OCEAN CITY — The issue of short-term vacation rentals in the town’s single-family residential neighborhoods resurfaced this week as the Town of Ocean City closes in on its five-year update of the comprehensive plan.
Resort officials about three years ago began a debate about creating an R-1A zoning designation that would somewhat insulate the year-round residential communities after concerns arose over unruly renters disrupting neighborhoods. However, after considerable discussion, it was determined the issue would be better addressed in the town’s five-year comprehensive plan update, which is now nearing its conclusion.
In the interim, the focus changed from creating a new zoning designation to more stringent rental license requirements, maximum occupancy calculations and other policies including enforcing the sections of the code regarding short-term rentals already on the books.
Through the town’s Property Review and Enforcement Strategies for Safe Housing (PRESS) committee, the focus changed from considering a zoning change in the traditional year-round neighborhoods to R-1A, which would greatly alter the zoning codes in some neighborhoods, the focus changed to education and enforcement.
However, with the comprehensive plan update nearing its conclusion, a section of the updated plan includes language that could renew the debate about the potential R-1A zoning designation. It’s important to note the comprehensive plan is a broad look at all future growth and development in the resort and not a mandate to adopt certain elements including the possible creation of an R-1A zoning designation.
However, the mere inclusion of language in the draft comprehensive plan spelling out the potential for an R-1A zoning district has irked the Coastal Association of Realtors (CAR). The CAR last week sent a letter to the Mayor and Council voicing their concerns about the R-1A language in the comp plan. On Tuesday, CAR President Don Bailey read the letter into the record before the planning commission officially closed the public hearing on the planning tome.
“We see that R-1A has been included in the comprehensive plan update, even though enforcement and education measures put in place to address short-term rental-related concerns over the last three years seem to be working,” the CAR letter reads. “Legislation to implement R-1A has been seriously discussed twice, and both times we asked that the town focus on education and enforcement rather than an outright ban.”
The CAR letter states the area’s 1,000 or so Realtors understand the sanctity of the traditional year-round neighborhoods, but raises concerns about impacts on properties in the potential R-1A zone.
“As we’ve said before, we worry about the private property rights of single-family and condominium owners in these neighborhoods as well as the possible decrease in value of these properties that could no longer be purchased as investments,” the letter reads. “We also have concerns about a lack of rental options for families that prefer to vacation in R-1-zoned houses or condominiums rather than hotel rooms or condominiums in other locations.”
The CAR letter also raises concerns those non-resident property owners might not have a say in what is clearly a weighty issue for the resort.
“We also worry that property owners whose primary residence is not Ocean City may not know that R-1A is in the comprehensive plan, and although they pay town taxes, they may not have a vote in this debate because they are not primary residents,” the letter reads. “R-1A is a disservice to those property owners in particular because their homes would no longer be eligible for use as a short-term rental, therefore the value of the property may decrease and it could be more difficult for them or for their heirs to sell.”
CAR, through the letter, voices concern the potential creation of an R-1A zone could open the door to other restrictions on property rights throughout the resort.
“In the past, the town has argued that this zoning district would impact a relatively small number of properties that are currently used as short-term rentals in R-1 zones,” the letter reads. “However, we feel this is a slippery slope towards even more industry-harming restrictions as well as additional property rights violations.”
Planning and Community Development Director Bill Neville, whose department has led the update of the comprehensive plan, told the planning commission his staff had no problem with removing language related to the potential R-1A district.
“We have prepared a recommendation essentially to agree that we should remove references to the potential new zoning district,” he said. “There are too many potentials in the mix at this point. This update process was never meant to tackle big land-use issues in Ocean City. At this point, we don’t want to jeopardize the success of this comprehensive plan update with a big issue that probably deserves its own consideration.”
For one thing, Neville said it wasn’t entirely clear what the plan meant by short-term rentals, which cover a wide variety of situations for vacationers in Ocean City.
“There are a lot of things to resolve with this issue,” he said. “I’m not sure we’re discussing the same thing when we say short-term rentals. At this point, there is a big difference between something shorter than say four months or is it four days? We have to go back and solve that before we go forward with this.”
In a larger sense, Neville said the R-1A issue boiled down to how the resort viewed itself. Of course, there has to be a balance between quiet residential neighborhoods and vast rental areas for tourists, but Neville questioned to what extent.
“I do think we have a big balancing act with the principles of protecting residential neighborhoods for year-round residents and protecting the opportunity for real estate investment,” he said. “They’re both very valid concerns that are somewhat at odds when it comes to this issue. Are we a residential community for residents, or are we a resort town for tourists? That’s the balance we’re seeking with this issue.”
For its part, the planning commission seemed divided on the issue of whether to leave the R-1A language in the draft comprehensive plan. Commissioner Joel Brous said its mere inclusion in the plan did not represent a mandate to follow through with it.
“I’d like to keep it in there,” he said. “It doesn’t say we are going to do it and it doesn’t say we aren’t. It just says it is one of the possible solutions.”
Commissioner Palmer Gillis agreed, saying it was probably appropriate for the R-1A language to remain in the comprehensive plan.
“If you don’t put it in the comprehensive plan, then where would it go?” he said. “What’s the harm in leaving it in there? It’s only a planning document and it doesn’t say the town is going to adopt the zoning designation.”
Neville said inclusion of the R-1A language in the plan could represent eliminating another step in what would likely be a long approval process to create the new zoning designation.
“I think if it is in the comprehensive plan, that indicates the town is considering a change in the comprehensive rezoning,” he said. “That’s the concern.”
However, Brous said just because there was mention of a potential R-1A district in the plan did not mean the town intended to follow through with its creation.
“Let’s keep the tool in the tool box,” he said. “It’s not a tool for us to use. That’s up to the community to decide.”
On the opposite side, Commissioner Chris Shanahan agreed some property owners in the R-1 district could be blindsided by the creation of an R-1A district.
“I would hate to be an investor and have the rug pulled out from under me,” he said. “I would hate to believe I bought property believing I could rent it and then find out I can’t.”
Neville went back to the definition of a short-term rental. He suggested if a particular property in the R-1 district was rented over and over, particularly through a third-party rental agency, it could be considered a commercial property and no longer a residential property.
“There’s a point at which the number of times you turn around and rent a property when it becomes a commercial interest and not a residential interest,” he said. “Again, it comes back to the definition of a short-term rental. Is it a four-month rental or a four-day long weekend? If you have a third party putting rental in and out of a property, it is no longer a single-family residence. It becomes a commercial residence.”
After considerable debate, the Planning Commission took no action on the proposed revisions to the section related to the R-1A district and vowed to renew the debate when more information was obtained. In addition, Planning Commission Chair Pam Buckley, who has worked extensively on the issue, was not in attendance on Tuesday. That being said, it appears the majority of the planning body is inclined to keep the language in the comprehensive plan.
“The comprehensive plan is a broad-brush goal,” said Gillis. “It is not a decision-making document. I haven’t heard anything justifying taking that section out. It can be devastating to have these transient short-term rentals coming in and out.”