Folly Beach Hires Firm to Rewrite STR Rules as Court-Voided Cap Hangs in Limbo

Folly Beach hosts are operating in a genuine regulatory vacuum right now. A judge invalidated the city's 800-license cap on short-term rentals in August, and on October 13, 2026, the city awarded a $50,000 study contract to figure out what comes next. The results are expected by the end of the year, and city leaders want a revised ordinance in place before the 2027 rental season. If you hold a Folly Beach STR license, or want one, the next few months will determine what the rules look like going forward.

What the City Just Set in Motion

Folly Beach City Council selected a firm from four competing proposals to conduct the study. The contract was already budgeted for 2027, but the August court ruling that invalidated the current cap accelerated the timeline. Mayor Chris Bizzell was direct about the purpose: "The job of the study is basically to give us the data. The job of the mayor and the council is to take that data and make the best policy decisions."

The city has also placed a six-month moratorium on new short-term rental licenses while the study runs. That moratorium is set to run through February, meaning no new licenses are being issued in the interim. If you were planning to add a property to your portfolio, that clock is ticking.

Six Scenarios on the Table

The study will evaluate six specific policy options. Each one could reshape the market in a different way:

• Leaving the cap at 800 licenses as the baseline
• Allowing all properties to rent for up to 72 days per year
• Exempting multifamily properties and properties in commercial districts from the cap
• Expanding medical hardship exemptions
• Allowing STR licenses to transfer between family members
• Allowing licenses to transfer when a property is sold

Notably absent from that list: eliminating the cap entirely. That omission has already drawn criticism from residents who say the study should examine every option raised during years of public comment. Resident and realtor Vince Perna put it plainly: "They started this process by soliciting feedback from the community. So, I think it's really important that they recognize what the community said and study all of the things that were brought up, as opposed to selecting what they study and what they don't study."

What the Study Will Actually Measure

The study will evaluate how each scenario affects housing market prices, property values, neighborhood livability, tourism revenue, and current STR operators. Mayor Bizzell said the 800-license figure will serve as the baseline but is not a predetermined outcome. "The 800 is our reality right now. So that is our baseline. We will look at higher or lower, but we have to wait to get the data. I really don't want to sit here and predetermine outcomes. We want this to be as objective as possible," he said.

The original cap was approved by voters in 2023, but it has been contested ever since. Bizzell framed the city's goal as restoring a balance that started slipping around 2022: "My whole thing's been about balancing investment versus the resident community. Folly's always had that balance. It was just that when we were in 2022, we were starting to lose that resident community a little bit. So, the cap was put in place."

What Hosts Should Do Right Now

The moratorium means no new licenses until at least February. If you already hold a license, it remains valid under the current baseline, but the ordinance itself is under active review. The study results are expected before the end of 2026, and council will use that data to shape a revised ordinance ahead of the 2027 season.

On the tax side, hosts should know that the combined tax rate on short-term rental revenue runs 10 percent total, split between a 4 percent state rate and a 5 percent local rate, with an additional 4 percent accommodation tax. Manual tax submission is required. A standard license carries a fee of $245. Those figures are unchanged by the current study, but the license availability picture could look very different by spring.

Local store manager and resident Kat Anson Oja captured the mood on the island: "I'm glad that there's a study looking at the current cap. That's obviously helpful because we have no information about the impacts. So, it's better than nothing, but it's tough to navigate."

Watch for the study results before year-end and a council vote on a revised ordinance in early 2027. That is your real deadline.

For the complete Folly Beach compliance guide including tax calculator, checklist, and daily monitoring, see Folly Beach, SC STR Regulations.