This Small Island Community in Georgia Is Fighting the Nantucket Fight

It’s a familiar battle unfolding in vacation towns across the country: To combat rising home prices and preserve housing for locals, cities are tightening regulations on short-term rentals. In response, property owners push back, arguing such measures infringe on their rights and threaten tourism-driven economies.

New York City and Nantucket, MA, helped write the playbook for these fights. Now, Tybee Island, a small coastal community off the coast of Georgia, is taking its turn in the ring.

Just weeks before the spring break and summer rush, the city is waiting to hear a court ruling that could shape the future of short-term rentals there.

Tybee Island enters the national STR battlefield

In Nantucket, the short-term rental (STR) battle centered on whether zoning laws barred homeowners from renting out their primary residences. In Arizona, cities clashed with state lawmakers over a blanket ban on local STR regulation. On Georgia’s Tybee Island, the stakes may be even higher because tourism, the local economy, and short-term rentals are inextricably linked.

The 2.7-square-mile island sits at the mouth of the Savannah, where the river meets the Atlantic Ocean. It boasts ideal weather and coastal views—exactly the kind of place you go to get away from the hustle and bustle of life.

Tybee has a year-round population of just 3,400 residents, but it hosts almost 2 million annual visitors, according to a 2023 study on the economic impact of tourism on the island.

More than half of those visitors (51%) stay in short-term vacation rentals, far outpacing the 33% who choose hotels or resorts. That makes STRs not just a housing issue, but also a cornerstone of Tybee’s local economy.

The city began regulating STRs in 2016, when the City Council passed an ordinance requiring STR registration and a $25 annual fee. That fee quadrupled the following year, and from there, the tensions escalated. In 2021, the city imposed a temporary moratorium on new STR permits. Then, in October 2022, it passed a sweeping new ordinance banning new permits in residential zones.

That move prompted swift legal action. The Tybee Alliance, a group of local STR owners, property managers, and business owners, filed two lawsuits challenging both the city’s permit restrictions and its registration requirements.

The pushback: Homeowners and the Tybee Alliance

Tybee Island may be small, but its real estate market is even smaller. As of early 2026, there were only eight active rental listings and 133 homes for sale, according to data from Realtor.com®. While demand has cooled slightly from recent highs, the limited inventory underscores the island’s ongoing housing pressure.

That scarcity has fueled criticism of STRS, which some locals argue are displacing long-term housing and driving up prices. It was this tension that led the City Council to act to regulate the rentals as far back as 2016.

But not everyone agreed with the crackdown. In 2024, roughly 20 homeowners appeared before the City Council to voice concerns that limiting STRs could damage the island’s fragile, tourism-dependent economy. Their message was clear: Fewer rentals means fewer visitors and fewer dollars spent at local businesses.

"During the offseason, our businesses experience a 70% drop in income,” Jenny Rutherford, a local real estate agent, told WJCL News in 2024. “So, if it were offseason all year long, then these businesses could expect to have up to 70% reduction in their income." 

In addition to zoning restrictions, rental owners have also been paying hundreds of dollars annually for business licenses—fees that, it turns out, may not be legal under Georgia law.

The state restricts how municipalities can regulate and tax residential rental properties. While city officials have since acknowledged that some fees may need to be refunded, the legal fight continues.

A judge is expected to rule on the case imminently, a decision that could carry major implications for both Tybee’s housing policy and its economic future.

A ruling and peak season on the horizon

The stakes of the lawsuit are rising alongside the island’s tourism calendar. A judge’s decision could land just months before Tybee enters its busiest season.

According to data from AirDNA, a provider of short-term rental data analytics, the week of June 16 marked the highest demand, occupancy, and nightly rates for Tybee Island in 2025.

“Rates were more than 25% higher than the annual average at $500.70 compared to $391.40. Occupancy during this week was 84.2%, considerably higher than the average of 56.1%,” explains Bram Gallagher, director of economics at AirDNA.

And peak season is beginning to stretch. Gallagher notes that spring break is gaining traction, with March weekends showing 25% to 30% increases in demand. But the most dramatic spike comes from a local tradition.

“The real star here, however, is significantly higher bookings for Orange Crush in April, an annual festival held every year in April, going on some decades now by some accounts. A few days of this event have higher rates than the weekly average high in 2025.”

The timing of the ruling could shape how many rentals are available for these critical tourism events, and how much local businesses stand to gain or lose as the island prepares for another busy year.

More than a local dispute

What’s unfolding on Tybee Island is a microcosm of a broader national clash over how vacation towns balance housing affordability, tourism, and property rights. As communities grapple with the ripple effects of STRs, many are watching closely to see where courts draw the line between local control and state protections.

In Georgia, the Tybee Alliance lawsuit could set a legal precedent for other state hot spots. A ruling in favor of the homeowners might force other cities across the state to roll back or revise their own STR regulations. A ruling in favor of the city could affirm broader local authority to limit STR growth in the name of housing stability.

And with peak season just around the corner, the outcome of this case could directly shape who gets to participate in and profit from Tybee’s tourism economy.