Short-Term Rentals in Macon County, NC: Franklin vs. Highlands

Franklin and Highlands sit in the same county, thirty minutes apart, and treat short-term rentals almost as opposites. Franklin requires nothing beyond an occupancy tax filing. Highlands has grandfathered pre-2022 rentals in its residential districts but is moving to terminate all of them by September 15, 2027 -- a policy a property-owner group is actively suing to stop.

This page covers what's specific to Macon County. For the general explanation, see the national guide.

Franklin: short-term rentals are an ordinary permitted use

In Franklin and the surrounding unincorporated parts of Macon County, renting a home short-term is treated as an ordinary residential use rather than a specially licensed activity. Franklin charges a 3% occupancy tax on accommodations rented for fewer than 90 consecutive days (with standard exemptions for qualifying nonprofit organizations), but neither the town nor unincorporated Macon County requires a separate short-term-rental permit or registration on top of that tax. For a buyer evaluating a Franklin-area property specifically for rental income, that means the town-level regulatory bar is low -- your real due-diligence items are the occupancy-tax registration itself and any HOA or subdivision covenant that might independently restrict rentals, not a municipal permitting gauntlet.

That permissiveness is exactly what makes the contrast with Highlands, less than thirty minutes away in the same county, so stark -- and exactly why a buyer shouldn't assume Macon County has one uniform short-term rental climate just because it's one county.

Highlands: grandfathered rentals, and a countdown to September 2027

The Town of Highlands took a fundamentally different regulatory path. Its Unified Development Ordinance (UDO), adopted in September 2022, redefined short-term rentals as a commercial use and prohibited them in the town's R-1 and R-2 residential zoning districts going forward. Rather than immediately shutting down existing rentals, the ordinance grandfathered any short-term rental already operating in those districts as of September 15, 2022, allowing it to continue as a legal nonconforming use -- a standard zoning-law mechanism for protecting existing uses from a new prohibition, but one that only delays rather than permanently resolves the underlying restriction.

That delay has a specific, dated endpoint under a proposed amendment that has been under active town consideration: as of this pass, the proposal would terminate the grandfathered status of every remaining R-1/R-2 short-term rental by September 15, 2027 -- five years to the day after the original cutoff -- after which none would be permitted to continue operating in those residential districts at all. A property currently protected by grandfathering is not protected indefinitely; a buyer relying on an existing Highlands rental's grandfathered status should treat 2027 as a real, specific, town-adopted target date for that protection to end, not a hypothetical worst case.

An active lawsuit -- the outcome is not yet settled

The proposed 2027 termination has triggered genuine, organized pushback. A property-owner group calling itself Save Highlands retained the Asheville-based law firm Allen Stahl + Kilbourne, with attorney Derek Allen as lead counsel, and filed litigation against the Town of Highlands over the ordinance. Separately, the Institute for Justice -- a national public-interest law firm with no direct financial stake in Highlands rental properties -- issued its own public call for the town to abandon the crackdown, framing it as a property-rights concern rather than simply a local zoning dispute.

None of this means the 2027 termination date is guaranteed to happen, or guaranteed to be blocked -- it means the policy is genuinely contested and unresolved as of this research pass. A buyer considering a Highlands property specifically for its existing short-term-rental status should get the current, live status of both the ordinance amendment and the litigation directly from the Town of Highlands and, ideally, independent legal counsel, rather than relying on any snapshot -- including this one -- of where the fight currently stands.

Short-Term Rentals in Macon County, North Carolina

Franklin: short-term rentals are an ordinary permitted use

Highlands: grandfathered rentals, and a countdown to September 2027

An active lawsuit -- the outcome is not yet settled

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