(June 19, 2015) If you couldn’t have guessed how Tuesday night’s zoning hearing was going to go, it became obvious when you walked in the room.
Residents of Mallard Island wore yellow buttons reading “I support R-1A.” The real estate lobby brandished bright orange signs saying “private property rights matter!”
They even sat on opposite sides of the chamber. Instead of the Ocean City Planning and Zoning Commission, it would not have seemed out of place for Maury Povich to have been adjudicating.
He wouldn’t have been needed, though. Despite the expectation that the commission would not take a final vote on the issue that night, the hearing body voted five-to-two to recommend the creation of a new zoning code designation, to be dubbed R-1A, that would further restrict the existing single-family R-1 stipulations by prohibiting rentals of less than 12 months in duration.
“What the residents are asking is for us to put a tool in the toolbox,” said Commissioner Palmer Gillis. “What we’re proposing this evening does not impact one piece of property or one neighborhood, but it’s giving those neighborhoods that come to a collective decision the ability to place this restriction on themselves.”
If approved by the City Council, the ordinance would create a clause in the city’s zoning code defining an R-1A district. It would not, however, rezone any parts of Ocean City to the R-1A designation.
Residents of a given neighborhood themselves would have to petition, per state law, to attempt to prove that rezoning was necessary, either because of an error in the original zoning code or interpretation thereof, or because of a change in the nature of the community.
“I think it’s going to be very difficult for any community to get this designation, quite honestly, but as Palmer said, it’s a tool in the toolbox,” said Commission Chair Pam Buckley.
Technically, any area of Ocean City could seek R-1A status, leading Coastal Association of Realtors President Joe Wilson to voice his fear of a “slippery slope” scenario in which swaths of the resort were closed to rentals.
“Adoption could open the door for future requests,” Wilson said. “Who’s to say that the mayor and City Council would not accept requests from R-2 or R-3 districts?”
However, the city is clearly more amenable to granting R-1A status to districts that would already be next to it on the zoning ladder. Currently, R-1 is the most restrictive status on the zoning pyramid, allowing only detached single-family homes. R-2 districts allow townhomes and low-density condos, and R-3 districts allow high density residential and some commercial uses.
The only area that clearly intends to seek R-1A status is Mallard Island, a small neighborhood located on a peninsula off 15th Street that is already zoned R-1.
Mallard Island residents were the ones to request creation of an R-1A zone, which they feel is necessary to prevent the conversion of what used to be family homes with long-term occupants into weekly vacation houses. Two properties in the neighborhood are currently rented to weekly tourists, which residents say have caused myriad issues with trash, noise, speeding, and illegal parking.
“We have seen an increase in noise, public drinking, profanity, and trash in our streets,” said Mallard Island resident John Wright. “There’s absolutely no need to turn our established, tranquil community into something it doesn’t need to be. This [ordinance] will allow current R-1 property owners to determine the fate of their own neighborhoods.”
Currently, the controls the city has over temporary tenants in R-1 zones are the city’s noise ordinance, the building code’s limit on occupants per bedroom and the existing zoning stipulation that no more than four unrelated persons may occupy a home for it to be considered single-family.
The latter two are nearly impossible to enforce, city Zoning Administrator Blaine Smith said, as he and his staff lack the legal authority to require occupants produce proof of their family status.
“To enforce the definition of family is very difficult, or to know who’s coming and who’s going,” Smith said.
Although noise complaints provide the quickest action, there are frequent complaints that police do not follow through by contacting the landlord, issuing a fine, or referring the case to the city’s Noise Board for discipline. Further, once the call is made, residents have already been disturbed.
“It puts a strain on residents,” said Mallard Island homeowner Geoff Robbins. “People are constantly calling Blaine, calling the police department … it’s important to our neighborhood, yes, but it’s also important to the whole town with the drain it puts on all our resources.”
But Realtors objected to the idea that a majority of neighbors could place restrictions on a home purchased with the intent of renting, which may itself not be creating the problem.
“This legislation is unfair to those property owners who purchased property with the belief that they could rent their properties,” Wilson said. “The majority of properties in Ocean City cannot generate as much money renting year-round as they can renting weekly … many of our buyers require rental income in order to pay their mortgage.”
