Ocean City: Halt to short vacation rentals in neighborhoods hot topic

Some Ocean City homeowners have been fed up for years with short-term renters' rowdy stays.

Now, town officials are considering a new way to tackle the problem.

The Planning and Zoning Commission asked the town's legal department earlier this month to determine whether vacation rentals are legal in single-family and mobile homes.

If not, that determination could open the door to a ban on all rentals in those residential areas lasting less than four months and one day. That would bring the resort in harmony with Worcester County's definition of a short-term stay.

Commission members are scheduled to hear their attorney's interpretation Wednesday, Feb. 21, at 6:30 p.m. Any recommendation the board makes must be approved by the Town Council to become law.

Opponents, including the Coastal Association of Realtors, say the measure represents the biggest threat the resort's short-term rental industry has faced since they defeated a new zoning classification a few years ago. 

The so-called R-1A zone would have prohibited property owners from offering short-term leases. But all affected owners would have needed to signed off on the new designation before it could be implemented.

Planning Director Bill Neville told the commission this month he doesn't think short stays are allowed in subdivisions and mobile home parks. Such activity constitutes a commercial use, which is illegal in those settings, he said.

The town has implicitly endorsed those property owners' actions for years by issuing rental licenses to them and accepting the ensuing tax receipts in return, said Sarah Rayne, public affairs director for the Realtors group.

"Short-term rentals are already highly regulated by the town," Rayne said in a statement. "This proposal is an outright ban of any rentals shorter than 4 months and 1 day."

The controversy pits a small but politically powerful cohort of property owners against the town's landlord class. About 3,800 of Ocean City's housing units are occupied year-round, accounting for less than 13 percent of all units, according to the U.S. Census.

The town distributed 7,500 rental licenses in 2017. About 350 of those went to homes in single-family neighborhoods, town records show. The rest were divvied up among condominium owners and other types of complexes.

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