PHED Committee #2 & 3
September 18, 2017
MEMO RANDU M
September 14, 2017
TO:
FROM:
SUBJECT :
Planning, H u1ng, and Economic Development Committee
1
Jeff ZyontU. nior Legislative Analyst
Zoning Text Amendme nt 17-03, Accessory Residential Uses - Short-term Rental; and
Bill 2-16, Transient Housing - Licensing and Registration
Background
Current code
Under the current code, the residential occupancy of a dwelling by a household is only allowed on a
monthly or longer basis.
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Shorter term residential living is prohibited. In 2015, the Council amended tax
provisions to include any type of dwelling unit within the scope of hotel (transient lodging) taxes.
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The
result is the collection of transient lodging taxes from illegal uses.
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All transient lodging facilities are required to be licensed by the Department of Health and Human Services
(HHS).
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The code treats all hostels, rooming houses, boardinghouses, and tourist homes the same as it
does hotels. To date, only hotels and the Center for Leadership Excellence have applied for and received
transient housing licenses.
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No licenses have been issued for short-term residential rental use.
The Department of Permitting Services (DPS) has received few complaints concerning short-term
residential rentals. There are no ongoing enforcement actions by DPS. DPS refers complaints to HHS.
HHS stopped one owner from renting short-term by court order and has not fined any owner for the short-
term rental use of residential property.
Section 59.3.3. I.A. This is a typical restriction in zoning. A bed and breakfast and hotel are generally allowed under separate
provisions. ZTA 17-03 would create a new short-term residential rental use.
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Bill 14-15, amending Section 52-16(b ). Taxes are being collected under an agreement with on-line host platform companies.
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Average taxes collected from Airbnb has been $34,000 per month with an upward trend over the past 11 months. In May,
$48,631 was remitted. Taxing illegal income is well established. Al Capone went to jail for tax evasion for not reporting
illegal income. Even embezzled funds are subject to reporting and taxes (see, James v. United States, 366 U.S. 213 (1961).
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Chapter 54.
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Under section 54-17, licensed property must have a use and occupancy permit issued by DPS. Under Section 8-28, the
Department must issue such a permit IF (among other requirements) there is no violation of law. As transient lodging in a
single dwelling unit is not allowed by zoning, the Department may not issue a use and occupancy permit, thus making it
impossible to get licenses for transient housing outside of allowed hotels and bed and breakfast uses.
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ZTA History
Zoning Text Amendment (ZTA) 16-03, Land Use - Bed and Breakfast was introduced on
February 2, 2016.
It
would have amended the definition of a Bed and Breakfast and allow a Bed and
Breakfast as a limited use in all residential and mixed-use (Commercial/Residential) zones.
Councilmember Riemer was the lead sponsor of ZTA 16-03. On March 22, after a public hearing, the
sponsor and the Chair of the Planning, Housing, and Economic Development Committee asked the
Planning Board to reconsider the ZTA and allow for more public outreach. On May 11, 2017, the Planning
Board approved revised recommendations to ZTA 16-03. Because the recommendations were
significantly different from ZTA 16-03, Staff recommended a new ZTA (ZTA 17-03) to achieve the
Planning Board's recommendations. In addition, many of the Board's recommendations more clearly fell
under licensing requirements. To that end, Staff recommended revisions to Bill 2-16 to incorporated some
of the Planning Board's recommendations.
Public Hearing
On September 12, 2017, the Council conducted a public hearing. The positive tenor and tone of the public
hearing is a credit to the Planning Department's work on this issue. Most testimony favored the Planning
Board's proposed approach, with some relatively minor amendments. Suggested amendments are
included as issues for the Committee.
Hosts and potential hosts want to take advantage of the sharing economy without harsh restrictions. In
their opinion, short-term residential rentals can help make mortgage payments and property taxes
affordable. Hosts cited positive social interaction with their guests. One speaker asked for the ability to
have short-term rentals without constraints.
Home Owners Associations (HOAs) want greater assurances that their rules apply.
If
an association bars
rentals, then no license should be issued to allow the use. In addition, they request a provision to bar a
license if HOA dues are in arrears.
Hotel owners do not want short-term residential rentals to have a competitive advantage. The hotel
industry supported the proposed ZTA as offering a more even regulatory playing field. Hotels are
currently subject to taxes, licensing, and inspections. Hotels would favor an additional requirement that
any advertisement for a short-term residential rental include the owner's state and local license number.
The most critical testimony came from people and civic organizations who thought that the current illegal
status of short-term rentals was satisfactory. The testimony stated a concern that short-term residential
rentals will:
create nuisances (noise, traffic, underage drinking, litter, public urination, drugs, and other illegal
activities);
bring an influx of strangers to the neighborhood on a regular basis;
be unsafe because they do not meet fire and safety standards;
destabilize and disrupt communities by driving out long-term residents;
reduce the availability of affordable housing;
be an enforcement problem;
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turn into party houses;
create parking problems; and
be overconcentrated in unincorporated areas of the County.
Issues
Zoning
ZTA 17-03 would establish the following limitations on short-term residential rentals:
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Allowed only on sites without either a farm tenant dwelling or an accessory apartment
Allowed only if the site is the primary resident of the applicant
Maximum rentals in a calendar year 90 days, counting only when the applicant is absent
The total number of adult overnight guests is limited to six
The total number of adult overnight guests per bedroom is limited to two
Unless the online listing indicates that vehicle parking is prohibited, one off-street parking space
must be provided for each rental contract.
Why should the zoning code be changed at all?
By its enactment of Bill 14-15, the Council agreed with the County Executive's recommendation to tax
short-term residential rentals.
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Although licensing is required by the code, such licenses may not be issued
due to their illegal zoning status. The conflict between the licensing requirement and the zoning code
should be resolved.
There are certainly reasons to make the use legal. There are on the order of 1,400 dwelling units in the
County being offered and rented on-line. Short-term rentals offer an economic return for property owners.
Between April of 2010 and July 2017, the County has only received 30 complaint calls that described the
problem as transient housing.
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Tax collections for short-term rentals are averaging around $35,000 a month.
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Licenses cannot be issued.
There is no easy way to know who is undertaking this activity. The agreement between the County and
Airbnb for the payment of taxes
does not
allow for an audit trail.
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Enforced licensing will at least allow
the County to track the level of short-term rental interest, if not the activity. Licensing would also require
the licensee hold to maintain activity records.
What problems can be avoided?
In some cities, apartment buildings have been purchased for the purpose of renting out every unit as a
short-term rental. The result was a de facto hotel and the loss oflong-term living options for households.
In suburban areas, it has been reported that some single-family dwellings have been purchased by investors
Any dwelling unit that offers, for compensation sleeping accommodations in the County was made subject to the hotel tax.
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A complaint for a specific reason such as noise or trash would only be counted as a short-term rental complaint if the
complainer indicated that the source of the problem was a short-term rental.
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It
is impossible to determine if all the taxes owed by short-term residential rentals are being collected.
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Testimony asserted that the County is the only jurisdiction in Maryland that has reached a payment agreement.
It
has been
said that the State has refused any similar type of agreement because it does not allow a means to audit remissions.
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for the same purpose. ZTA 17-03 as introduced requires that the dwelling unit used as a short-term rental
must be the applicant's primary residence, regardless of dwelling unit type. (See lines 36-37.) This
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limit the number of units any individual may use for short-term rentals to one.
provision would
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Residents want the opportunity to know their neighbors. This is next to impossible when their neighbors
change every day. The Planning Board recommends that if the primary resident is not present in the
residence, the property can be used as a short-term residential rental for a maximum of 90 days in a
calendar year. (See lines 38-40.) This reduces, but does not eliminate, the concern. The Planning Board
did not recommend limiting the duration of rentals when the primary resident is present in the dwelling.
(See lines 40-4 3.)
Some testimony suggested that 90 days of rental with an absent owner was too long. The Greater
Colesville Civic Association recommended a 45-day limit. The proposed 90-day requirement is the same
duration as San Francisco.
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The City of New Orleans allows a maximum of 90 days of short-term rental
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without regard to the presence of an owner. The cities of Boulder, CO and Austin, TX have no limit.
Washington, D.C. is considering a 15-day limit.
The issue is a balancing act between neighbors' rights of cohesion and private property rights.
Is the provisio n for on-site supervision adequate?
As introduced, ZTA 17-03 includes the following provision:
If
the applicant is not present in the residence, the property can be used as a Short-Term Residential
Rental for a maximum of 90 days in a calendar year.
If
the applicant is present in the residence
during the rental stay, there is no limitation on the number of days the property can be used as a
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Short-Term Residential Rental.
Testimony suggested clarifying this provision to state that "the property owner or an owner-authorized
resident of the property must be physically present and occupy the property during the short-term stay"
instead of using the term "applicant" and "present".
Staff agrees with this clarification.
Are too many people allowed in a short-term rental?
Under ZTA 17-03 as introduced, the maximum number of occupants is limited by housing code health
standards; however, the total number of overnight guests in the short-term residential rental who are 18
years or older is limited to 6, and the total number of overnight guests over 18 years of age per bedroom
is limited to 2. Under this provision, a 3-bedroom house could have 6 adults.
rentals, but that
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The Apartmen t and Office Building Association did ask for the ability oflandlor ds to profit from short-term
would run counter to the restrictions recommended by the Planning Board.
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The neighbors whom residents may or may not know are the folk who want to use their property for short-term residential
rentals. "The Bible tells us to love our neighbors, and also to love our enemies; probably because generally they are the same
people." G.K. Chesterton.
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http://sfist.com/2016/l 1/16/sf supes approve 60-day cap on rent.php
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https://www.nola.gov/short-term-rentals/str-zoning-restrictions/
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https://bouldercolorado.gov/plan-develop/short-term-rentals,
https://www.austintexas.gov/sites/default/files/files/Code Compliance/STRs/Revised Ordinance.pdf
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Lines 38-43.
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This is different from the definition of a household in the current code, where there is a numeric limit for
the number of unrelated individuals in a dwelling unit:
Household: A person living alone, or any one of the following groups living together as a single
housekeeping unit and sharing common living, sleeping, cooking, and eating facilities:
any number of people related by blood, marriage, adoption, or guardianship;
1.
up to 5 unrelated people; or
2.
2 unrelated people and any children, parents, siblings, or other persons related to either of
3.
them by blood, adoption, or guardianship.
Household does not include any society, club, fraternity, sorority, association, lodge, federation,
or like organization; any group of individuals whose association is seasonal in nature; or any group
of individuals who are in a group living arrangement as a result of criminal offenses.
If the definition of household were to be applicable to short-term residential rental property, any household
with 6 members must be related.
Does the ZTA adequately address on-site parking?
As introduced, ZTA 17-03 would require one off-street parking space for each rental contract
unless
the
online listing indicates that vehicle parking is prohibited. This provision does not require any off-site
parking spaces if the landlord indicates that parking is prohibited. This is not likely to reduce parking
demand.
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Zoning has different on-site parking req:uirements, ranging from zero to 2 spaces per dwelling
unit. Having one off-street parking space may not meet minimum zoning requirements, depending upon
when the unit was constructed.
The Planning Board proposal will not prevent parking problems. The Council may wish to limit licenses
to locations that provide off-street parking. The Council also could vary the parking required based on
transit availability, as suggested in testimony.
Should ZTA 17-03 be amended to allow a bed and breakfast for more than 5 guest rooms and allow for
additional meal service under certain circumstances?
ZTA 17-03 was described in the public hearing advertisement as:
An amendment to the Montgomery County Zoning Ordinance to:
modify the definition of "Household Living";
define "Short-Term Residential Rental";
establish limited use standards for short-term residential rental; and
generally amend provisions allowing for short-term residential rentals.
It created a new use (short-term rentals). Its only connection to a bed and breakfast was to exclude the
newly created use from a bed and breakfast. Staff believes that the requested amendment is beyond the
scope of the ZTA's advertisement.
