Housing Affordability and Short-Term Rental Regulations in Hilton Head: Balancing Tourism and Resident Needs

As the Chief Marketing Officer for a major Digital Marketing Company in South Carolina, we work with developers and Real Estate Agencies all the time. So, we are sensitive to the incredible interest that the housing affordability issue creates in the communities we serve. In Hilton Head, a proposed ordinance debated in June 2025 to cap short-term rentals (STRs) like Airbnb and strengthen enforcement aims to address a housing crisis, with median home prices at $600,000 and rents consuming 45% of income for many residents. Sparked by incidents like the 2022 Chimney Cove evictions, the debate pits tourism revenue against workforce housing needs. Our marketing expertise underscores the need for clear, inclusive communication to unite stakeholders and ensure Hilton Head remains affordable and vibrant.

[](https://www.postandcourier.com/beaufort-county/news/hilton-head-workforce-housing-plan/article_4c4471e2-5b62-4977-a439-87d43da9ddba.html)[](https://www.postandcourier.com/beaufort-county/news/hilton-head-affordable-housing-shortage-action-resign/article_fd4f2e4c-7ad2-4820-83bd-aa58a3bc69a1.html)[](https://www.islandpacket.com/news/local/article306905646.html)

The Housing Crisis and STR Regulations in Hilton Head

Hilton Head’s housing market is among South Carolina’s priciest, with median home prices at $600,000 and only 25 affordable units per 100 low-income households. The island’s 6,600 active STRs, comprising 30% of housing stock, reduce long-term rentals, exacerbating affordability issues for service workers. A June 2025 ordinance, building on 2023 licensing rules, proposes capping STRs at 5% of residential properties and empowering the Community Code Enforcement division to issue fines for violations like noise and parking. The proposal, spurred by 128 noise and 100 parking complaints in 2024, aims to free up housing but risks tourism revenue, which generates $2 billion annually.

[](https://islandpacket.com/news/politics-government/article308427720.html)[](https://www.postandcourier.com/beaufort-county/news/hilton-head-workforce-housing-plan/article_4c4471e2-5b62-4977-a439-87d43da9ddba.html)[](https://www.islandpacket.com/news/local/community/beaufort-news/article306348926.html)

Perspectives of Interested Parties

Real Estate Agents

Real estate agents see STRs as a lucrative niche, with rentals yielding 20% higher returns than long-term leases, but recognize their impact on housing shortages. With home sales flat at 1,200 in Q1 2025, agents advocate for balanced STR caps to preserve inventory for buyers, particularly workforce families. They emphasize transparent marketing to highlight affordable options, like the Northpoint project’s 157 units, but face client pushback over rising costs near STR-heavy areas like Sea Pines. Agents urge collaboration with developers to integrate affordable housing into tourism-driven markets.

[](https://islandpacket.com/news/politics-government/article308427720.html)[](https://herehiltonhead.com/south-carolina-housing-market-price-reductions)[](https://www.islandpacket.com/news/local/article306905646.html)

Developers

Developers, like OneStreet Residential behind Northpoint, support limited STR regulations to free up land for projects like their 157-unit affordable complex with amenities. High construction costs—$220,000 per affordable unit—limit scalability without subsidies, like the $5 million from the Greenville Housing Fund. They argue tourism revenue from STRs funds development, but strict caps could deter investors. Developers back zoning reforms to allow multi-family housing but face resistance over traffic and aesthetics, urging public-private partnerships to balance affordability and growth.

[](https://www.postandcourier.com/beaufort-county/news/hilton-head-workforce-housing-plan/article_4c4471e2-5b62-4977-a439-87d43da9ddba.html)[](https://www.postandcourier.com/beaufort-county/news/hilton-head-affordable-housing-shortage-action-resign/article_fd4f2e4c-7ad2-4820-83bd-aa58a3bc69a1.html)[](https://www.islandpacket.com/news/local/article306905646.html)

Government and Regulatory Bodies

The Town of Hilton Head, led by Councilman Steve Alfred, estimates a need for 200 new housing units annually for a decade to address workforce shortages, as highlighted by the 2022 Chimney Cove evictions. The June 2025 STR ordinance, debated after a February council push, strengthens enforcement with fines but faces legal challenges from property owners citing state preemption. The South Carolina Department of Commerce offers tax credits, but limited funding—$10 million statewide in 2024—hampers progress. Regulatory bodies like the Lowcountry Council of Governments push for infrastructure upgrades to support growth.

[](https://islandpacket.com/news/politics-government/article308427720.html)[](https://www.postandcourier.com/beaufort-county/news/hilton-head-workforce-housing-plan/article_4c4471e2-5b62-4977-a439-87d43da9ddba.html)[](https://www.postandcourier.com/beaufort-county/news/hilton-head-affordable-housing-shortage-action-resign/article_fd4f2e4c-7ad2-4820-83bd-aa58a3bc69a1.html)

Greater Hilton Head Community

Hilton Head’s community is divided. Service workers and renters, facing rents at 45% of income, support STR caps to increase long-term rentals, citing nearby Beaufort’s 6% cap success. Residents in Sea Pines and Forest Beach, however, oppose restrictions, valuing STR income and tourism’s $2 billion economic boost. Groups like the Hilton Head Housing Action Committee, hit by resignations in May 2025, demand 20% affordable units in new projects. Community forums call for transparency to prevent displacement, as seen in Chimney Cove’s $800-to-$1,500 rent spike from 2019 to 2022.

[](https://islandpacket.com/news/politics-government/article308427720.html)[](https://www.postandcourier.com/beaufort-county/news/hilton-head-workforce-housing-plan/article_4c4471e2-5b62-4977-a439-87d43da9ddba.html)[](https://www.postandcourier.com/beaufort-county/news/hilton-head-affordable-housing-shortage-action-resign/article_fd4f2e4c-7ad2-4820-83bd-aa58a3bc69a1.html)

Social Media Buzz

X posts reflect the polarized debate over STR regulations. On June 24, 2025, a local advocate posted about the proposed STR cap, praising its potential to free up rentals but drawing replies about tourism losses, with one user noting a 5% STR drop since 2023. Another post criticized the town council’s slow progress, sparking comments about gentrification risks. Hashtags like #HiltonHeadHousing and #STRban trend, highlighting a community wrestling with affordability and economic priorities.

The Path Forward

Hilton Head’s housing crisis demands collaboration, a principle we champion in our digital marketing work. Real estate agents, developers, town officials, and residents must align to balance tourism with affordability. STR caps, paired with subsidies like the Housing Trust Fund and infrastructure investments, can increase rental stock. Transparent communication, rooted in our expertise, is key to building trust and fostering inclusive growth, ensuring Hilton Head remains a home for its workforce and a destination for visitors.

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