MYRTLE BEACH, S.C. (WBTW) — Less than two month s after Myrtle Beach leaders barred short-term rental conversions along 114 city blocks, a property management firm is suing — saying the move violates federal fair housing laws.

In addition to cutting off millions in potential revenue to MBSC Property South, the firm says Myrtle Beach’s controversial rule “furthers the city’s longstanding pattern and practice of driving out affordable and workforce housing from its oceanfront.”

The city council in December approved an ordinance barring properties from being rented for more than 90 days at a time from Kings Highway to the ocean — ending months of discussion on the issue.

A city-sanctioned analysis found that for every 1,000 homes converted, $7.61 million in overall local, county and state revenues are lost — including $2.48 million in direct impact to the city from licensing fees and taxes.

The decision didn’t set well with several property owners who in early December expressed their opposition at a council meeting.

“The excessive nature of this, this is unprecedented in the history of Myrtle Beach,” said Randy Oparowski, who runs a Grand Strand property management company.

Resident Nora Hutchison lives in Ocean View Towers and has a business license for short-term rentals. She worries about marketing her unit to snow birds who might want to stay in the city for several months at a time.

“You’re telling them, ‘we don’t want your business here,’” she told the council.

The 23-page complaint filed Wednesday in Horry County Common Pleas Court makes the same argument.

MBSC owns 169 condominium units in the Sandcastle Oceanfront Resort at 2207 S. Ocean Blvd., while managing 71 others for third-party owners after purchasing the property for $16.9 million in September 2022.

Since the acquisition, the Sandcastle Resort has been zoned in the city’s “mixed high use” density, or MU-H — a designation that’s never contained special regulations regarding long-term rentals.

In February 2024, MBSC submitted a business license application to the city establishing long-term rentals at its resort — a document that city leaders rejected on March 12.

Then on April 2, MBSC filed a separate application for a “project-based housing choice voucher program” in connection with the Sandcastle — which was again denied two weeks later.

“By email dated April 22, 2024, Carol McCall with the MBHA confirmed MBSC ‘would have been awarded some vouchers’ but for the moratorium,” according to the complaint.

The complaint also attacks the short-term conversion ban on constitutional grounds, pointing to language in Article 1, Section 13 of the state constitution prohibiting governments from stripping private property rights for economic development.

The conversion ban zone “takes private property rights for the purposes of economic development by forced constriction of the properties into the city’s tourism industry in perpetuity to preserve it coveted tourism tax revenue streams,” the lawsuit says.

MBSC in its complaint says the conversion ban has prevented it from realizing nearly $6.5 million in profits.

“MBSC has also incurred damages in the form of millions of dollars in interest, carrying costs and attorney’s fees,” bringing its total unrealized losses to almost $10 million, according to the suit.

MBSC is suing city for unspecified financial damages on several grounds including due process violations, regulatory taking and violations of the Fair Housing Act of 1968.