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"The more things are forbidden, the more popular they become." Mark Twain
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Licensing
Bill 2-16
Bill 2-16, as introduced, would revise Chapter 54 of the County Code. The revisions would update the
provisions for hotels, delete forms of transient housing no longer allowed by the Zoning Code
(Chapter 59), establish a less burdensome method oflicensing for Bed and Breakfast and short-term rental
establishments, and assign responsibilities for licensing between Executive departments.
This Bill anticipates the approval ofZTA 17-03 which will make Bed and Breakfast a limited use in most
residential and mixed-use zones.
Short-term residential licensing in the attached draft ofBill 2-16 would require:
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Compliance with Zoning
Maximum occupancy consistent with zoning
Limiting rentals to habitable rooms
A carbon dioxide detector for units with natural gas
No code violations in the past year (for new licenses)
Operating sanitation facilities
Paid taxes
Site of the rental is the primary residence of the applicant
The applicant is the owner or is authorized by the owner to apply
Posted rules and posted contact information for a designated representative
A record of guests
Notice to neighbors of the application request
Certification that the rental is allowed by the HOA, or condominium restrictions if applicable
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Licenses issued for a one-year term
The underlined requirements were added to the draft as introduced, at the recommendation of the Planning
Board.
What is the fiscal impact of Bill 2-16?
The Executive estimates that the licensing program envisioned under Bill 2-16 would require total
expenditures of $213,947 in FY18 and $211,094 every year thereafter. The Bill calls for on-line filing
and self-certification. The first-year operating cost for Information Technology is estimated at $157,500
in FY18 and $102,500 every year after FY18.
There would be revenues from licensing fees available to offset expenditures. The Executive assumed an
annual fee of $100 per license. At that fee, and with 100% compliance, total annual revenue would be
$140,000 per year. On an annual basis, the Executive would anticipate a net cost ofBill 2-16 of $71,094
($211,094 minus $140,000).
Staff believes that this expenditure estimate is based on traditional complaint-based enforcement.
Executive
staff
from HHS will be available at the worksession to describe their needs.
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Who should enforce short-term residential licensing?
The Planning Board suggested that the Council consider having one agency responsible for both short-
term and long-term rentals. The current code splits that responsibility between HHS (transient/short-term
rentals) and DHCA (long-term rentals). The Apartment and Office Building Association recommended
enforcement by DHCA; the Department already has subpoena power.
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The current code requires the licensing of all transient rental units; however, the focus of HHS in this area
has been on hotels. DHCA licenses long-term residential rental and administers approval of accessory
dwelling units.
Staff asked Executive staff about changing the jurisdiction of non-hotel transient housing to DHCA, but
Executive staff continues to believe that HHS is the more appropriate administrator. This will result in
two agencies issuing rental licenses of various types. In Staffs opinion, the issues concerning short-term
rentals are more like the issues surrounding accessory dwelling units than hotels.
Staff, if asked, would
recommend assigning DHCA this responsibility.
Should there be proactive enforcement of licensing requirements?
There are many activities in the County that go unnoticed. Short-term residential rentals are different in
that listings are posted (without street addresses) on relatively few on-line web platforms. There are third
party resources who, for a fee, would match valid licenses against on-line posting. The purpose would be
to assure compliance with the requirement to obtain a license.
Enforcement, or lack thereof, is critical if the County wants any regulatory control of short-term rentals.
Generally, enforcement issues are left to the Executive. In this instance, the Committee may want to have
a conversation about a proactive approach.
Should on-site inspections be required before licensing?
As proposed, licensing would be issued based on an on-line self-certification process. As proposed, it
would be easy, efficient, and inexpensive. Some testimony suggested that public safety inspections are
warranted before the issuance of a license. Such inspections are being considered in the District of
Columbia.
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Inspections would involve time and expense.
It
would likely lead to fewer licenses, but not fewer short-
term rental units.
The Apartment and Office Building Association suggested County verification of elements certified in the
application. This too is inconsistent with an easy, efficient, and inexpensive process.
Are the noticing requirements sufficient?
As proposed, neighbors must be given notice of a short-term residential license application. Testimony
suggested that notice also be given to any non-applicant owner (which could be a landlord), HOAs,
Montgomery Code §29-6( e).
http://www.nbcwashington.com/news/local/Should-Every-Airbnb-U nit-Be-lnspected-DC-B ill-Would-Require-It-
431620733 .html
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condominium associations, and municipalities.
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Testimony also suggests that the content of a notice
include the emergenc y contact information.
Testimony indicated that the outcome of the licensing process should be noticed and include challenges
and renewals to a license.
At some point, the burdens of noticing are greater than the benefits. This is a balancing act for the Council.
Certainly, the regulating Departme nt could post maps and contact informatio n oflicensee s and their status.
Would the requirement for action on a license or a license renewal within 15 days result in the issuance
ofa license
if
the time limit is not met?
The intent for the time limit was to provoke action.
It
was not to imply that an application was approved
unless disapprov ed within that time period. If the Council wants a process of approval unless disapproved,
it should state that intent.
Should the provision for compliance with HOA or condominium restrictions be revised?
Under the proposed licensing requirements, the applicant must certify that:
the applicatio n is permitted by any Home Owner's Associatio n or condominium document, or a
rental lease ...
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Testimony suggested revising this provision to read: "the use [proposed] is not prohibited by any Home
Owner's Associatio n or condomin ium document or a rental lease including an occupancy agreemen t of a
housing co-operati ve."
The general rule for legislative drafting is to express ideas in the positive form.
It
is the general rule of
the English language to avoid double negatives. Is something that is "not prohibited", allowed? The
answer is yes ... but is it easier to directly find a prohibition.
Staff agrees with changing "is permitted"
to "is not prohibited".
The Apartmen t and Office Building Associatio n would have the license applicant attach the applicable
language to the application. This request seems extreme.
The Associatio n would further want a new provision that the license does not supersede any contracts
among individuals. This seems redundant to the provision that would not allow a license if it is prohibited
by such contracts.
Should there be a requirement for current HOA dues paid?
Licensed rental housing, excluding transient housing, is subject to licensing under Chapter 29 of the Code.
Those licensing provisions prohibit the issuance of a license for a dwelling unit in a common ownership
Testimony suggested adding that notice be sent to "the representative of the common ownership community designated in
the annual registration filed with the Montgomery County Commission on Common Ownership Communities pursuant to
Montgomery County Code, Section 10B-7(a)". Staff does not believe that this is necessary in code and can be addressed in
guidelines or regulations.
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Line 471-472.
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community unless the owner certifies that the common ownership community fees for the dwelling unit
are no more than 30 days past due.
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Common ownership communities request an identical provision for any short-term rental license.
Staff
agrees with this change to be consistent with the long-term rental license provision.
Should a licensee be required to post their license number and the state license number of their on-line
listing?
Enforcement will be easier if there is a requirement to post the County license number with the on-line
listing. Testimony also suggested requiring the host's State Vender Identification number on any on-line
listing.
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This requirement was not included in Bill 2-16 as proposed.
Staff recommends this additional
requirement.
Are the challenges to an existing or proposed license adequate?
There is an intent to allow challenges to both bed and breakfast and short-term residential rentals. As
drafted, challenges to licenses may be limited to bed and breakfast establishments.
Staff recommends
deleting the words "bed and breakfast" in lines 493 and 495 and replacing with the word "license".
Municipalities, condominium associations, and housing cooperatives may want the opportunity to
challenge a license of a license renewal. That provision is not currently allowed in the draft Bill.
Staff
recommends including these entities in the list of parties that file a challenge (line 495).
Should the County require short-term residential rental platforms to do anything through legislation?
Testimony requested the County to require any on-line rental platform to provide a monthly listing of
units and to remove unlicensed units. Other testimony requested that on-line platforms give notice to
property managers regarding rentals at their property. The Apartment and Office Building Association
requested that platforms be required to provide a landlord with information on upcoming trip activity and
a summary year-to-date of activity at the property.
The ZTA and the Bill put requirements on the party with local property connections.
Staff views this
issue as being beyond the scope of what is before the Council.
Are the provisions for the suspension ofa license adequate?
As proposed, Bill 2-16 includes the following provision:
The license must be suspended for any applicant receiving at least three verified complaints within
a calendar year.
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Staff intended that verified complaint mean any action found to be a violation of the license or any other
aspect of County code. Noise and trash violations would be within the intended scope of a verified
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Sec. 29-19. Licensing procedures.
The state has a 6% sales tax.
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Lines 505-506.
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complaint. Testimony suggested that a single verified complaint should warrant the suspension of a
license.
The provision used the term "within a calendar year". Testimony suggested that it would be better to say
within any 12-month period.
The Community Association Institute requested a provision to immediately suspend a license if the
governing body of a common ownership community submits proof of unpaid common ownership fees.
Staff believes that this situation may be efficiently handled by challenging at renewal. The proposed
provision states that each license "must be issued for a term of one year, renewable for additional one-
year terms, subject to payment of the license fee and compliance with all applicable laws".
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Staff
recommends adding a requirement that renewals comply with certification requirements.
(The
Council may include or exclude noticing requirements in adding this provision.)
Can municipalities opt out of the proposed regulatory scheme?
Except for Brookeville, Poolesville, Laytonsville, Rockville, Barnesville, Gaithersburg, and Washington
Grove, all municipalities are subject to the County's zoning code. The Town of Somerset has requested
an exemption for and change to the illegal status of short-term residential rental. Staff knows of no
municipal exemptions in the current code.
Chapter 54 of the code is different from zoning. Municipalities may opt out by their own action. The
towns of Chevy Chase View, Chevy Chase, Gaithersburg, Garrett Park, Glen Echo, Laytonsville,
Poolesville, Rockville, Somerset, and Washington Grove are NOT subject to the provisions of Chapter
54.
This Packet Contains
ZTA 17-03
Bill 2-16 revised per Planning Board recommendations
Planning Board recommendation to Council
Planning Staff recommendation to the Planning Board
Fiscal and Economic Impact Statements
©number
1- 7
8-29
30-31
32-34
34-42
F:\Land Use\ZTAS\JZYONTZ\2017 ZTAs\17-03 Accessory Residential Uses - Short-term rental\ZTA 17-03 PHED memo September 18.docx
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Zoning Text Amendment No.: 17-03
Concerning: Accessory Residential
Uses - Short-Term Rental
Draft No. & Date:
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6/1/17
Introduced: June 13, 2017
Public Hearing:
Adopted:
Effective:
Ordinance No.:
COUNT Y COUNCIL FOR MONTGOMERY COUNTY, MARYLAND
SITTING AS THE DISTRICT COUNCIL FOR THAT PORTION OF
THE MARYLAND-WASHINGTON REGIONAL DISTRICT WITHIN
MONT GOME RY COUNTY, MARYLAND
Lead Sponsor: Council President at the request of the Planning Board
AN AMEN DMEN T
to the Montgomery County Zoning Ordinance to:
modify the definition of "Household Living";
define "Short-Term Residential Rental";
establish limited use standards for short-term residential rental; and
generally amend provisions allowing for short-term residential rentals
By amending the following sections of the Montgomery County Zoning Ordinance,
Chapter 59 of the Montgomery County Code:
DIVISI ON 59.1.4.
Section 59.1.4.2.
DIVISI ON 59-3.1.
Section 59-3.1.6.
DIVISI ON 59.3.3.
Section 59.3.3.3.
DIVISI ON 59-3.5.
Section 59-3.5.6.
DIVISI ON 8.2.
Section 8.2.3.
DIVISI ON 8.3.
Section 8.3.2.
"Defined Terms"
"Specific Terms and Phrases Defined"
"Use Table"
"Use Table"
"Residential Uses
"Accessory Residential Uses"
"Commercial Uses"
"Lodging"
"Residential Floating Zones"
"Use Table for the RT and R-H Zones"
"Planned Unit Development Zones"
"PD Zone"
And adding the following section:
Section 3.3.3.I.
