Public Hearing On Resort Rentals Brings Crowd To City Hall; Most Advise More Enforcement Needed

Public Hearing On Resort Rentals Brings Crowd To City Hall; Most Advise More Enforcement Needed

OCEAN CITY – A public hearing concerning issues coming with rentals in single-family and mobile home districts resulted in standing room only this week at City Hall with the majority of speakers asking the Planning and Zoning Commission to focus on enhancing the enforcement of existing rental regulations.

On Tuesday evening, the Planning and Zoning Commission held a public hearing to consider amending Ocean City’s Code in regards to R-1 Single Family Residential District and MH Mobile Home Residential District for the purpose of regulating short-term and long-term rentals to protect the character and compatibility of the districts as single-family neighborhoods.

The public hearing came on the heels of growing complaints over rental properties. According to the city, there are 3,845 parcels included in the R-1 and MH districts with 276 of those obtaining rental licenses. Between 2013 and now, there have been 67 complaints logged in those areas over 19 months. Only 13 properties received complaints, which is 4 percent of the total number of 276. The complaints received are primarily from residents of the Mallard Island subdivision.

Before public testimony was given, Commission Chair Pam Buckley reminded the room there is no proposed legislation on the table to ban short-term rentals in residential communities of Ocean City.

“We [Ocean City] need single-family homes, we need year-round residents, we need our second-home buyers, we need the people that come on the weekends, the vacationers, and we need our student housing and seasonal workers,” Buckley said. “We are here only to garner information. There is not an ordinance in place we are to vote on. There is not anything that is going to be for or against testimony. This is a Planning and Zoning Commission public hearing, and we are here to collect and analyze the data, and come up with anything that we feel we may garner from that information that you all present with us tonight that might aid a zoning ordinance or enforcement issues for the rentals in single-family areas.”

Independent renter Brad Maunz said he takes the task of renting his Ocean City property seriously imbedding the language of the town’s rental regulations within his lease agreements.

“I strongly believe that the single-family residence or unit adds to the appeal of Ocean City,” he said. “I am in favor of strong enforcement to ensure the rights of property owners. I have plans to live here permanently someday, and I have the utmost respect for my neighbors. I believe that restricting rentals of single-families is like treating a rash through amputation, and what I would like to see is you put some teeth into the enforcement.”

George Sellers, who rents two properties in the community of Montego Bay, agreed, stating the town already has laws in place to deal with unruly rental behaviors.

“If the existing standards and penalties are enforced, owners who rent properties would be much more careful in restraining potential renters, and we believe that renters themselves would comply better if there was better enforcement,” he said.

Sellers pointed out the Town of Ocean City requires property owners who rent their homes to obtain a rental license and noise control permit that comes with a decal that is to be visibly displayed for when police approach a home due to a complaint that allows them to easily contact the property owner or the property owners contact to address the issue.

“If renters are causing problems and the decal is present, the property owner can and should be notified. If the decal is not present, the property owner should be contacted and cited for violation of the city ordinance,” he said. “An amendment to establish minimum rental periods is misguided and will not achieve the goal of peace and quiet in residential communities…adding another regulation may not be enforced any better than the existing regulations already in place. Restricting a homeowner’s freedom to enjoy their home and the homeowner’s right to defray the cost of homeownership by short-term renting I think is discriminatory, unfair and an arbitrary move to do it.”

Chris Jett spoke on behalf of Coastal Association of REALTORS (CAR), which is the leading local property rights advocacy group in the real estate industry on the Eastern Shore of Maryland.

“In the absence of rental profits, the value of these homes may decrease and the pool of potential buyers may shrink,” Jett said. “Also, if negative publicity continues, tourists may choose to take their business elsewhere, as some may prefer to rent a single-family home in a residential neighborhood, rather than stay in a hotel/motel or condominium. Additionally, tourists who become aware of a ban on short-term rentals might perceive the ordinance as being motivated by an anti-tourist sentiment. Even a slight impact on tourism in the city could negatively affect local businesses that provide services to tourists such as restaurants and retail stores.”

CAR proposed several alternatives to the city, including increased enforcement of regulations that are already in place; issuance of rental licenses with attached conditions such as occupancy limits as well as noise and parking restrictions; a comprehensive education program for property owners; a requirement that all rental properties have a local contact who can respond immediately to complaints or emergencies, in addition to immediate notification of the contact by city officials; and establishment of a Home Owners’ Association in Mallard Island that would allow for a rental restriction in its covenants.

Jett furthered the city’s statistics proved that short-term renters are not as incompatible with single-family neighborhoods as some make them out to be.

“[CAR] strongly urges the city to concentrate on enforcement and education, rather than outright prohibition,” he said.

Jerry Milko of Holiday Real Estate warned the commission of long-term negative effects in making a change to zoning.

“What I see is we need to protect the peaceable enjoyment and the quality of life in R-1, as well as in R-2 and R-3. Our future as a resort is the family. Our history is a family resort. I am concerned about what I see as changing demographics in this town,” he said. “Interestingly enough the short-term vacation rental is the easiest for the responsible property owner and agent to control. We developed the lodging agreement that provides very specific actions that can be taken if there are problems with a short-term rental.”

Milko furthered it would be premature to make a change and that perhaps the commission should concentrate on the growing underground rental market in Ocean City.

“If you need the income from the rental, the short-term rentals generate a 10.5 percent tax, you can save the rental management fee and you can save the tax fee, so it gives you the incentive to try to rent underground without going through the rental licensing, and there are effective ways to reduce that,” said Milko, offering to work with the city.

Another suggestion Milko offered is to require a 24/7 contact when applying for a rental license and if not the license should be rejected. Also, develop a rental complaint database where complaints can be tracked to why and where that can aid future changes to Ocean City’s rental code if need be. As well as, developing a point system where responsible renters can be rewarded with points and in return rental licensing fees can be reduced, much like the concept of driver’s license points.

Many others came before the commission voicing their concerns with many stating the same issues of enforcing existing regulations, regulating the number of visitors in one home and even several recommending beginning to fine the renters for unruly behavior.

In the end, Commission member Lauren Taylor thanked all for attending.

“Thank you for your testimony. It was exactly what we needed. We knew there were problems, and we needed information to deal with this working with all of you,” she said.

The hearing was closed but the commission did not deliberate that night. Discussion will continue at the next scheduled Planning and Zoning Commission meeting on the evening of Sept. 3.