Commissioners Want To Add Rental License Requirement To Boost Revenue

SNOW HILL – Officials agreed to update Worcester County’s zoning code and explore rental licensing requirements this week.

As the popularity of services such as Airbnb grows, the Worcester County Commissioners on Tuesday voted 5-1 to have staff update the county’s zoning code in order to establish rental license requirements.

“This is a revenue generator the county needs to move towards,” Commissioner Joe Mitrecic said.

At the request of the commissioners, Director of Development Review and Permitting Ed Tudor and Finance Officer Phil Thompson reviewed room tax and rental licensing programs in Talbot County and Ocean City. Tudor outlined how Talbot County had purchased a software program to manage and identify short-term rentals. Thompson talked about Ocean City’s letter-writing campaign to inform all property owners who were leasing their homes — particularly those who did so via online sites such as Airbnb — they were required to be licensed.

“There’s no question the online portals are very much becoming a factor in the marketplace there,” he said.

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Thompson said that if the county was interested in identifying people who were offering short-term rentals, it first had to have an up-to-date code.

“When we start going after the violators, if you will, that definitely gets into us having adequate code in place and us having the proverbial hammer to go after someone who’s violating the rules,” he said.

Tudor agreed and said the county’s current code was a mess, as it didn’t even include a rental license. Furthermore, the code currently doesn’t allow someone to have more than two roomers or boarders.

“If you look at any of these Airbnb or any of these other sites most of them they’re advertising are a single bedroom perhaps with two double beds,” he said. “You couldn’t even have it under zoning so you’d be removing those if you don’t update the zoning ordinance…If we were to enforce what’s on the books today I don’t know we’d really be getting anywhere.”

Mitrecic made a motion to have staff move forward with cleaning up the code in order allow for rental permits. He said he’d been asked recently why a citizen should have to have a rental license to rent their house.

“When you have a single-family home that has a couple or a couple with two kids or whatever living in it, it creates certain problems that we are equipped for, for a single-family home,” he said. “If you put two families of vacationing rental people in there for a week, it changes those activities … it puts stress on our police, possibly on fire EMS, certainly more traffic on our roads, more solid waste, more water, wastewater.”

He added that if someone was earning income from renting their home, they should be paying the state sales tax.

“Which we have no way of knowing one way or the other so the state’s actually losing money on that also,” he said.

Mitrecic said the commissioners had just approved more than $40 million in spending for a new school and other projects and was also facing rising post-employment benefit costs. He indicated Chief Administrative Officer Harold Higgins needed an increase in revenue to address rising expenses.

“Harold’s not printing money and he doesn’t have a change jar,” Mitrecic said. “We’re going to have to find some money and this is a possibility for us to increase revenue.”

Commissioner Jim Bunting said he’d had doubts about the impact of short-term rentals until he’d looked online.

“I think this is an important issue and I support the motion,” he said.

Commissioner Chip Bertino, however, objected to the creation of a rental license.

“I think that yet again we’re trying to reach into people’s pockets and I don’t really buy the justification that we’re going to get all this money out of it,” he said. “Ocean City’s already doing it, that’s fine, that’s within their jurisdiction to do it, but I don’t think the county ought to be doing it.”

He said the county shouldn’t be sending staff to private residences.

“If a homeowner wants to rent his house for a weekend for some reason I don’t think it’s any of the county’s business to do that, to get involved in that or to charge them for it,” Bertino said. “What are they getting for their license? Regardless if it costs $1 or $75 what are they getting? The opportunity to do what they should be able to do with their own house anyway? I have real problems with it. I’m not going to support this at all because I don’t think that the problem’s there that’s been portrayed.”

Commissioner Bud Church, who represents West Ocean City, expressed support for Mitrecic’s motion. He said during the summer he’d get calls from people who had rented their home to eight people and found 25 people staying there.

“Contrary to what my friend Chip Bertino said, there needs to be some enforcement and right now there isn’t any enforcement,” Church said. “If they were licensed, there would be some enforcement action that could be taken against them. There would be some accountability. We would know where those properties were.”

He acknowledged that some property owners would object to having to purchase a license.

“I’m going to take a little bit of heat but there has to be some accountability and I think that addresses that issue,” he said. “I’m very much in favor of this.”

Commissioner Josh Nordstrom said Bertino had raised a good point but that he thought rental licensing should still be explored.

“These Airbnbs, these private rentals, they compete with our hotels, they compete with these businesses who are here and pay their taxes and their licensing fees,” he said. “If it’s essentially the same as staying in a hotel or similar I think they ought to be subject to the same sort of laws that the hotels are.”

The commissioners voted 5-1, with Bertino opposed, to have staff update the zoning code and develop a framework for rental licensing. Commissioner Ted Elder abstained, citing the fact that he owns a rental property.

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.