"Short-Term Residential Rental"
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EXPLANATION: Boldface
indicates a Heading or a defined term.
Underlining indicates text that is added to existing law by the origi,nal text
amendment.
[Single boldface brackets] indicate text that is deleted.from existing law by
origi,nal text amendment.
Double underlining indicates text that is added to the text amendmen t by
amendment.
[[Double boldface bracketsJ] indicate text that is deleted.from the text
amendmen t by amendment.
* * *
indicates existing law unaffected by the text amendment.
ORDINANCE
The County Council for Montgomery County, Maryland, sitting as the District Council for
that portion ofthe Maryland-Washington Regional District in Montgomery County, Maryland,
approves the following ordinance:
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Zoning Text Amendment No.: 17-03
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Sec. 1. DIVISION 59.1.4 is amended as follows:
Division 59 .1.4. Defined Terms
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Section 59.1.4.2. Specific Terms and Phrases Defined
In this Chapter, terms that are not specifically defined have their ordinary meaning.
The following words and phrases have the meanings indicated.
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Shooting Range (Outdoor):
See Section 3.5.10.J.1
Short-Term Residential Rental:
See Section 3.3.3.I
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Sec. 2. DIVISION 59-3.1 is amended as follows:
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Section 3.1.6. Use Table
The following Use Table identifies uses allowed in each zone. Uses may be
modified in Overlay zones under Division 4.9.
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Zoning Text Amendment No.: 17-03
Residential
Rural
Definitions
Ag
Residential
Residential Detached
RE- RE- R- R- R- R-
2C
1 200 90
60
40
Residential
Townhouse
Residential
Multi-Unit
R- R-
30 20
Commercial/
Residential
Employment
USE OR USE
GROUP
and
Standards
AR
R RC RNC RE-2
TLD TMD THD
R-10
CRN
CRT CR
GR NR
LSC EOF
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RESIDENTIAL
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ACCESSORY
***
3.3.3.
RESIDENTIAL USES
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*
Short-Term
Residential
Rental
3.3.3.1
1
1 1 1
1 1 1 1 1 1 1 1
1
1
1 1
1
1
1
1 1 1 1
1
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Sec. 3. DIVISIO N 59.3.3 is amended as follows:
DIVISIO N 59.3.3. Residen tial Uses
Section 3.3.1. Househo ld Living
A.
Defined , In General
Household Living means the residential occupancy of a dwelling unit by a
household [on a monthly or longer basis] for 30 consecutive days or longer.
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*
*
*
Short-T erm Residen tial Rental
1.
Defined
Section 59-3.3.3. Accesso ry Residen tial Uses
*
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I.
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Zoning Text Amendment No.: 17-03
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Short-Term Residential Rental means the residential occupancy of~
dwelling unit for
~
fee for less than 30 consecutive days. Short-Term
Residential Rental is not
~
Bed and Breakfast.
2.
Use Standards
Where Short-Term Residential Rental is allowed as
must satisfy the following standards:
a.
Short-Term Residential Rental is prohibited in
~
~
limited use, it
Farm Tenant
Dwelling or on
~
site that includes an Accessory Apartment.
b.
The dwelling unit used as
~
Short-Term Rental must be the
applicant's primary residence, regardless of dwelling unit~
c.
If
the applicant is not present in the residence, the property can
be used as
90 days in
~
Short-Term Residential Rental for
~
maximum of
~
calendar year.
If
the applicant is present in the
residence during the rental stay, there is no limitation on the
number of days the property can be used as
Residential Rental.
d.
e.
The use must be licensed under Chapter 54.
The maximum number of occupants is limited by Chapter 26,
Section~ however, the total number of overnight guests in the
Short-Term Residential Rental who are
.IB
years or older is
limited to six, and the total number of overnight guests over
.IB
years of age per bedroom is limited to two.
f.
One off-street parking space must be provided for each rental
contract unless the online listing indicates that vehicle parking
is prohibited.
~
Short-Term
*
* *
Sec. 4. DIVISION 59-3.5 is amended as follows:
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Zoning Text Amendment No.: 17-03
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Division 3.5. Commerci al Uses
*
A.
*
*
Defined, In General
Section 3.5.6. Lodging
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Lodging means a building,. dwelling unit, or~ portion of~ dwelling unit used
for the short-term overnight accommodation of paying guests.
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B.
Bed and Breakfast
1.
Defined
Bed and Breakfast means a detached house that is owner-occupied
with no more than 5 guest rooms for rent and customarily serves
breakfasts to guests. A Bed and Breakfast is not~ Short-Term
Residential Rental.
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*
*
*
Sec. 5. DIVISION 59-8.2 is amended as follows:
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Division 8.2. Residentia l Floating Zones
*
A.
B.
*
*
Section 3.1.1 through Section 3.1.4 apply to the Use Table in Section 8.2.3.
The following Use Table identifies uses allowed in each zone. Uses may be
modified in Overlay zones under Division 4.9.
Section 8.2.3. Use Table for the RT and R-H zones
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Zoning Text Amendment No.: 17-03
USE OR USE
GROUP
RESID ENTIA L
Access ory
Residential Uses
Short-T erm
Reside ntial
Rental
Definitions
RT-6.0
and Standards
RT-8.0
RT-10.0
RT-12.5
RT-15.0
R-H
* * *
* * *
3.3.3
* * *
3.3.3.I
L
L
L
L
L
L
* * *
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Sec. 6. DIVISION 59-83 is amended as follows:
Division 8.3. Planned Unit Development Zones
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*
*
1.
*
*
Uses
Residential Uses
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Section 8.3.2. PD Zone
*
B.
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*
*
*
c.
Short-Term Residential Rental is allowed as
~
limited use under
Section 3.3.3.I.
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*
*
*
Sec. 7. Effective date.
This ordinance becomes effective 20 days after the
date of Council adoption.
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This is a correct copy of Council action.
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Linda M. Lauer, Clerk of the Council
(i)
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Bill No.
2-16
Concerning: Transient
Housing
Licensing and registration
Revised: 6/6/17 Draft No. 6_ __
Introduced:
February 2, 2016
Expires:
August 2, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _N~o=n=e_ _ _ _ __
Ch. _ _ , Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Riemer
Co-Sponsor: Councilmember Rice
AN ACT
to:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
By amending
Montgomery County Code
Chapter 54, Transient Lodging Facilities
Sections 54-1, 54-2, 54-3, 54-4, 54-5, 54-6, 54-7, 54-8, 54-9, 54-10, 54-11, 54-12, 54-13, 54-
14, 54-15, 54-16, 54-17, 54-18, 54-19, 54-20, 54-21, 54-22, 54-23, 54-24, 54-25, 54-26, 54-
27, 54-28, 54-29, 54-30, 54-31, 54-32, 54-33, 54-34, 54-35, 54-36, 54-37, 54-38, 54-39, 54-
40, and 54-41
By adding:
Montgomery County Code
Chapter 54, Transient Lodging Facilities
Sections 54-22A, 54-42, 54-43, 54-44, 54-45, 54-46, 54-47, 54-48, and 54-49
Boldface
define a bed and breakfast and hotel establishment;
limit the transient housing allowed to a bed and breakfast and a hotel;
require only hotels to comply with most current licensing provisions for transient
housing;
revise the requirement for resident hotel management;
delete the requirement for annual hotel inspections;
add a requirement for hotel inspections upon complaint;
establish a licensing system for bed and breakfast establishments;
amend provisions to make them more precise, concise, and decisive; and
generally amend Chapter 54 of the County Code.
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deleted.from existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery Couno/Jaryland approves the following Act:
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BILL No. 2-16
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2
3
4
Sec.
I.
Sections 54-1, 54-2, 54-3, 54-4, 54-5, 54-6, 54-7, 54-8, 54-9, 54-10, 54-
11, 54-12, 54-13, 54-14, 54-15, 54-16, 54-17, 54-18, 54-19, 54-20, 54-21, 54-22, 54-
23, 54-24, 54-25, 54-26, 54-27, 54-28, 54-29, 54-30, 54-31, 54-32, 54-33, 54-34, 54-
35, 54-36, 54-37, 54-38, 54-39, 54-40, and 54-41 are amended as follows:
54-1. Definitio ns.
5
6
7
For the purposes of this Chapter, unless the language or context clearly
indicates that a different meaning is intended, the following words and phrases
have the following meanings:
Average lot grade
means the arithmetic average of the highest and lowest
elevations of the ground contiguous to the building.
Basemen t
[:That] means that portion of any building [which is] located below
grade [;provided, however, that] when at least one-half of the vertical height
extends above the average lot grade. [Average lot grade, for this purpose, shall
mean the arithmetic average of the highest and lowest elevations of the ground
contiguous to the house.]
[Boardinghouse:
A dwelling in which, for compensation, lodging, or lodging
and meals, are provided or offered to not more than 5 transient visitors.]
Bed and Breakfast
means~ [dwelling unit or part of~ dwelling that is available
to overnight guests for compensation. Overnight guests on any night must
satisfy the definition of one household. A guest must stay at
~
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9
1
o
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12
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14
15
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17
18
19
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22
Bed and
Breakfast for no more than 30 days in any one visit. Meals may be provided
to overnight guests. Bed and Breakfast means ~] detached house that is
owner-occupied with no more than 5 guest rooms for rent and customarily
serves breakfasts to guests and allowed under Section 59-3.5.6.B of this Code.
Cellar
[:That] means that portion of any building which is located below grade
and whose vertical height extends less than one-half above the average lot
grade.
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Director [and Department:
The term "Director"] means the Director of the
Department of Health and Human Services, or the Director's designee[, and
the term "Department" means the Department of Health and Human Services].
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Department
means the Department of Health and Human Services.
Establishment
[:Every
hostel, tourist home, boardinghouse, rooming house
and guestrooms in an apartment hotel which, for compensation, provides or
offers lodging or lodging and meals to transient visitors.] means~ hotel or Bed
and Breakfast or Short-term Residential Rental regulated under this chapter.
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Fire Code
[:The] means the Fire Prevention Code [set forth] in Chapter 22 [of
this Code, and any amendments thereto] as amended.
Habitable room
[:Any] means~ room in which people normally congregate
or sleep with
~
minimum ceiling height of
1
feet. [This shall not include
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41
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44
bathrooms,] Bathrooms, closets, porches, decks, toilet rooms, storage rooms,
kitchens~ [or] and pantries are not habitable rooms.
[Hostel] Hotel
[:Any] means~ building or portion [thereof or any group of
buildings] of
~
building where, for compensation, lodging or lodging and
meals are provided or offered to 3 or more transient visitors [, including hotels,
motels, tourist courts, motor courts, tourist camps and similar establishments
such as apartment hotels]. Hotel includes~ motel, but not~ bed and breakfast.
45
46
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48
Household
means~ person living alone, or any one of the following groups
living together as
~
single housekeeping unit and sharing common living,
49
sleeping, cooking, and eating facilities:
1.
50
any number of people related by blood, marriage, adoption, or
·guardianship;
!ill
to
~
unrelated people; or
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52
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54
55
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3.
~
unrelated people and any children, parents, siblings, or other
persons related to either of them
by
blood, adoption, or
guardianship.
[Liquid wastes:
Human excreta, bath water, wash water, laundry wastes,
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59
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61
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dishwater and any other liquid wastes resulting from cleaning operations.
Gasoline and explosive or inflammable liquids are not included.]
Lodging
[:The] means the short-term overnight accommodation of
fl.
paying
guest.
Plumbin g Code
[:The] means the Plumbing Code [in effect within the
jurisdiction of] adopted
by
the Washington Suburban Sanitary Commission,
[
and
any other jurisdictions in the County having or subsequently adopting a
Plumbing Code, and any changes or revisions thereof] as amended.
