For now, Ocean City nixes any short-term rental ban

Real estate agents no longer have to worry about a new zone that would limit short-term rentals in certain residential areas in the Ocean City comprehensive plan.

The Ocean City Planning and Zoning Commission voted Tuesday to leave out the hotly debated new zone, but promised upset residents that the commission would address the longtime debate over renting in residential districts in the near future. 

"The biggest thing is to come up with these ordinances and codify the things we need to (in order to) protect the people living there, so that the people buying property know what they are dealing it," said Pamela Buckley, chairperson of the Ocean City Planning and Zoning Commission.

The vote passed 4-2 with commissioners Joe Wilson and Palmer Gillis voting in opposition. Commissioner Joel Brous was not present at the meeting.

Currently, Ocean City code states only four non-family tenants may rent together in the R-1 zone, a single-family residential development, which makes up 5.4 percent of the town's residential units. There are five pockets of this zone in Ocean City, the largest being the area in northern neighborhoods like Caine Woods, which borders the Delaware state line. 

The code does not limit the length of stay for those tenants, leaving the opportunity for weekend and weekly rentals. 

Over the years, numerous noise complaints and unruly visitors led to a conversation about a R-1A zone that would limit short-term rentals to protect the families that live in those neighborhoods year-round. 

In 2014, the commission fielded complaints from the public about the noise levels and the amount of people coming out of a house on Teal Drive. The next year, the commission recommended to the town that a new zoning district be created in which leases shorter than 12 months would be prohibited.

Both times the Ocean City council decided to not take action on these measures.

BACKGROUND: Ocean City short-term rental ban proposal raises property rights objections from Realtors

READ MORE: After H2Oi, no Cruisin' in Ocean City?

Now, as the specifics of the new zone were discussed about being entered in the new comprehensive plan, the Coastal Association of Realtors objected the change, claiming it would stifle an individual's property rights. 

After hearing residents' and realtors' concerns, a decision was made by the commission Tuesday. It decided that while the rental debate needs to settled, it was not necessary to entangle the R-1A zone with the 2018 comprehensive plan update. 

"The (R-1A) had not been adopted by mayor and city council and there was still work to do," said Bill Neville, director of Planning and Zoning. "The feeling was that it is premature to list it as an option when it hasn’t been adopted yet."

Don Bailey, president of the Coastal Association of Realtors, said in a statement he is "pleased" the commissioners agreed with his organization that the comprehensive plan was not the place to address R-1A rentals.

Chris Mitchell, regional vice president for Coldwell Banker Vacations, said there needs to be caution in moving forward.

"I am glad to see the language was removed from the plan," he said. "But we need to remain diligent and keep this issue in our minds because want to ensure the property rights of owners in Ocean City is respected going forward."

The frustration that the commission voiced Tuesday foreshadows future deliberations that will ensnarl all parties. 

As it had been discussed, communities wanting to switch from R-1 to R-1A would need to petition to have their properties rezoned.

But specifics like what length of stay equals a short-term rental and how many members of the community looking to be rezoned were not defined, which is what worried real estate agents. 

"The town has not formally established the definition of a short-term rental, nor have they ironed out how R-1A will be implemented," Bailey said. "Will it apply to all R-1 neighborhoods, or will it be granted on a neighborhood-by-neighborhood basis, and will 100 percent of the property owners need to opt in?"

The commission focused the discussion Tuesday on protecting the rights of those who live permanently in Ocean City in residential areas. Of the 30,119 housing units in the 2010 census, 3,852 of them are occupied year round, or 12.8 percent.

There were 348 rental licenses issued for R-1 zones in 2017, which was 4.6 percent of the 7,500 total licenses issued. 

The commission also discussed the profits that homeowners can make by churning weekend after weekend of visitors, which was not in the definition of a R-1 zone.

"It's not a commercial district," said Pamela Buckley, the commission's chairperson. "And it's not supposed to be a business."

Houses in residential areas were built with the intention of having people live in them, said Commissioner Lauren Taylor.

"There has to be more protection for these areas," she added.

The commission wants to put the issue of redefining short-term rentals on their work plan, Neville said in a phone call after the Nov. 7 meeting.

"They wanted to work on those issues and come up with a clear answer," he said during the call.

Hopefully, the town can continue to work with the real estate community to provide training and education for renters in residential areas, Buckley said.

The comprehensive plan was not the place to address this issue and make definitive decisions, she added.

"This is just making a strong case for upholding single-family neighborhood," she said.

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