According to Smith, if the R-1A designation were to enter the code, any grandfathering or sunset period on rental rights could be assigned by the City Council, if and when it were to grant a specific neighborhood’s request for a zoning change.
Wilson also pointed to the city’s pledge last year to better organize its joint property enforcement committee – known by the acronym PRESS – as needing time to work.
Describing the need for new zoning as “premature,” Wilson said “the town has regulations to reprimand tenants and landlords when violations occur … we need to measure the effectiveness of this effort over time.”
However, those in favor of the R-1A zoning found this to be the exact problem. With new tenants coming in at least once per week, noise fines have little to no cumulative effect.
“There’s been no change because enforcement has proven to be impossible,” said Mallard Island resident Frank Knight. “No evictions can occur in that timeframe, and everyone knows it, so us – the taxpaying, voting residents – are left to anticipate what next week will bring.”
Other Realtors questioned why this issue was being brought back on them.
“How is further restriction on landlords and property owners and investors helping that issue?” asked Realtor Paul Fried. “I don’t see why we can’t ask more out of those people who are coming to Ocean City.”
“We have a high demand for single-family homes and if we lose those places and cannot accept those customers, then they will go to other areas,” agreed Realtor Terry Miller. “Maybe we need to look at what we’re doing and who we’re attracting to make sure that people act right everywhere.”
There appeared, however, to be a fundamental disagreement over who “we” were.
Realtors, one on hand, seemed to believe that city government was responsible for stemming the growth of rowdy renters. The commission, on the other hand, viewed the proposed R-1A clause as a tool that could be used in situations where Realtors proved unable to control their tenants on their own terms.
Notably, Ocean City’s rental license fee, which is designed to support noise enforcement, is only $141 per year.
“Do the landlord licensing fees support the current level of service, or would you need more or less financial support to provide the level of enforcement services suggested this evening?” Gillis rhetorically asked Smith.
“It will take more monies and fees to create a better force,” Smith said. “We’re a skeleton crew … there are needs out there that obviously aren’t funded.”
Commissioner Lauren Taylor posed that, given the testimony from Realtors that issues with tenants are not being properly addressed by the city, the logical solution from the city’s end would be to create a policy that allows the issue to be cut off at the head if it is proven to be, as residents claim, uncontrollable.
“Most the things I’ve heard tonight from the opposition support a situation where you don’t have these problems that need to be solved,” Taylor said.
The commission, as well as R-1A advocates, were further skeptical of the argument presented by Realtors that rental restrictions would reduce property values, since clients would be unwilling to pay for property they could not use to generate income.
Rather, the limited market for non-vacation housing would drive the value of R-1A homes up, advocates said.
“The more limited the supply, the higher the value tends to be,” said Mallard Island resident Ed Smith, himself a Realtor and owner of a real estate licensing and continuing education school. “If a small subdivision were to obtain R-1A zoning, there would still be thousands of homes that investors could buy and rent.”
Roughly 5 to 6 percent of Ocean City’s housing stock is in existing R-1 zones, Buckley said. Of the city’s registered rental properties, only about 2 percent are single-family homes.
“There are 268 rental units in R-1 districts,” Knight said. “To answer the real estate agents – who do not have a community interest, but rather a financial interest in this – there will not be an impact on the market. Visitors will still have over 20,000 condo units to choose from.”
From a legal standpoint, the discussion of the current ordinance should not hinge on any given scenario in which a given area becomes an R-1A zone, as the ordinance does not prescribe that any given neighborhood must be re-zoned as such.
“This isn’t being imposed on anyone,” Taylor said. “This is an option people can choose for themselves if necessary, and I don’t know why we can stand in their way.”
Commissioners Chris Shanahan and John Staley voted against moving forward with the R-1A ordinance, although both said they were not necessarily against it, but needed to more time to think about what was said rather than taking a vote at the hearing. The ordinance will still need to be approved at two public hearings before the City Council before it becomes codified.
OC Today Editor Stewart Dobson is a Mallard Island resident, but did not participate in the hearing.