[Rooming house:
In a residential zone, shall mean a dwelling in which, for
compensation, lodging is provided or offered to 3 or more but not exceeding
9 guests.]
Short-Term Residential Rental
means the residential occupancy of a dwelling
unit for a fee for less than 30 consecutive days as allowed under Section 59-
3.3.3.I of this Code.
Solid wastes
[:]
means garbage, trash, sweepings, animal refuse and dead
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animals.
[Tourist home:
A dwelling in which, for compensation, lodging or lodging
74
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and meals are provided or offered to not more than 12 transient visitors.]
Transient visitor
[:A] means
~
person who [obtains] purchases lodging.,_ [or
lodging and] with or without meals, [upon payment or promise of payment
therefor at the same premises] for a continuous period of [not more than] 6
months or less.
54-2. Authority of [county executive] Executive to regulate and license.
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CID
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The [county executive] Executive I,in order to impleme nt the health standards
and regulations of this chapter, is hereby authorized by law to] may adopt
[such] regulations, under method (3) [of section 2A-15 of this Code],
concerning the operation, maintenance [and].,_ conduct.,_ licensing, and license
fees for [of]~ [any of the types of establishments] hotel or bed and breakfast
[referred to in this chapter, including provision of such licenses and license
fees for such establishments as he may deem appropriate].
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54-3. Guest register - Required [to be kept by hotels, tourist homes, etc.;
information to be shown].
Any person who owns or operates a hotel, [rooming house, tourist home,
motel, or tourist cabin park] in the County must maintain on the premises a
permane nt register [in which must be inscribed in ink in legible writing]
containing:
(a) the name of each visitor;
(b) the residence address of each visitor, including state, city or town, street
and street number or rural mail delivery route number;
(
c) the number of the room or facility occupied by each visitor; and
(
d) the date and time of registration and checkou t of each visitor.
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[In tourist homes, motels, and tourist cabin parks the] The register must
include a record of the license plate numbers and state of registration of any
automobiles or trailers [in or with which the guests are traveling] that guests
are using. The owner or operator of the establishment must see that the license
plate and automobile or trailer registration information is correct. A person
must not occupy any room [or facility] until [after] the registration required
under this section is provided. The permanent register may be in a bound
book, looselea f book, or cards. If a looselea f book or cards are used, the pages
or cards must be numbered consecutively before use and all numbered pages
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or cards must be kept even though they are not used. The register [provided
for] required by this section must be kept for at least 3 years and must be open
to inspection upon the request of the Director or of any law enforcemen t
officer of the county or the state.
54-4. Same-Giving or permitting false information to be given prohibited.
[It
shall be unlawful for any] A person must not knowingly [to inscribe] write
any false or incorrect name or address or license plate number in any such
register. [It shall be unlawful for the] The owner, [or] manager.,_ or employee
of [any type of establishme nt or any employee thereof]
f!
hotel must not [to]
knowingly [to] permit any person to [inscribe] write any false name or address
or license plate number in any such register.
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7
118
Article
II. [Hostels, Rooming Houses, Boardingho uses and Tourist Homes]
Hotels.
54-5. Numbering of rooms.
Every [establishment shall] hotel must have a unique number on the corridor
side of the door to each guest room [and no two (2) doors shall bear the same
number].
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54-6. Limitation on admission of visitors.
[No establishment shall] A hotel must not admit more visitors than the number
for which it is licensed.
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54-7. Inspection of register by county officials.
Registers kept [in accordance with] under section 54-3 [shall] must always be
available at the [establishment] hotel for inspection by the [director] Director,
the fire marshal, the [county] police chief and [such other officials as may be
designated by the above named officials] their designees. The licensee may
request the official to present [Presentation of] proper credentials or proof of
identity [may be requested by the licensee).
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54-8. Owner, operator or manager to reside on premises.
The owner, operator, or a responsible manager appointed by the owner or
operator [shall reside on the premises of] must be on-site at all times at each
[establishment] hotel.
54-9. Parking facilities.
Every [establishment shall] hotel must provide off-street automobile parking
for visitors as [is set forth in the zoning ordinance] required by chapter 59 of
[the Montgomery County] this Code, as amended. [No license shall be issued
by the director unless he finds the required parking facilities have been
provided.]
54-10. Administration and enforcement of article generally.
The [director is hereby authorized and directed to] Director must administer
and enforce [the provisions of] this chapter with the assistance of other County
departments, as necessary. [All department heads in the county government
are hereby authorized and directed to provide such assistance as may be
required by the director for the purpose of enforcing this article.]
54-11. Right of entry of county officials.
[For the purpose of enforcing this article, the director] The Director, the fire
marshal, the [county] police chief and [such other officials as may be
designated by the above named county officials shall] their designee, upon
exhibiting the proper credentials or proof of identity, [have the right to] may
enter any [establishment for the purpose of making] hotel to make any
necessary inspection [they may deem necessary at any time] during business
or operating hours [, and at such]. Inspections may also occur at other times
[as] if the county officials find [may be necessary in the public interest] it
necessary to protect the health and safety of any person.
54-12. Responsibility for compliance with article.
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The owner or operator of [an establishment]
~
hotel, and [his] the hotel's agent
or manager, [shall be] are responsible for [conforming to the provisions of]
complying with this article.
54-13. Violation of article; penalties [and injunctive, etc., relief].
[Any person who violates] A violation of any provision of this article [shall
be] is [subject to punishment for] a class A violation [as set forth in section 1-
19 of chapter 1 of the County Code]. [Each day such violation shall continue
shall be deemed a separate offense.]
54-14. License required [Required].
[No] Any building [or premises shall be] occupied or used as a [hostel,
rooming house, boardinghouse or tourist home] hotel within the county
[unless a license shall have been issued] must be licensed for such occupancy
and use by the [director, nor shall any] Director. An operator of~ [such
building or premises be so occupied and used] hotel must cease operating
immediately after [such] the license has expired, or has been revoked or
suspended.
54-15. Application.
Before the Director issues an annual license for any [establishment shall be
issued by the director] hotel under this [division, an application shall be filed
by] Division, the owner or operator, or [his duly] their authorized agent, [in
accordance with] must file an application that satisfies the regulations
[prescribed] approved by the [county executive] Executive under method (3)
of section 2A-15 of this Code.
54-16. Compliance with Code, [etc., prior to] before issuance.
[No license shall be issued to] The Director must not issue~ license to any
[establishment] hotel [to] under this [division] Division unless [such] the
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proposed [establishment is in conformance] hotel conforms with the
applicable provisions of this Code [and other ordinances of the county].
54-17. Certificates to be filed [prior to] before issuance.
The Director must not issue an initial [annual] license or license renewal under
this Division unless the applicant files [the following certificates have been
filed] with the Department~ certificate:
(a)
[A certificate] of use and occupancy from the Department of Permitting
Services[.t
(b)
[A certificate] from the fire marshal stating that the building [is in
compliance with] complies with the fire prevention code[.]_;_ and
(
c)
[A certificate] from the Director stating that the building or buildings
and rooms to be occupied or used by the guests of the [establishment]
hotel, and the premises on which such buildings are located, [are in
compliance with] comply with the standards and regulations of the
County and State Boards of Health.
54-18. Separate license required for each establishment.
[Each individual establishment] The Director must reqmre each hotel,
[although] operated by the same management, [shall be required] to obtain a
separate license under this [division] Division.
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207
208
209
210
211
212
54-19. Fees.
The Executive must establish annual fees for licenses under this [division shall
be of such amount as may be established by the county executive] Division
by [written] regulation adopted under method (3) of section 2A-15 of this
Code!. [and shall] Fees must not exceed an amount necessary t~ defray the
costs of administering this [chapter] Chapter.
54-20. Denial where operator has been convicted of certain state law violations.
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The Director may deny an initial (or annual] license or license renewal to
operate (an establishment] a hotel under this Division if the Director finds the
owner or operator of the proposed [establishment has been] hotel was
convicted of violating the following provisions of the Criminal Law Article
of the Maryland Code:
(a) Section 10-202 (keeping disorderly house);
(b) Title 12 (gaming);
(
c) Title
5 (controlled dangerous substances, prescriptions, and other
substances); or
(d) Section 10-201 (disturbing the public peace and disorderly conduct).
The Director may deny an initial [or annual license] or license renewal
if the owner or operator [has been] was convicted of any similar offense
outside Maryland.
54-21. Procedure for issuance or denial.
(a) [Upon receipt of] When an application for (an annual] £ license under
this [division] Division, or [for renewal of a] when£ previously issued
license is in the renewal process, the [director shall make or cause to be
made] Director or the Director's designee must conduct all investigations
and inspections required by this article. The [director shall act upon]
Director must approve or deny the application within [ninety (90)] 90
days after the date of filing, or as soon thereafter as practicable. [In cases
in which an application] Applications for renewal of [an annual] £
license [has been] filed on or before October 1 [as provided in section]
under Section 54-25 and [has] that have not been [neither] approved or
[disapproved] denied by the [director prior to] Director before the
following January 1, [the current license shall remain] remain in [full
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force and] effect until approved or denied by the Director [[the]]
application [has been acted upon by the director].
(b) If, [upon the completion of] after all investigations and inspections are
completed, the [director] Director finds that the [establishment] hotel
for which a license under this [division] Division is requested does not
[comply with the provisions] satisfy the requirements of this chapter, [he
shall] the Director must, within [ten (10)] 10 days after making such a
finding, [cause to be served upon the applicant written] transmit notice
of such finding to the applicant [and shall in such]:. The notice must
advise the applicant of the necessary corrective measures to be taken
before [a license will be issued] the Director will issue the license. The
[
director] Director may [, in such notice,] direct the applicant to appear
[before him] within [ten (10)] 10 days from the date of service of the
notice to show cause why the license should not be denied.
If
the
applicant [shall fail] fails to show cause as directed in such notice, or
[shall fail] fails to take the necessary corrective action [specified
therein], the [director shall refuse to issue or renew such license] Director
may deny the application.
(c) [All] The Director must send all of the Director's orders and notices
[issued by the director hereunder shall be served upon] to the applicant
either by registered mail or by personal delivery at the address shown on
the application.
If
the applicant cannot be found in the [county] County,
service by personal delivery [shall] must be made [upon] to the person
who is [at the time] in charge of the [establishment] hotel.
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263
54-22. Display.
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273
274
275
276
277
278
279
280
281
282
[Each] The applicant must promi nently display each license issued under this
[division shall be prominently displayed] Divisi on in the [establishment] hotel
for which it was issued.
54-22A. Complaints
W
The Direc tor must investigate any [[complaints]] complaint that~ licensee
is in violation of this Articl e within 30 days of receiving the
compl aint[[/ s./s]l.
.{hllf
~
violat ion is found, the Direc tor must issue written notice of the
violat ion to the owner or opera tor requiring that the violation be corrected
immediately.
(£} If the violation is not correc ted immediately, the Direc tor may revoke or
suspe nd the license under Sectio n 54-26.
54-23. Change of location of establishment; transfer.
(a) When ever [an establishment]
~
hotel changes its location, the curren t
license held by such owne r or operator under this [division shall
automatically become] Divisi on is void.
(b) The [director] Direc tor may [, in his discretion,] authorize the transfer of
a license issued under this [division] Divisi on to a new owner or opera tor
upon an application for transf er of the license and paym ent of a transf er
fee [which shall be establ ished by the count y executive].:. The Execu tive
must establish the transf er fee by [written] regulation adopted under
metho d (3) of section 2A-15 ofthis Code.
283
284
285
286
287
54-24. Expiration.
All [annual] licenses issued under this [division shall] Divisi on expire on
Decem ber 31 of the year for which they are issued, unless soone r revoked or
suspe nded [as provided in] under this [article] Article.
