OCEAN CITY – Officials in Ocean City this week voted to advance a code amendment pertaining to non-accessory workforce housing, but not before a debate on the permitted length of time for rental and lease agreements.
On Monday, the Mayor and Council had before them the first reading of an ordinance amending the town’s zoning code to allow non-accessory workforce housing. While the changes would provide incentives to build off-site employee housing projects in town, officials this week agreed more work was needed to address the minimum duration of rental or lease agreements for such developments.
“We had some internal discussions about whether we ought to do 90 days or four months and a day,” said City Manager Terry McGean. “The 90 days was set up because that is seasonal, June, July and August …The law is if you are renting for less than four months and a day, you are going to be charged room tax.”
Since last year, resort officials have been working on a proposed code amendment that could help address a shortage of workforce housing in Ocean City. As it currently exists, the town code defines employee housing as accessory use, or living quarters with a portion of a main building or an accessory building located on the same site to be used by individuals employed on the premises. But officials are looking to include employee housing as non-accessory use.
In a work session last month, the Mayor and Council agreed to forward the code amendment to a first reading, but with several changes to tier levels and approval processes.
Simply put, tier one projects are those with 16 or fewer residents, while tier two projects are those with 17 to 60 residents and tier three projects are those with more than 60 residents.
The amendment also sets restrictions for zoning districts. Employee housing would be prohibited in the MH and R-1 districts. In the R-2, R-2a and R-2a districts, tier one projects would be permitted, tier two projects would be allowed by conditional use and tier three projects would be prohibited. In the R-3 district, tier one projects would be permitted and tier two and tier three projects would be allowed by conditional use. And in all other districts, tier one and tier two projects would be permitted and tier three projects would be allowed by conditional use.
Back on the agenda for a first reading Monday, Councilman Tony DeLuca questioned if the amendment established a minimum length of time for rental or lease agreements. Howarth said she recommended a 90-day minimum.
“If the council is inclined and they want to have a rental or lease agreement minimum, you could add language that says the rental agreement or lease agreement shall be for a minimum of 90 days,” she said.
Councilman Peter Buas, however, said he took issue with the 90-day minimum, as it did not meet the room tax threshold.
“I really think it should be four months, 120 days,” he said. “That’s the room tax line. I think we should be using that as a guide.”
McGean said staff had discussed the issue and had identified some concerns related to the duration of rental or lease agreements for seasonal housing. He noted many J-1 visa students booked lodgings week to week. Officials also pointed out that many seasonal employees did not stay past the summer months.
“Usually, they write the lease for four months and a day, and if they leave early, they leave early,” Buas said.
For her part, Howarth said she would still recommend a 90-day minimum.
“I would do 90 days, which is the summer season,” she said.
After further discussion, however, the council voted 6-0, with Councilman Will Savage absent, to approve the ordinance on first reading and to direct the city solicitor to come back with an alternative for the minimum length of time required for rental or lease agreements.
“I’d rather get this right now,” Buas said.