Short-Term Rental Definition Weighed As Online Booking Concerns Continue

OCEAN CITY — The effort to define short-term rentals in Ocean City, particularly those in single-family neighborhoods, continued this week, and although challenges remain, resort planners appear to have locked in a solution to the thorny problem.

In the wake of growing complaints about vacation rentals in some of Ocean City’s traditional year-round neighborhoods, resort officials about three years ago began a debate about creating a new R-1A zoning district that would somewhat insulate year-round enclaves from the noise, traffic and parking issues associated with transient rentals. After considerable backlash, resort officials abandoned the proposed R-1A zoning district and vowed to renew the debate during the comprehensive plan update process.

With the comprehensive plan update process now nearing the finish line, the planning commission this week renewed talks about short-term rentals in the existing R-1 district and related residential districts further up the town’s pyramidal zoning classifications. Planning and Community Development Director Bill Neville told resort planners he envisioned a multi-step process, the first of which was clearly defining a short-term rental.

“I don’t think we want to repeat what happened before with the R-1A ordinance,” he said. “I’m sensitive to that. Our first conclusion is one of the most important things we do as a first step is come up with a definition for short-term rental.”

The issue is complicated. On the one hand, the town is trying to clearly define short-term rentals in an effort to insulate the traditional year-round neighborhoods. On the other hand, there are property rights issues including an individual’s right to purchase a property with the expectation of being able to rent it at some point.

“When we look at the public comments, there was a lot of concern about the loss of property rights,” said Neville. “We don’t want to come up with a definition that takes something away.”

Resort planners are tasked with defining just what a short-term rental is. Is it the traditional one-week family vacation? Is it an extended four-day weekend or is it something much longer? Neville said the answer could be found in the existing county tax code that defines a short-term rental as four months and a day. Under the county code, anything less than that is considered a commercial use with all that entails, including collecting and remitting room tax, for example.

“The basic argument is a short-term rental is a licensed use and a taxable use,” he said. “If you go to the room tax code for Worcester County, the standard is four months and a day. Anything less than that is considered a transient use and is not permitted in our R-1 district.”

Planning Commission Chair Pam Buckley said the county’s four months and a day standard could be applied in Ocean City’s R-1 district.

“I think we can use the county definition of short-term rental at four months and a day,” she said. “It has been in place for years and years, at least since 1974 when I first moved here.”

There have always been short-term rentals in the traditional year-round neighborhoods, but the dynamics have changes with the proliferation of online rental platforms such as Airbnb, for example. In the past, a property owner might rent their home for a week in the summer to family members or friends with the expectation they would be cognizant of their year-round neighbors. Now, single-family homes are being rented for short, three-day or four-day stints.

“The people that rented the homes knew the owners,” said Planning Commissioner Lauren Taylor. “They were related, or they were co-workers and there was some inherent responsibility. Now, with things like Airbnb, they don’t know the renter. A lot of that responsibility is gone.”

Buckley said in her personal experience, rentals in the year-round neighborhoods were typically seasonal in nature and the year-round residents largely got along with the seasonal renters.

“I had a rental behind my house for 40 years,” she said. “It started with six bartenders and waitresses here for the summer. We talked over the fence and got to know them. Now, you have three people this week and four different people next week. The more you have a rapport with the renters, the more control there is and the more responsibility there is.”

Planning Commissioner Peck Miller said the four months and a day standard for short-term rentals made sense, but warned any definition should preserve the traditional year-round neighborhoods.

“Is there a real need, or are we missing something here?,” he said. “Short-term rentals don’t belong in the R-1. We need to protect the sanctity of that zoning designation. That’s where our residents live and where they are raising their children. We have to be careful with that. It’s a very fragile environment in terms of zoning and we have to protect that.”

The planners agreed four months and a day could be a starting point for a definition of short-term rentals, but wanted to make sure of the legality of the proposed new standard. They instructed planning commission attorney Jon Bulkeley to research the legality and vowed to revisit the issue.

“We need a confirmation that four months and a day is a permitted use in the R-1,” said Buckley. “If that is not true, then we continue to treat the symptoms and not find the cure.”

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.