288
289
290
54-25. Renewal.
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No. 2-16
291
292
293
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
309
310
311
312
[Every establishment shall, on] On or before July 1 of each year, every hotel
must make application to the department for renewal of the [annual] license
required by this [division] Division. Before [an annual]
fl:
license for any
[establishment shall be] hotel is renewed by the [director, the director shall
have received] Director, the Director must receive, [within ninety (90) days
prior to renewing any such license,] certificates as [prescribed in section]
required
.!2y
Section 54-17 [, which shall indicate thereon that the premises
have been inspected within ninety (90) days prior to the expiration of the
license]. The Director must renew the license after receiving the certificates,
completing any outstanding complaint investigations, and finding that the
application satisfies this Article.
54-26. Revocation or suspension generally.
(a)
The [director] Director may revoke or suspend any license issued under
this [division upon finding] Division if the Director finds that the owner
or operator of any [establishment] hotel is in violation of any provision
of this [article] Article. Any such revocation or suspension [shall] must
be by written order directed to [and served upon] the owner or operator
of [[such establishment]] [in the manner prescribed in subsection (c) of
section 54-21] the hotel under the procedures of subsection 54-2l(c).
Any such notice of revocation or suspension [shall] must require the
holder of the license to appear before the [director] Director and show
cause why the license should not be revoked or suspended [in the
manner provided above].
313
314
315
316
317
(b) The Director may revoke or suspend any license issued under this
Division if the Director finds that the [establishment] hotel is disruptive
to the general peaceful enjoyment, dangerous to the health and safety,
of the community or a nuisance because of noise or indecent or immoral
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BILL
No. 2-16
318
319
320
321
322
323
324
325
326
327
328
329
330
331
332
333
334
335
336
activity by any guest, owner, operator or employee. The Director may
also revoke or suspend any license issued under this Chapter if the
owner or operator of the [establishment] hotel has, while operating the
[[establishment]] hotel, been convicted of violating:
(1) the provisions of the Criminal Law Article of the Maryland Code
[listed] in section 54-20; or
(2) the drunkenness and disorderly conduct provisions of Section 10-
201 of the Criminal Law Article of the Maryland Code while on
the licensed premises.
Revocation or suspension of a license under this subsection must follow
the procedures in Section 54-2l(b).
54-27. Appea ls from denial, revocation or suspension.
Any person aggrieved by the denial, revocation or suspension of a license
under this [division] Division may appeal from the action of the [director]
Director to the [county board of appeals] Board of Appeals. Such person
[shall] must file a [written] notice of appeal with the clerk of the [board of
appeals] Board of Appeals within [twenty (20)] 20 days after service of notice
of such action. Upon receiving such appeal, the [board of appeals shall] Board
of Appeals must hold a hearing [thereon] within [thirty (30)] 30 days after the
notice of appeal has been filed, and [shall] must act upon [such] the appeal
within [thirty (30)] 30 days after the hearing. [The council may, by resolution
entered on its minutes, extend such periods of time.]
Division 3. Health Standards and Regulations.
54-28. Water and sewer facilities.
337
338
339
340
341
342
343
344
Water and sewer facilities in every [establishment] hotel must be connected
to public lines where such lines are available. [In the event no] When public
sewer lines are not available.,_ the [sewage must be collected, treated and
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BILL
No. 2-16
345
346
347
348
349
350
351
352
353
354
355
356
357
358
359
360
361
362
363
364
365
366
367
368
369
370
371
disposed of in an independent sewerage system which complies with the
standards of the excreta disposal laws of the State and of] private sewage
system must satisfy Chapter 45 of this Code. [In the event no] When public
water lines are not available, [no] only
~
water supply [may be used by an
establishment unless it has been] approved by the Director [of the Department
of Health and Human Services] may be used.
54-29. Plumbing facilities.
[All plumbing facilities in establishments shall be constructed, installed and
maintained so as to prevent sanitary hazards.] Toilet and bath facilities [shall
be provided in accordance with] must satisfy the plumbing code for the
Washington Suburban Sanitary Commission (and any amendments thereto]
as amended.
54-30. Disposal of solid waste.
All solid waste [at establishments shall] must be stored in covered metal
receptacles [which shall be]:. These receptacles must be removed from the
premises and cleaned at least once a week or as often as [prescribed by the
director] the Director requires. All such waste [shall be burned, buried or
otherwise] must be disposed of in [such]
54-31. [Screens.] Insects.
~
manner [as] that does not [to]
constit ute a nuisanc e [or to be accessi ble to animal s or flies].
[All outside doors, windows and other outside openings in establishments
shall be adequately screened against flies, mosquitoes and other insects.
If
the
establishment is completely air-conditioned, screening shall not be required.]
All interior spaces must be maintained free of all insects. Any infestation
must be immediately addressed
QY
management.
54-32. Minimum size of rooms.
(a) [No] Any habitable room [shall be occupied at] in
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BILL
No. 2-16
372
373
374
375
376
377
378
379
380
381
382
383
384
385
386
387
388
389
390
391
392
393
394
395
396
397
398
[
an establishment unless it contains] !! hotel must be at least [seventy
(70)] 70 square feet in floor area and there must be at least [fifty (50)] 50
square feet of floor area for each person. Children under [twelve (12)] 12
years of age [shall be] are counted as one-half person. Children under
[one (1)]
l
year of age [shall not be] are not counted as!! person for the
purpose of this requirement.
(b) At least one-half of the floor area of every habitable room [shall] must
have a ceiling height of at least [seven (7)]
1
feet, and the floor area of
that part of any room where the ceiling height is less than [five (5)]
2
feet
[
shall] is not [be] considered as part of the floor area in computing the
total floor area of the room for the purpose of determining the maximum
permissible occupancy [thereof] of the room.
54-33. Heating and ventilation.
All rooms
in
[establishments shall] hotels must be adequately heated and
ventilated. Every habitable room [shall] must have at least one [(1)] easily
opened window or skylight [which can easily be opened], or such other device
[as will] that adequately [ventilate] ventilates the room. Every [establishment
shall] hotel must have~ heating [facilities which arel system. The heating
system must be properly installed and maintained in safe and good working
condition [. Such heating facilities shall_be] capable of safely and adequately
heating all habitable rooms, bathrooms and water closet compartments to a
temperature of at least [seventy (70)] 70 degrees Fahrenheit at a distance of
[three (3)]
l
feet above floor level under ordinary minimum winter conditions.
54-34. Lighting.
All rooms in [establishments shall] hotels must be adequately lighted [by
either natural or artificial light and additional] including light [shall be
provided] for reading [purposes].
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BILL No. 2-16
399
400
401
402
403
404
405
406
407
408
409
41
o
411
412
413
414
415
416
417
54-35. Basement rooms.
[No habitable room shall be located in the basement of an establishment unless
the] Only when basement floors and walls are constructed of material
impervious to water.,_ may
~
habitable room be located
in
.e:
basement.
54-36. Cellar rooms.
A room in a cellar [shall not be considered] is not
.e:
habitable room [and shall
not be used by any establishment for habitation].
54-37. Bedding and linen.
(a) All mattresses, blankets and other bedding used at [establishments shall]
hotels must be kept clean and free of bedbugs.
(b) Clean sheets and pillow slips [shall] must be provided in
[establishments] hotels at least once each week and after each
succeeding guest.
[(c) Two (2) clean towels shall be provided for each establishment guest at
least twice each week and after each succeeding guest.]
54-38. [Drinking glasses.] Reserved.
[Drinking glasses used in any establishment shall be sterilized at least after
each succeeding guest and common drinking glasses shall be prohibited.]
54-39. Food, dining rooms and kitchens.
418
419
420
421
422
423
424
Food, public dining rooms and kitchens in each [establishment shall comply
with the provisions of chapter] hotel must satisfy Chapter
.li
of this Code [and
any amendments thereto] as amended.
54-40. Maintenance of premises.
Every owner or operator of [an establishment shall be]~ hotel is responsible
for maintaining all parts of the [[establishment]] hotel, in a clean and sanitary
condition [all parts of the establishment], including the land on which the
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BILL
No. 2-16
425
426
427
428
429
430
431
432
433
434
435
436
437
438
439
440
441
442
443
444
445
446
447
448
449
450
451
[establishment] hotel is located. Every owner or operator [shall be] 1s
responsible for maintaining the [establishment] hotel in good repair.
54-41. Inspections and report of violations of article.
The Department [of Heal th and Human Services] is responsible for making
all necessary inspections [of the establishments] regulated under this Article
and must report to the Director any violations of this Division.
Article III. [Reserved] Bed and Breakfast and Short Term Residential Rental.
54-42. License required.
A perso n must not opera te~ bed and breakfast or short term residential rental
in the County without
~
license issued
QY
the Director. After the initial
issuance of~ license, the license must be renewed once
£1.
year.
54-43. Certification for! License.
An application for~ bed and breakfast license or short term residential rental
or
~
license renewal for either use must be signed
QY
the applicant. The
applicant must certify that:
.(fil
the building in which the bed and breakfast or short term residential
rental is located complies with all applicable zoning standards under
Chapter 59 of this Code;
.(hl
[[the overnight occupants of each dwelling unit will satisfy the definition
of one household]] the total number of overnight guests in the short term
residential rental who are
18
years or older is limited to six, and the total
number of overnight guests over
18
years of age per bedroom is limited to
two.
(
c)
only habitable rooms will be used
by
guests ;
smoke detectors in all units and carbon dioxide detectors in all units
using natural gas operate as designed;
sanitation facilities operate as designed;
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BILL
No. 2-16
452
453
454
455
456
457
458
459
460
461
462
463
464
465
466
467
468
469
470
471
472
4 73
474
475
476
477
478
ill
.(g)
.(h)
the applicant has not been found guilty of~ violation of this Cha
pter in
the past
12
months;
all local taxes and required fees are paid in full;
the dwelling unit where the bed and breakfast or short term resi
dential
rental is located is the primary residence of the applicant; [[and
]]
the applicant is the owner or authorized agent of the facility;.
the applicant posted rules and regulations inside the rental, incl
uding
contact information for a representative designated for eme
rgency
purposes;
the designated representative resides within
15
miles of the unit
and be
accessible for the entirety of any contract where the primary resi
dent is
not present;
a record of all overnight visitors will be maintained and readily ava
ilable
for inspection;
ill
(j)
(k)
(1)
(ml
abutting and confronting neighbors, and where
applicable, the
municipality in which the residence is located, was notified
of the
application.
In
an apartment or condominium building, neighbo
rs living
across the hall and those that share a ceiling, floor, and wal
ls with the
applicant's unit were notified of the application;
U1)
the application is permitted by any Home Owner's
Association or
condominium document, or a rental lease; and
(cl
except for persons visiting the primary resident, only register
ed guests will
be allowed on the property.
54-44. Applications.
The Director must establish an electronic method of submitt
ing, 1ssmng,
renewing, denying, and revoking an application for
~
license
through the
internet.
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BILL
No. 2-16
479
480
481
482
483
484
485
54-45. License Approval and Renewal.
The Director must:
W
{hl
accept the self-certification of the applicant after verifying
compliance
by
reviewing available records; and
approve or deny £! license or £! license renewal within
Ll.
working days
after receipt of the application and all required fees unless
the Director
receives£! challenge to the certifications under Section 54-
47.
Eac h license must be issued for a term of one year,
renewable for
additional one-year terms, subject to payment of the lice
nse fee and
compliance with all appli_cable laws.
A challenge to any required certification made
by
the app
licant may be
filed with the Director within 30 days after the application
is filed by:
ill
£! resident or owner of real property located within 300 feet of£!
486
487
488
(c)
489
490
491
492
493
494
495
54-46. Challenge
to
Certifications.
W
ill
licensed or proposed bed and breakfast; or
£! civic or homeowner' s association comprised of pro
perty
owners located within 300 feet of£! licensed or proposed
bed and
breakfast.
