David and Peg Schroeder are lifelong residents of Wilmington, North Carolina

Property owners David and Peg Schroeder sued the city of Wilmington, N.C., over a short-term rental cap policy.

(The Center Square) – Wilmington city officials have kept a short-term rental ordinance intact despite it being ruled illegal by a North Carolina superior court judge.

The city's zoning ordinance places a 2% cap on how many properties can operate as rental homes in the same area. A New Hanover County Superior Court judge declared the ordinance "void and unenforceable." During a Jan. 6 meeting, however, city planning commission officials decided to delay revisions to the policy by at least three months.

The city attorney's office said the ordinance legally could remain in place and be enforced until the city's appeal is resolved in court.

"I've stayed everything in relation to [the ordinance] until the appellate process is complete," Assistant City Attorney Shawn Evans said. "So, it's not been court ordered that it can be changed at this time."

Members of the planning commission voted to 6-1 to remove scheduled changes to the ordinance from the agenda.

Wilmington residents David and Peg Schroeder sued the city over the ordinance, which blocked them from renting out their summer townhome. After about $75,000 in renovations, the Schroeders were ready to put the property up for rent. The city then passed the ordinance blocking a vacation rental from being within 400 feet of another vacation rental. The property owners had to seek approval through a lottery process, and the Schroeders' neighbor drew a winning ticket, their attorneys said.

Wilmington gave property owners who did not win the lottery one year to continue operating and recover their losses. The couple sought legal help from the Institute for Justice, a libertarian nonprofit law firm.

"What Wilmington cannot do is turn peoples' property rights into lottery tickets and raffle them off," Institute for Justice attorneys said. "Nor can it create a small group of people allowed to exercise rental rights at the expense of everyone else. The North Carolina Constitution protects the Schroeders' right to rent, and it prohibits the city from granting exclusive privileges and creating rental monopolies that prohibit everyone else from renting."

The court ruled in favor of the Schroeders in October. The city attorney said last week the city's appeal timeline was unknown, but officials said the ordinance might be reviewed again during a land development code rewrite scheduled for the end of March.

Staff Reporter

Nyamekye Daniel has been a journalist for four years. She was the managing editor for the South Florida Media Network and a staff writer for The Miami Times. Daniel's work has also appeared in the Sun-Sentinel, Miami Herald and The New York Times.