I recently introduced a legislative package to regulate Airbnb in Montgomery County. Here is some basic information about the legislation that I hope answers some of the most frequently asked questions.
What does this legislation do?
This legislative package, Zoning Text Amendment 16-03 and Bill 2-16, works together to regulate short term rentals in Montgomery County. The Zoning Text Amendment would allow a Bed and Breakfast in residential and mixed-use zones under certain circumstances. The Bill would establish a process and standards for licensing all dwellings used as a Bed and Breakfast, modernize the licensing requirements for hotels, and delete code sections pertaining to other forms of short term rentals (hostels, tourist homes, tourist cabin parks, rooming houses, and boarding houses) that have already been disallowed in the zoning code. The legislation would apply to all short term rentals, including those arranged through sites like Airbnb and HomeAway. Renters on Airbnb and similar sites would be required to be a licensed Bed & Breakfast in Montgomery County, and obey several new rules designed to protect visitors, neighbors, and hosts. This legislation follows legislation passed in 2015 that required short-term rentals to pay hotel/motel taxes (the current rate is 7%).
Aren’t short-term rentals already legal?
No, rentals for less than 30 days are illegal under current law unless they are licensed as a hotel or a Bed & Breakfast. However, this prohibition is weakly enforced, and there are hundreds of Montgomery County listings on sites like Airbnb and HomeAway.
Does the legislation protect existing residential communities?
The legislation includes three major protections to ensure that Airbnb does not change the character of existing residential communities:
- All hosts will be required to get a license (through an online process) and to certify that the units they rent meet all safety, parking and other requirements in County Code. This means the County will know where these rentals are occurring, can inspect the rentals as needed, and can close down rentals that are not properly licensed.
- All units that are rented must be the primary residence of the host. This means that investors cannot use multiple homes for short-term rentals (unlike long-term rentals, where this is allowed). It means that legal rentals will have an owner who lives at that address and is responsible for the property and relationships with neighbors.
- The number of renters allowed in a rental unit is limited to the same number allowed in any residential property – no more than five unrelated persons or a family of any size. This rule prevents any homeowner from legally turning their basement into a hostel. The parking allowances will not be greater than any other household would be allowed.
These properties also will continue to be subject to county laws that protect neighborhoods: housing and building code rules governing the safety and appearance of homes in the County, the County’s Noise Ordinance restricting noise levels, all parking restrictions, zoning rules governing the allowed uses in different zones, and many other legal protections.
Rather than stretching county enforcement resources thin attempting to shut down all short term rentals, this framework will allow the county to focus on problem actors who may violate quality of life laws, whether they are short term renters, long term renters, or homeowners.
Won’t this increase housing prices in the County by diverting housing supply to short-term rentals?
This has certainly been an issue in other areas with very tight housing markets and high levels of tourism like New York and San Francisco. The requirement that the housing unit be the principal residence of the host will prevent investors (or anyone) from being able to legally turn a unit into a full-time Airbnb rental and should therefore minimize the impact on housing supply and prices.
Will these units have to pay the same taxes as hotels?
Yes. Last year, the Council approved legislation requiring all short-term rentals to pay the County’s hotel/motel tax. Both the County and the State of Maryland are currently working to develop an arrangement with Airbnb and similar sites to have the listing company collect the tax from the host and remit it directly to the appropriate jurisdiction. Airbnb already does this in other jurisdictions. The County has also begun seeking the tax directly from hosts. This process will be aided by a licensing requirement which will require certification that all taxes have been paid.
What is the process for approving these changes? How can I express my views?
There will be a public hearing on the legislation at 7:30pm on March 8 at the Council offices in Rockville. Learn more and sign up to speak here. You can also provide written comments for the record at any time by emailing email@example.com. After the March 8th Public Hearing, the legislation will be heard by the Planning, Housing, and Economic Development Committee, which will make a recommendation to the full County Council.
Please feel free to contact my office at any time with questions or comments at Councilmember.Riemer@montgomerycountymd.gov.
What about existing Bed & Breakfasts?
There have been six Bed & Breakfasts approved under the old rules in Montgomery County. All but one have had those approvals revoked by the Board of Appeals because the owner abandoned the use. Any other Bed & Breakfasts currently operating in the County are evidently operating without a license and would be required to operate under the same rules as other short-term rentals in the proposed legislation.
Are there any additional parking requirements?
The legislation does not impose any additional parking requirements over those that apply to residential property generally, but it does limit the number of occupants allowed at any time to the size of 1 household (5 unrelated individuals or a family of any size) and the unit must meet the existing parking requirements for their zone.
What about Homeowners/Condo Association Rules or Rental Agreements?
This legislation does not supersede other legal restrictions on the use of property. Rental agreements, homeowners association covenants, or condominium agreements may preclude a tenant or property owner from using their housing unit for any rental purpose. If these restrictions on property rental are violated, it is the responsibility of the landlord, homeowner’s association or condominium association to enforce their restrictions.
Why is there so much about hotels in the Bill?
On the advice of the Council’s land use attorney, we took the opportunity to do some technical clean up to the hotel section of the County Code. This code had not been amended in decades. These changes are largely stylistic and have no bearing on the Airbnb issue. Hotels and Bed & Breakfasts (i.e. short-term rentals) remain separate legal categories with very different requirements for licensing, inspections, etc.
Why not just leave the zoning law in place that makes them illegal?
Although short term rentals are not legal, there are already hundreds of listings on these websites in our county. Our resources are limited, and enforcing a complete prohibition is not realistic. In addition, most or nearly all of these listings are posted by residents who have a reasonable and responsible use in mind. Allowing responsible rentals allows the County to focus our enforcement resources on listings that are truly disruptive to the community. There are also many ways in which responsible short term rentals can augment the County’s stock of hotel rooms to provide benefit to the community, including providing short term stays for business travelers and tourists; family and friends of medical patients at facilities like NIH; families temporarily displaced from their permanent residence by fire, flooding, or renovations; and others looking for a more “homey” experience. Not to mention, the opportunity for homeowners who have extra space to make additional income – including seniors and empty nesters. This application of internet technology is here to stay, and the best course for county government is to adapt to that reality.