496
497
498
{hl
The Director must, within 60 days after receipt of the cha
llenge:
499
500
501
502
503
504
ill
ill
provide notice of the challenge to the applicant;
provide an opportunity for the applicant to respond
to the
challenge;
investigate the question of fact raised by the challenge; and
revoke or deny the license if the Director finds that one
or more
facts certified by the applicant is false.
ill
ill
54-47. Suspension
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BILL
No. 2-16
505
506
507
508
509
51 0
511
(a) The license mus t be suspended for any applicant receiving at leas
t three
verified complaints within a calendar year.
(b) Renewal or reinstatement of licenses must follow procedures esta
blished
by the Director.
Appeals.
Any person aggrieved
QY
an approval, denial, revocation or suspensi
on of~
bed and breakfast license may appeal the decision to the Board of App
eals.
The Boa rd of Appeals must hold ~ hearing on the appeal within 30 days
after
the notice of appeal has been filed, and must act on the appeal within
30 days
after the hearing.
512
513
514
515
516
517
518
54-48. Effect of a revocation.
For
fl.
period of
J
years after
~
license is revoked, the Director must not
issue
~
bed and breakfast or short-term residential rental license to:
.(ru
.(hl
519
520
521
522
the former licensee or§: member of the former licensee's household; or
any applicant for~ license to use the same dwelling unit where the license
was revoked.
Approved:
523
Roge r Berli ner, President, Coun ty Coun cil
524
Date
Approved:
525
Isiah Legg ett, Coun ty Exec utive
Date
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BILL
No. 2-16
526
This is a corr ect copy ofCouncil action.
527
Linda M. Lauer, Clerk of the Council
Date
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MONTGOMERY COUNTY PLANNING BOARD
THE MARYLAND-NATIONAL CAPITAL PARK AND PLANNING COMMISSION
OFFICE
OF
THE
CI-LAIR
August 29, 2017
TO:
The County Council for Montgomery County, Maryland, sitting as the District Council
for the Maryland-Washington Regional District in
Montgomery County, Maryland
Montgomery County Planning Board
Zoning Text Amendment No. 17-03
FROM:
SUBJECT:
BOARD RECOMMENDATION
The Montgomery County Planning Board of The Maryland-National Capital Park and Planning
Commission reviewed Zoning Text Amendment No. 17-03 at its regular meeting on July 13, 2017. By a
vote of 4:0 (Commissioner Dreyfuss absent), the Planning Board recommends approval of the text
amendment to modify the definition of "Household Living"; define "Short-Term Residential Rental"
(STRR); and establish limited use standards for Short-Term Residential Rental.
The Planning Board's recommendations on ZTA 16-03, dated May 11, 2017, were formalized
by the introduction of ZTA 17-03 and the revisions to Bill 2-16 (originally introduced February 2, 2016
as a companion to ZTA 16-03 and pertaining to the licensing and registration for transient lodging). No
substantive changes have been made to the Board's recommendations as part of this ZTA. As such, the
Board recommends approval of ZTA 17-03 as introduced and as discussed in the technical staff report.
It should be noted that the Board continues to suggest that the Council consider appointing one agency
to oversee both short and long term residential rentals to make it easier for the public to know who to
contact should problems arise.
In February 2016, the County Council introduced proposed legislation (Zoning Text
Amendment ZTA 16-03) to expand the Bed and B~eakfast use to allow short-term residential rentals as
limited uses in many zones. ZTA 16-03 was introduced in conjunction with Bill 2-16, which would
update the licensing requirements for all transient housing, including a Bed and Breakfast. During its
review ofZTA 16-03 on March 3, 2016, the Planning Board suggested a different approach to the ZTA,
and proposed adding a new use to the Zoning Code instead of modifying the Bed and Breakfast use.
The Planning Board also advised the Council that very little time was provided for the community to
discuss the issue.
After holding a public hearing on ZTA 16-03 and Bill 2-16, the Council tabled the draft
legislation and asked Planning Department staff to research best practices across the country while
reaching out to County residents and stakeholders to provide opportunities for their input in
establishing new regulations.
(ii)
8787 Georgia Avenue, Silver Spring, Maryland 20910 Phone: 301.495.4605 Fax: 301.495.1320
www.montgomeryplanningboard.org E-Mail: mcp-chair@m.ncppc-mc.org
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The Honorable Roger Berliner
August 29, 2017
Page 2
In response to the County Council's directive, the Planning Department technical staff held
three community meetings at Planning Department Headquarters in 2016 (December 5, September 19
and July 18) to gather feedback on the draft ZTA. Staff also created a website devoted to the issue with
an online comment board. Staff also received numerous emails from community members and
stakeholders with differing opinions on Short-Term Residential Rental (STRRsf The concerns expressed
were not unique to Montgomery County; with the majority being grouped into three categories: (1)
negative impacts on residential neighborhoods, (2) decreased supply of affordable rental housing, and
(3) unfair competition with the hotel industry. Staff also conducted internet research to determine
how short-term residential rental (STRR) uses are regulated in other jurisdictions. Nationally, many
jurisdictions have enacted regulations or are in the process of crafting them (see attached technical
staff report for ZTA 16-03).
The Board and technical staff recommended an approach to addressing the issue of short-term
tenancy in a way that attempts to balance the demand for this use while minimizing its impacts to
neighborhoods. Council Staff believed that some of the ZTA provisions recommended by the Board
should go in Chapter 54, Transient Lodging, as they pertained to regulations dealing with licensing and
enforcement of STRRs. The Board and Planning Staff had no objection to putting some of the
recommended provisions in Chapter 54. Planning Staff worked with Council Staff on specific language
in ZTA 16-03 and associated Bill 2-16. ZTA 17-03 and the applicable revisions to Bill 2-16 express the
Board's recommendations on providing short term rentals consistent with those transmitted as part
of ZTA 16-03. The specifics of the Board's recommendations are summarized in the attached technical
staff report.
The Board and our technical staff look forward to working with the Council in its deliberations
on this legislation.
CERTIFICATION
This is to certify that the attached report is a true and correct copy of the technical staff report
and the foregoing is the recommendation adopted by the Montgomery County Planning Board of The
Maryland-National Capital Park and Planning Commission, at its regular meeting held in Silver Spring,
Maryland, on Thursday, July 13, 2017.
~
Chair
CA:GR
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D
D
D
MONTGOMERY COUNTY PLANNING DEPARTMENT
THE MARYLAND-NATIONAL CAPITAL PARK AND PLANNING COMMISSION
MCPB
Item No. 5
Date: 7/13/17
(ZTA 17-03) Accessory Residential Uses -Short-Term Rental
Gregory Rus_s, Planner Coordinator, FP&P, gregory.russ@montgomeryplanning.org, 301-495-2174
Emily Tettelbaum, Senior Planner, Area 2, emily.tettelbaum@mon tgomeryplanning.org, 301-495-4569
Pam Dunn, Chief, FP&P, pamela.dunn@montgomeryplanning.org, 301-650-5649
Completed: 7/6/17
Description
Zoning Text Amendment (ZTA) 17-03, as introduced, modifies the definition of "Household Living"; defines
"Short-Term Residential Rental" (STRR); and establishes limited use standards for Short-Term Residential Rental.
The Planning Board's recommendations on ZTA 16-03, dated May 11, 2017, were formalized by the introduction
of ZTA 17-03 and revisions to Bill 2-16 (originally introduced February 2, 2016 as a companion to ZTA 16-03 and
pertaining to the licensing and registration for transient lodging). No substantive changes have been made to the
Board's recommendations as part of this ZTA.
Summary
Staff recommends approval of ZTA 17-03 as introduced and the applicable revisions to Bill 2-16 since
the proposed standards and regulations mirror those transmitted by the Board to the County Council
as part of ZTA 16-03. It should be noted that the Board continues to suggest that the Council consider
appointing one agency to oversee both short and long term residential rentals to make it easier for
the public to know who to contact should problems arise.
Background/Analysis
As discussed in more detail in the Board's transmittal letter and the technical staff report for ZTA 16-03
(included as Attachment 3), the Bo;rd and technical staff recommended a differe.nt approach· to
addressing the issue of short-term tenancy separate from the introduced modifications to the Bed and
Breakfast use category, as depicted in ZTA 16-03, in a way that attempts to balance the demand for this
use while minimizing its impacts to neighborhoods. As discussed previously in the analysis of ZTA 16-03,
Council Staff believed that some of the ZTA provisions recommended by the Board should go in Chapter
54, Transient Lodging, as they pertained to regulations dealing with licensing and enforcement of STRRs.
The Board and Planning Staff had no objection to putting some of the recommended provisions in
Chapter 54. Planning Staff worked with Council Staff on specific language in ZTA 16-03 and associated
Bill 2-16. ZTA 17-03 and the applicable revisions to Bill 2-16 express the Board's recommendations on
1
~)
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providing short term rentals without making substantive changes to the existing provisions governing a ·
Bed and Breakfast use. For your convenience, the Board's recommendations are summarized below.
Staff depicts in bold whether the Board's recommendations are provided in ZTA 17-03, Bill 2-16 or in
both documents.
The short-term rental use ofresidential property should be regulated separately from a Bed and
Breakfast use, thereby maintaining the "spirit" of the current Bed and Breakfast use and its
definition (to be allowed only in an owner-occupied detached house), including many of the
existing use standards.
A Bed and Breakfast is categorized under the Commercial Use Group as "Lodging" and should
remain as such. Other forms of short term rental should be considered "accessory" to the
primary residential use of a property and, therefore, established under the "Accessory
Residential Uses" use group of Section 59-3.1.6, Use Table.
(ZTA
17-03)
Short term residential occupancy of a dwelling or room should be restricted to a maximum
specified number of days per year (90} only if the "host" will not be present during the rental
period but a limit on the maximum number of days is not necessary when the host remains in
the home during the Short-Term Residential Rental stay.
(ZTA 17-03)
All short-term rentals should be monitored and licensed by the County.
(ZTA
17-03
&
Bill
2-16)
The Board also suggested an enforcement measure that would suspend a host's Short-Term
Residential Rental license if at least three verified complaints against that host have been
received within a calendar year.
(Bill
2-16}
The Board further recommended that the property owner or tenant who "hosts" the short-term
rental of the unit be the primary resident of the home.
(ZTA
17-03
&
Bill
2-16)
Prohibit STRRs on properties that include a farm tenant dwelling or an accessory apartment.
(ZTA
17-03)
Require that the STRR comply with any HOA or condo association document, or a renta[ lease.
(Bill
2-16)
Require that an applicant notify all abutting and confronting neighbors about the application for
an STRR license.
(Bill
2-16)
Limit the total number of overnight guests per STRR (over 18 years old) to six and the total
number of overnight guests per bedroom to two.
(ZTA
17-03
&
Bill
2-16)
Require the host to maintain a list of all overnight visitors.
(Bill
2-16)
Require one off-street parking space per rental contract unless the online listing indicates that
vehicle parking is prohibited.
(ZTA 17-03)
Allow only registered guests on the property to prevent parties, events, etc. that would be
disruptive to residential neighborhoods.
(Bill
2-16)
Require the applicant to post rules and regulations inside the rental.
(Bill
2-16}
Require the host to provide contact information for a designated representative that resides
within 15 miles ofthe property and that is available to deal with emergencies if the host is not
present.
(Bill
2-16)
-2
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·•
Require the home to have working, accessible fire extinguishers, smoke detectors, and where
appropriat e, carbon monoxide detectors.
(Bill 2-16)
Conclusion
Staff recommen ds approval of ZTA 17-03 as introduced and the applicable revisions to Bill 2-16
pertaining to Short-Term Residential Rentals since the proposed standards and regulations mirror those
transmitte d by the Board to County Council as part of ZTA 16-03. It should be noted that the Board
continues to suggest that the Council consider appointing one agency to oversee both short and long
term residential rentals to make it easier for the public to know who to contact should problems arise.
