FOLLY BEACH — City leaders selected a Texas-based consulting policy group to take the lead on a long-awaited and much debated short-term rental study.

Folly Beach City Council unanimously voted on Oct. 13 to award the contract to Smart City Policy Group. Headquartered in Austin, Texas, the firm specializes in policy areas such as workforce development, community and economic impact studies, and local regulations, according to Smart City Policy Group’s website.

The winning firm is tasked with conducting a comprehensive review of the short-term rental limits enacted through a citizen’s referendum in 2023. Folly Beach capped the number of permitted investment short-term rentals, properties where the owner does not live on-site, to 800.

The scope of the study laid out in the city’s request for proposals include evaluating a series of possible amendments to the ordinance, including expanding inheritance rules, allowing license transfers and adjusting the number of available permits. Each possible amendment will be studied for its potential impact on the island’s housing market and property values, among other areas.

Councilwoman Katherine Houghton cast her vote in favor of Smart City Policy Group but asked that the city thoroughly vet the firm’s references before executing a final contract. Councilman Blair Holladay said the firm should consider a full range of possible adjustments to the cap.

“Whether it’s eliminated or adjusted to zero … no STRs is the other end of the spectrum, and I think a nonbiased study would include both,” Holladay said.

The first phase of the study will involve a pre-study work session with city council “to reach a common understanding” of what the review will entail, according to the RFP.

“During that pre-work session we’re going to have with them and the one-on-one with council members, I think we’ll get a more defined scope and really just get it nailed in with them,” Councilman D.J. Rich said during a work session ahead of the evening’s council meeting.

Smart City was one of four groups to bid on the city’s study. The other respondents included Colorado-based RRC Associates, BAE Urban Economics of California and a joint proposal from the University of South Carolina and The Citadel.

The study is poised to wrap up by February 2027, ahead of the next business license renewal period. The city enacted a moratorium on issuing new STR permits until the study is complete.