Ocean City Today

R1-A proposal gets shelved temporarily

By Katie Tabeling | Oct 19, 2017

(Oct. 20, 2017) Before resort officials resurrect the R-1A zoning district to stop short-term rentals from moving into single-family neighborhoods, the Planning and Zoning Commission will need to define what a short-term rental is.

Planning and Zoning Director Bill Neville told the Planning Commission Tuesday night that the few references to the proposed zone contained in the new draft of the comprehensive plan should be eliminated, because he thought it required a larger discussion.

One of the objectives outlined in the draft is to “identify single family areas with a high percentage of resident owners who may support the proposed R-1A district with limitations on short-term seasonal rental use.”

“The update process [for the comprehensive land use] was never meant to tackle land use,” Neville said. “I’m not sure we’re discussing the same thing when we talk about short-term rentals. There’s a difference between four months and a four-day weekend.

“I do think we have a big balancing act with the principles of protecting residential neighborhoods for year-round residents and protecting the opportunity for real estate investments,” he continued. “They’re both valid concerns but they’re somewhat at odds when it comes to this issue.”

City officials began talking about creating the R-1A district in 2015 as a way to prevent the conversion of single-family homes into weekly vacation houses in what once were primarily residential neighborhoods.

Instead, the council elected to tighten existing restrictions on R-1 homes, such as implementing a new rental licensing procedure, posting a map of R-1 rentals online and conducting an annual informational meeting for landlords.

So-called problem properties were also brought before the Property Review and Enforcement Strategies for Safe-housing committee (PRESS).

Roughly 10 percent of Ocean City’s 30,000 housing units was used for single-family residences in 2016, according to planning officials.

Coastal Association of Realtors President Donald Bailey argued that reintroducing R-1A would infringe on private property rights and reduce property values, since people would be unwilling to buy property that could be rented.

To bolster that argument, the association said roughly 37 percent of investment property buyers purchased a home last year to generate income through renting the property and 16 percent purchased for potential price appreciation, according to the 2017 National Association of realtors Investment and Vacation Home Buyers Survey.

The average sale price of a single-family home in Ocean City in 2016 was $411,800, which is higher than the surrounding areas for someone who plans to live in the property full-time, said CAR Public Affairs Director Sarah Rayne.

“We worry … about the potential decrease in value of these properties that could no longer be purchased as investments, and a lack of rental options for families that prefer to vacation in R-1 zoned homes or condominiums,” he said. “This sends a wrong message to tourists, in that the town tells them that their patronage is wanted, but they can only stay in certain parts of town.”

Neville refuted Bailey’s claim that R-1A would restrict property rights, as somewhere down the line, repeatedly renting it a property makes it a commercial use.

“I’m not sure someone who purchased a R-1 single family house ever had the right to do rentals on a daily or weekly basis,” he said. “That’s not what the zoning district said, it’s not what the structure is designed for, and it’s not a property right that’s being given up.”

Commission members Palmer Gillis and Joel Brous also disagreed and thought that R-1A’s scant inclusion in the comprehensive plan speaks to the larger issue of protecting year-round residents.

“If we don’t address it in the comprehensive plan, which is a vague guideline for planning, where do you identify that goal?” Gillis asked. “I don’t see the harm in leaving the language in there if it adds more emphasis of reaching the goal.”

“I’ve always said keep the tool in the toolbox to have it handy,” Brous added. “Just to have the option.”

“I don’t think the tool would be in the tool box without the intent to use it,” countered commission member Joe Wilson, who also serves on the CAR board of directors.

Gillis pointed out that R-1 neighborhoods would have to petition to become a R-1A district, thus putting the tool in their hands.

“We’re not the one implementing the use of that tool,” he said. “The community gets to do that, and it’s up to us to provide the resource for it.”

The issue of adding a tool for residents to use to determine their neighborhood’s fates was moot, as attorney Jon Bulkeley said that short-term rentals needed to be defined in the code first.

Neville added there will be a time when the mayor and City Council will have to address the matter, as it was brought up during strategic planning sessions.

“Are we a residential community with residents or are we a resort town for tourists? At some point, [they’re] going to be looking for guidance on how to tackle those opposing viewpoints,” he said.”

The commission agreed to discuss the matter further at its next meeting, when Chairwoman Pam Buckley will be in attendance.

But before the discussion ended, Gillis advocated for the R-1A inclusion in the comprehensive plan one last time on behalf of the year-round property owners.

“We’ve talked about this for a long time, and the multiple rentals of transients detract from these minute year-round neighborhoods,” he said. “After listening to neighbors come in and ask for it, I don’t see how we can deny it.”

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