Attachmen ts
1.
2.
3.
ZTA 17-03 as introduced
Excerpts from Bill 2-16
Planning Board recommendation (5/17 /17), Citizen Comments and Staff report on ZTA 16-03
(S/11/2017)
3
@
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Fiscal Impac t Statement
Coun cil Bill 2-16
Transient Housi ng
-
Licensing and Registration
1. Legisl ative Summary.
Bill 2-16 defines hotel, bed and breakfast, and short term residential rental, and deletes
obsolete definitions of other types of transient housing. While hotels will continue to
follow current licensing requirements, the bill establishes a new method of licensing for
bed and breakfast establishments and short term residential rental units, including the
requir ement that the Department of Health and Human Service (DHHS) establish an
electronic, on-line licensing system.
2. An estimat.e of changes in Coun ty revenues and expenditures regardless of wheth
er
the revenues or expenditures are assuined
in
the recommended or approved budge
t.
Includ es source of information, assumptions, and methodologies used.
It
is estimated that there are 1,400 potential short-term residential rental unit licensees in
the County that would be affected by the bill. The Department does not anticipate a
significant increase in the numbe r of bed and break f~f establishments.
Expenditures
As ·shown in
Exhibit 1
under Numb er 3, the cost to implement this bill
in
FY18 is
estimated to be $213,947. Annual expenditures are estimated to be approximately
$211,000 beginning in FY19.
The bill requires DHHS to establish an electronic, online licensing system. Such a
system does not currently exist in the Depar tment' s Licensing and Regulatory Services
office. Products are being evaluated, and additional research is required to 'obtain a more
precis e cost estimate of implementing such a system. For ill~tra tive purposes, based on
a quote from Host Compliance, a vendo r currently providing electronic solutions to local
governments for this service, such a system could cost up to $100,000
annually
for
software licensing fees.
to $55,000 for a contractor to develop system requirements. This estimate is based on
1,000 hours of work at $55 per hour.
In
addition to annual software licensing fees, there would be one-time expenditures of up
To handle complaints, track data analytics, and perform outreach and education, the
Depar tment would need one part-time Environmental Health Specialist (0.5 FTE)
at
an
estimated cost of$48 ,018 annually beginning in FY18. This estimate assumes 100
complaints are received annually, requiring an average of 3 hours to resolve, and that 15
hours of education and outreach
is
performed weekly. In addition, the review of annual
license applications is estimated to require up to 25Ohours of an Office Service
Coordinator support at an estimated cost of$8,4 29 (assuming $33.71/hr). Beginning in
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FY19, the Depa rtme nt may need a part- time Information Systems and
Tech nolo gy
Specialist (0.5 FTE) to main tain and troubleshoot the system at an estim
ated annu al cost
of $52,147.
Annual
expenditures for outreach, print ed materials, website desig
n and conte nt
deve lopm ent woul d cost approximately $2,500.
Revenues
Fees
for
short-term residential rental units woul d need to be establishe
d by Exec utive
Regulation. As show n in
Exhibit 2
unde r Num ber
3,
for illustrative
purposes, assum ing
a $100 annu al fee for 1,400 short-term residential rental unit licensees,
reven ues woul d
be $140,000 annually.
Currently, the Mon tgom ery Coun ty licensing fee for board ing hous es
is $85 per year.
'Lice nsing fees in other juris dicti ons that have passe d similar laws inclu
de San Francisco,
CA ($50 for 2 years), and Portland, OR ($178 for the first year and
$62 each subsequent 2
years).
3. Revenue and expenditure estimates covering at least the next 6
fiscal years.
Exhibit 1. Expenditure Estimates
Estimated Expenditures
FYl8
FY19
FY20
FY21
FY22
-
Personnel Costs
Envir onme ntal Healt h Spec {0.5 FTEs)
$48,018 $48,018 $48,018 $48,018 $48,018
Office Servic es Coord inator (250 hrs)
$8,429
$8,429
$8,429
$8,429
$8,429
Inform ation Syste ms
&
Tech Spec (0.5 FTEs)
$0 $52,147 $52,147 $52,147 $52,147
Subto tal
$56,447 $108,594 $108,594 $108,594 $108,594
Operating Expenses
Annual Softw are Licensing Fees
$100,000 $100,000 $100,000 $100,000 $100,000
IT Contr actor for Syste m Dev (1,000 hrs)
$55,000
$0
$0
$0
$0
Outre ach, printing, web design , conte nt
devel opme nt
$2,500
$2,500
$2,500
$2,500
$2;500
Subto tal
$157,500 $102,500 $102,500 $102,500 $102,500
Grand Total
$213,947 $211,094 $211,094 $211,094 $211,094
Costs based on vendor quote for electronic licensing and registration system
.
IT contractor for planning and development estimate based on 1,000 hrs
of requirements@ $55/h r
FY23
$48,018
$8,429
$52,147
$108,594
$100,000
$0
$2,500
$102,500
$211,094
Total 6-yrs
$288,108
$50,574
$260,735
$599,417
$600,000
$55,000
$15,000
$670,000
$1,269,417
Exhibit 2. Revenue Estimates
-
Short-term Residential Rental Unit
s
Revenue Estimate
Fee
FYlS
#
FY19
FY20
Revenue
#
FV21
Reven ue
#
FV22
FY23
Revenue
#
6-YrTo tal
Revenue
Revenue
Revenue
#
Annual
licensing Fee
Revenue
#
Note : The actual licensing fee woul d need to be established
by
Exec
utive Regulation. For
illustrative purp oses, this estimate assumes a $100 licensing fee.
$100 1,400 $140,0 00 1,400 $140,0 00 1,400 $140,0 00 1,400
$140,0 00 1,400 $140,0 00 1,400 $140,0 00 $840,0 00
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I
....
l
4. An actuarial analysis through the ~ntire amortization period for each bill that would
affect retiree pension or group insurance costs.
Not applicable.
5. An estimate of expenditures related to County's information technology (IT)
systems, including Enterprise Resource Planning (ERP) systems.
Establishing an online licensing process, would require new software.
As described in Number 2, this cost estimate assumes that the Department would contract
with a vendor to provide this software at an estimated annual cost ofup to $100,000 for
software license fees. In addition, establishing the product requirements for the online
licensing software is estimated to cost up to $55,000 in one-time expenses for a
contractor in FY18; whereas, ongoing operating and maintenance of the system is
estimated to cost up to $52,147 annually in personnel costs beginning in
FYI 9.
6. Later actions that may affect future revenue and expenditures if the bill authorizes
future spending.
Future spending is not authorized by the bill.
7.
An estimate of the staff time needed to implement the bill.
To handle complaints, track data analytics, and perform outreach and education, the
Department would need one part-time Environmental Health Specialist (0.5 FTE) at an
estimated cost"of$48,018 annually beginning in FY18. This estimate assumes 100
complaints are received annually, requiring ·an average of 3 hours to resolve, and that 15
hours of education and outreach is performed weekly. In addition, the review of annual
license applications is estimated to require up to 250 hours of an Office Service
Coordinator support at an estimated cost of $8,429 (assuming $33.71/hr). Beginning in
FYI 9,
the Department may need
a
part-time Information Systems and Technology
Specialist (0.5 FTE)
to
maintain and troubleshoot the system at an estimated annual cost
of $52,147.
·
To establish applications and licenses would require approximately 80 hours of
administrative staff time.
·
8,
An
explanation of how the addition of new staff responsibilities would affect other
duties.
Additional time required to implement and administer the program might result in delays
in customer service for existing license and regulation services.
9. An estimate of costs when an additional appropriation is needed.
See Number 3.
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10. A description of any variable that could affect revenue and cost estim
ates.
The specific requirements and specifications of the electronic online licensing produ
ct
have not been determined. This cost estimate assumes that the Department would
contract with a vendor to provide this software at an estimated annual cost of up to
$100,000 for software license fees, depending on product requirements.
The number of actual potential licensees is difficult to estimate and might change. Any
significant change in the number of licensees would impact both revenue and cost .
estimates accordingly.
11. Ranges of revenue or expenditures that arc uncertain or difficult to proje
ct.
More precise revenue and expenditure projections cannot be made until the licensing
fees
have been established, the actual potential number of licensees is known, and the costs
of
purchasing and implementing the electronic online licensing software are known.
12.
If
a bill is likely to have no fiscal impact,
why
that is the case.
Not applicable.
13. Other fiscal impacts or comments.
14. The following contributed to and concurred with this analysis:
Clark Beil, Licensure and Regulatory Services, DHHS
Jason Rundell, DHHS
Joshua Watters,
0MB
Date
B/-30/rt
.
.
,
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···,
·.· 1
Economic Impact Statement
Bill 2-16 Transient Housing - License and Registration
Background:
Bill 2-16 would revise Chapter 54 of the County Code. The revisions update the provisions for
hotels, delete forms of transient housing no longer allowed by the Zoning Code (Chapter 59),
establish a less burdensome method oflicensing for Bed and Breakfast establishments and Short
Term Residential Rental (STRR), and assign responsibilities for licensing between Executive
departments. As introduced, Bill 2-16 would simplify existing requirements for hotels in more
precise, concise, and decisive text. Licenses for a Bed
and
Breakfast would be by self-
certification but subject to revocation based on substantiated complaints. The Bill intends to
make the process for licensing and registration more efficient for hotels and other transient
housing.
In February 2016, the County Council introduced Zoning Text Amendment 16-03 (ZTA 16-03)
in conjunction with Bill 2-16 to expand the Bed and Breakfast use to allow short-term residential
rentals as limited uses in many zones. Bill 2-16 anticipates the approval of ZTA
16-03,
however,
the enactment of Bill 2-16 does not require the approval of ZTA
16-03.
Under the new Zoning
Code, household living is defined as the residential occupancy of a dwelling by a household on a
monthly or longer basis. Currently, an owner may not rent "or loan for no charge" their dwelling
for shorter time perio<;is. A Bed and Breakfast is a separately defined use (a detached house that
is owner-occupied with no more than
5
guest rooms.for rent and customarily serves breakfasts to
guests) with specific standards. In the opinion of the sponsor, the limitations on short-term rental
forecloses the opportunity for owners to benefit from the sharing economy. The sponsor
believes that the opportunities for short-term tenancy should be expanded.
The Montgomery County Planning Board recommends with ZTA
16-03
that all short-term
rentals be monitored and licensed by the County and suggests an enforcement measure that
would suspend a host's STRR license if at least three verified complaints against the host have
been received within a calendar year. The Board further recommends that the property owner or
tenant who "hosts" the short-term rental of the unit must be the primary resident of the home.
The Board's intent is to strike a balance recognizing the demand for short term residential rentals
and the benefit such rentals provide to both host and renters without commercializing residential
neighborhoods.
1. The sources of information, assumptions, and methodologies used.
Montgomery County Planning Board Recommendation to Council for Zoning Text
Amendment 16-03, May
2017
Sheppard, Stephen and Udell, Andrew; "Do Airbnb Properties Affect House Prices?";
Williams College Department of Economics, October 2016
Zervas, Georgios, Proserpio, Davide, and Byers, John; "The Rise of the Sharing
Economy: Estimating the Impact of Airbnd on the Hotel Industry", Boston University &
The University of Southern California, November 2016
Shafroth, Frank; Governing Magazine, "Airbnb Creates an Affordable-Housing Dilemma
for Cities", September 2016
Page
1
of 4
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Econo mic Impac t Statement
Bill 2-16 Trans ient Hous ing- License and Registration
Bill 2-16, in conjunction with ZTA No. 16-03, would allow a means for property owners
to
earn income through the sharing economy. It would allow for "Airbnb" or other similar short
term residential rentals. Airbnb is an internet based incarnation of a bed and breakfast. The
growth of peer-to-peer markets has provided a mechanism through which private individuals
can enter a market as small scale, often temporary, suppliers of a good or service. Airbnb
allows the occupant of a housing unit to advertise their willingness to rent an entire
resid.ence, or room or space
in
the residence, for any duration; rentals could be as short as
1
day, but are generally for fewer than 30 days. Homeowners or tenants renting space throug
h
any Airbnb like establis~ment would still be required to obtain a County license allowing
"transient visitors."
