now.
That’s why crime here and Asheville’s diminished reputation might actually be a good thing, keep some tourists away and help straighten out the market a bit.