Ocean City Cites Safety Concerns In Action On Short-Term Rentals

OCEAN CITY, NJ — A recent trend that has emerged in the tourism industry nationally is that of “short-term rentals.” In these renting situations, owners rent out parts of their property online. Some in the industry are concerned about possible unsafe living conditions renters may be exposed to, and Ocean City is taking a step to tackle the issue early on.

Anyone renting out a property with four or more units needs certification from the state. Certifications bring with them certain fees and taxes. As a way to get around paying these fees while making a quick buck, some people have begun to rent out portions of their property, using sites such as Airbnb, VRBO, HomeAway and other online entities. They’re able to make money off renting their properties while not paying taxes hotels and motels are subjected to.

“Anyone can go online and register a room or apartment privately without following codes or laws,” said Ocean City Councilwoman Karen Bergman, who serves as Catering Director for the Flanders Hotel. “No one is checking these properties out." If someone rents a space based on what they see online, it might not be what they were looking at when they see it in person. That could leave a bad taste in their mouth about Ocean City.”

These set ups can be viewed as a way seniors and potential travelers who are strapped for cash can take a trip without spending too much on amenities. But without the proper inspections, some fear an easily avoided situation could turn into a catastrophe.

Potential renters can read reviews left by those who have already rented. As part of its policy, owners can’t delete reviews once they are posted, but they can respond.

In Ocean City, there are over 300 rentals listed on the Aribnb website, many receiving four or five stars. Prices go as low as $49. The renters are exempt from the state hotel tax, which was recently reduced from 7 percent to 6.875 percent.

The city acknowledges there hasn’t been a problem yet, but it is trying to get out ahead of the problem out of a concern for safety. There have also been no high profile cases of tragedy involving short-term rentals.

The proposed ordinance passed by Ocean City Council on first reading last week calls for homeowners who are looking to rent out even part of their property to have a mercantile license. It’s an amendment to an existing ordinance that covers residents looking to rent out their entire property.

Home will also be required to have a smoke detector/carbon monoxide detector inspection. The fee for the license is $30, plus a $145 Ocean City Tourism Commission fee.

The public hearing and final vote on this proposal takes place at the June 22 meeting. Officials have said they can’t prevent the renting out of partial units at the municipal level. That would be left up to the state.

The city also can’t put a cap on the number of people that a renter can rent out to, but a hotel can.

“So you can rent your living room out to 30 people?” Ocean City Councilman Keith Hartzell asked.

“As long as they’re not causing a disturbance,” Ocean City Solicitor Dorothy McCrosson replied.
McCrosson said the law hasn’t caught up with this yet, but Ocean City is keeping an eye on how other shore towns and some bigger cities are dealing with the issue.

Two Democratic assemblywomen have proposed separate state laws in an effort to deal with the issue.

Annette Quijano (D-20) has proposed a law that would apply state sales-and-use tax and the hotel and motel occupancy fee to these rental sites. Airbnb would collect the taxes and remit them to the state, and supports this proposal, according to philly.com. Valerie Huttle’s (D-37) proposal seeks a ban on short-term rentals altogether.

In North Jersey, at least 10 municipalities are already looking at tighter restrictions on short-term rentals, according to northjersey.com.

The states of New York, Massachusetts, Virginia, Utah, Idaho and Minnesota are also among those that have already taken steps to regulate the industry.

Patch file photo