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Ocean City

Rental home overcrowding concerns grow

(June 13, 2014) There goes the neighborhood.

In light of a recent discussion about the matter at the city’s Planning and Zoning Commission, many residents of the resort’s few remaining owner-occupied neighborhoods are reporting a significant uptick this season in formerly single-family homes being used as overcrowded tourist lodging.

“There are a couple of overcrowding issues that happened over Memorial Day weekend, which we’re currently keeping an eye on,” said city Planning and Community Development Director Matt Margotta.

But residents say that if the city does not start acting faster, their neighborhoods will end up the real estate equivalent of the thylacine, pushed to extinction by the dingo of an ever-tighter rental market.

“If they want people to stop doing what they’re doing, they have to start enforcing the law somehow,” said Steven Cirile, who runs a recording studio out of his home on North Surf Road in the Caine Woods area of the resort.

According to Cirile, a formerly single-family home on his street is now renting to large groups of people – 23 over Memorial Day, he said, who held loud, raucous parties and harassed residents.

“I have elderly neighbors who ended up literally locking themselves in their house because of it,” Cirile said. “It’s not right.”

Housing dozens of vacationers in a single-family residence typically violates three parts of the city’s code. Firstly, any noise complaints can be referred to the town’s noise board, putting black mark on the property’s rental license and possibly causing the board to revoke the owner’s rental rights.

Secondly, having a number of persons beyond the fire safety code limit will cause a fine and possibly immediate eviction from the fire marshal. Thirdly, in areas zoned R-1 – which allows only single-family residences – the city prohibits more than four unrelated persons occupying the same house, to protect the intended character of the neighborhood.

However, enforcement of these statutes is largely complaint-driven, and an immediate resolution is not guaranteed unless city officials arrive in time to see violations in the act.

“It kind of depends what’s going on, but usually the police are the first ones to arrive,” Margotta said. “Depending on what they observe, they may refer it to us as a zoning violation, and depending on the situation, it may be something where you fine somebody or not.”

“It doesn’t immediately solve the problem,” Margotta said. “When you’re in a family neighborhood, it comes as quite a surprise…I certainly understand where [residents] are coming from.”

According to Cirile, multiple calls to the police over the weekend resulted in officers not arriving in time to personally witness the problems. Only a call to an elected official netted him a timely response, Cirile said. Zoning officials did not respond until Monday evening, after the renters had left.

The owner of the property was notified that complaints had been received and was informed of city’s statutes, Margotta said.

Requirements for city rental licenses do mandate that owners record the names and personal information of all individuals staying at their property at a given time, although it is unclear if, and even how, this could be enforced.

Several weeks ago, Dr. Geoff Robbins had approached the commission regarding the same issue in his neighborhood on Teal Drive. Robbins argued that he and his neighbors had paid a premium to live in an R-1 district, and that it was incumbent on the city to make sure the integrity of the zoning stayed intact.

Cirile said his neighborhood had the same sentiment – if the city was not going to adhere to the intent of its own zoning code in protecting residential areas from encroachment by weekly rentals, the residential base would wither.

“We’re trying to get people to move here, not drive them away,” Cirile said. “We need to boost our base.”

Robbins had suggested that the town place a minimum period on rentals, allowing only longer-term rentals of single-family homes built in residential zoning districts. The city is looking into such a policy.

“That may very well be a solution,” Margotta said. “Our code right now is largely reactive, and what I hear people saying is that they want us to be more proactive.”

One element of the town’s code may already provide a hard counter to such rentals. Ocean City’s code does allow “home occupations,” such as tailors or music teachers, in R-1 districts – but explicitly excludes “tourist homes” from the home occupation definition, implying that the code originally intended to keep tourists out of that zoning designation.

If the city wished, it could argue that renting out one’s home constitutes a home occupation of running a tourist home, and is thus an illegal business. This would allow the town to bring the hammer down on such rentals before vacations even occupy the units – not only on the owners, but upon any realtors who are knowingly advertising such rentals and thus complicit in the illegal enterprise.

According to residents, many of the problems homes are ones which had been bought on foreclosure or short-sale by investors, who saw an opportunity to make their money back quickly by mass-renting a property bought below market rate.

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