With the rise of the sharing economy, and the economic and social benefits to residents of
sharing resources, short-term rental activity continues to grow, with Montgomery County
having an estimated 1,400 short-term rentaUistings. As part of the fiscal impact analysis
completed for the bill, the Department of Health and Human Services assumes a licensing
fee
of approximately $100 will accompany the registration process resulting in additional net
income to the County of $140,000.
2. A descri ption of any variable that could affect the economic impac t estimates.
Variables that could affect the economic impact estimates include:
I.) The number and location of STTR listings particularly those near densely popul ated
Metro stations
2.) The sharing economy's impact on housing affordability and property values in the
Count y
3 .) The negative externalities caused by sharing economy guests in a currently unregulated
hotel industry environment
4.) The positive impact on the County from the sharing economy including new incom e
streams for residents as well as encouraging tourism and its associated economic benefits
5.) The negative impact on County hotel revenues given additional STTR options
Stephen Sheppard and Andrew Udell note in their 2016 study "Do Airbnb Properties Affect
House Prices?" that" ... most policy makers appear to belie"e that Airbnb causes housing
prices to increase." They note as residences are held as assets and rented via Airbnb to create
an income stream, this can permit speculating for potential capital appreciation as well as
generating rental income during the period of ownership. The potential income and capita
l
gains might jointly draw investors to purchase residential property not for their own use and
to hold onto properties for longer because rental income obtained via Airbnb ultimately
reduces the cost of ownership. Either of these mechanisms would effectively increase
deman d for housing and drive up the price of sales and rentals on these units.
In
their 2016 paper "The Rise of the Sharing Economy: Estimating the Impact of Airbnd on
the Hotel Industry" Georgios Zervas and colleagues attempt to quantify Airbnb's impac t on
local neighborhoods. Focusing on Airbnb usage in Texas, they found that a 10% increase
Page2 of 4
in
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Economic Impac t Statement
Bill 2-16 Transient Housing
-
License and Registration
the number of listings available on Airbnb is associated with a 0.34% decrease in monthly
hotel revenu es. With municipalities struggling to balance the econom ic boost from the
growth of home-s haring services with the pressin g need for afforda ble housing, ZTA 16-03 is
framed in a manne r by the Montgomery County Planning Board to mitigate the primary
concerns raised during the legislative process including (1) negativ e impact s on residential
neighb orhood s, (2) decreased supply of affordable rental housing , and (3) unfair competition
with the hotel industry.
3. The Bill's positive or negative effect,
if
any on employment, spendi ng, ·savings,
investment, incomes, and property values in the County.
The Bill's econom ic impacts, both positive and negative, derive from the resultin~ market
dynamics of the sharing economy. Potentially negative effects include widespread
conver sion of residen tial housing to short-term rentals, that when taken to extremes, results
in the loss of housin g for permanent residents. Turning long-te mi rentals into short-term
rentals can change the character of the commu nity, tighten the housin g supply, and make
neighb orhood s less stable. Home-sharing services take apartm ents off the long-term rental
· market and are a factor in driving up rents to unaffordable levels particularly in areas like
Montgo mery County where housing costs are high.
Positive effects include property values may increase both becaus e of increased demand for
commercial (non-residential) space, as well as the localized provisi on of amenities for
visitors. There are also mechanisms that may cause property values to decrease. The
increase in densitie s that come from accomm odating more people, or the negative
externalities (such as noise, traffic, and safety concerns) caused by Airbnb guests might make
living near concen trations of Airbnb units unpleasant. Another difficult-to-quantify but
potentially signific ant factor would be the signal that increasing Airbnb availability might
provide for neighb orhood quality and subsequent gentrification. The emergence of
concentrated provisi on of Airbnb units could itself induce speculative purchase of residential
property in anticip ation of subsequent capital gains. Sheppard· and Udell in their study found
a doubling of Airbnb listings is associated
with
increases of 6% to 11
%
in house values with
other conditi ons remaining the same. Studies conducted in New York and Los Angeles do
not necessa rily provide reasonable comparable metrics for the County given the considerable
differences in demographics, populations, and density variables of the cities studied.
An estimat ed econom ic impact cannot be quantif ied with specificity on employment,
spending, savings , investment, incomes, or propert y values given a lack of data enumerating
the resulting impact s from the sharing economies for the County. The economic impact
resulting from Bill 2:.16 in conjunction with ZTA 16-03 will likely be multifaceted. The
analysis _would need to consider whether Airbnb units have the potenti al to increase the
County 's local population, especially local tourist population, and generate local economic
impact on busines ses by increasing the demand for local goods and services. This may cause
incomes to rise as well as increase localized provisi on of amenities that provide inviting
goods and service s to visitors. Prior research indicates the most likely effects to include
increases
in
rental rates and property values, new income streams for residents, encouraged
Page 3 of 4
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Econom ic Impact Stateme nt
Bill 2-16 Transien t Housing - License and Registra tion
tourism and
its
associated economi c benefits. Negative effects include, in extreme instances,
the potentia l loss of housing for permane nt residents, tightene d housing supply, and
potentially less stable neighborhoods. The extent of each of these responses and how they
correlate cannot be estimated without additional County specific data enumera ting the effects
an estimate d 1,400 available Airbnb units.will have over the course of each of these possible
outcome s
in
a newly studied landscap e of sharing economies.
4.
If
a Bill is likely to have no econom ic impact, why is that the case?
See
number
3.
5. .The followin g contribu ted to or concurr ed with this analysis:
David Platt, Dennis Hetman, and Robert Hagedoom, Finance.
Al
exan e . spmosa, rrector
.
Departm ent of Finance
4½~D
Date·
Page4
of
4
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PHED Committee #2 & 3
September 18, 2017
MEMO RANDU M
September 14, 2017
TO:
FROM:
SUBJECT :
Planning, H u1ng, and Economic Development Committee
1
Jeff ZyontU. nior Legislative Analyst
Zoning Text Amendme nt 17-03, Accessory Residential Uses - Short-term Rental; and
Bill 2-16, Transient Housing - Licensing and Registration
Background
Current code
Under the current code, the residential occupancy of a dwelling by a household is only allowed on a
monthly or longer basis.
1
Shorter term residential living is prohibited. In 2015, the Council amended tax
provisions to include any type of dwelling unit within the scope of hotel (transient lodging) taxes.
2
The
result is the collection of transient lodging taxes from illegal uses.
3
All transient lodging facilities are required to be licensed by the Department of Health and Human Services
(HHS).
4
The code treats all hostels, rooming houses, boardinghouses, and tourist homes the same as it
does hotels. To date, only hotels and the Center for Leadership Excellence have applied for and received
transient housing licenses.
5
No licenses have been issued for short-term residential rental use.
The Department of Permitting Services (DPS) has received few complaints concerning short-term
residential rentals. There are no ongoing enforcement actions by DPS. DPS refers complaints to HHS.
HHS stopped one owner from renting short-term by court order and has not fined any owner for the short-
term rental use of residential property.
Section 59.3.3. I.A. This is a typical restriction in zoning. A bed and breakfast and hotel are generally allowed under separate
provisions. ZTA 17-03 would create a new short-term residential rental use.
2
Bill 14-15, amending Section 52-16(b ). Taxes are being collected under an agreement with on-line host platform companies.
3
Average taxes collected from Airbnb has been $34,000 per month with an upward trend over the past 11 months. In May,
$48,631 was remitted. Taxing illegal income is well established. Al Capone went to jail for tax evasion for not reporting
illegal income. Even embezzled funds are subject to reporting and taxes (see, James v. United States, 366 U.S. 213 (1961).
4
Chapter 54.
5
Under section 54-17, licensed property must have a use and occupancy permit issued by DPS. Under Section 8-28, the
Department must issue such a permit IF (among other requirements) there is no violation of law. As transient lodging in a
single dwelling unit is not allowed by zoning, the Department may not issue a use and occupancy permit, thus making it
impossible to get licenses for transient housing outside of allowed hotels and bed and breakfast uses.
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ZTA History
Zoning Text Amendment (ZTA) 16-03, Land Use - Bed and Breakfast was introduced on
February 2, 2016.
It
would have amended the definition of a Bed and Breakfast and allow a Bed and
Breakfast as a limited use in all residential and mixed-use (Commercial/Residential) zones.
Councilmember Riemer was the lead sponsor of ZTA 16-03. On March 22, after a public hearing, the
sponsor and the Chair of the Planning, Housing, and Economic Development Committee asked the
Planning Board to reconsider the ZTA and allow for more public outreach. On May 11, 2017, the Planning
Board approved revised recommendations to ZTA 16-03. Because the recommendations were
significantly different from ZTA 16-03, Staff recommended a new ZTA (ZTA 17-03) to achieve the
Planning Board's recommendations. In addition, many of the Board's recommendations more clearly fell
under licensing requirements. To that end, Staff recommended revisions to Bill 2-16 to incorporated some
of the Planning Board's recommendations.
Public Hearing
On September 12, 2017, the Council conducted a public hearing. The positive tenor and tone of the public
hearing is a credit to the Planning Department's work on this issue. Most testimony favored the Planning
Board's proposed approach, with some relatively minor amendments. Suggested amendments are
included as issues for the Committee.
Hosts and potential hosts want to take advantage of the sharing economy without harsh restrictions. In
their opinion, short-term residential rentals can help make mortgage payments and property taxes
affordable. Hosts cited positive social interaction with their guests. One speaker asked for the ability to
have short-term rentals without constraints.
Home Owners Associations (HOAs) want greater assurances that their rules apply.
If
an association bars
rentals, then no license should be issued to allow the use. In addition, they request a provision to bar a
license if HOA dues are in arrears.
Hotel owners do not want short-term residential rentals to have a competitive advantage. The hotel
industry supported the proposed ZTA as offering a more even regulatory playing field. Hotels are
currently subject to taxes, licensing, and inspections. Hotels would favor an additional requirement that
any advertisement for a short-term residential rental include the owner's state and local license number.
The most critical testimony came from people and civic organizations who thought that the current illegal
status of short-term rentals was satisfactory. The testimony stated a concern that short-term residential
rentals will:
create nuisances (noise, traffic, underage drinking, litter, public urination, drugs, and other illegal
activities);
bring an influx of strangers to the neighborhood on a regular basis;
be unsafe because they do not meet fire and safety standards;
destabilize and disrupt communities by driving out long-term residents;
reduce the availability of affordable housing;
be an enforcement problem;
2
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turn into party houses;
create parking problems; and
be overconcentrated in unincorporated areas of the County.
Issues
Zoning
ZTA 17-03 would establish the following limitations on short-term residential rentals:
>
>
>
>
>
>
Allowed only on sites without either a farm tenant dwelling or an accessory apartment
Allowed only if the site is the primary resident of the applicant
Maximum rentals in a calendar year 90 days, counting only when the applicant is absent
The total number of adult overnight guests is limited to six
The total number of adult overnight guests per bedroom is limited to two
Unless the online listing indicates that vehicle parking is prohibited, one off-street parking space
must be provided for each rental contract.
Why should the zoning code be changed at all?
By its enactment of Bill 14-15, the Council agreed with the County Executive's recommendation to tax
short-term residential rentals.
6
Although licensing is required by the code, such licenses may not be issued
due to their illegal zoning status. The conflict between the licensing requirement and the zoning code
should be resolved.
There are certainly reasons to make the use legal. There are on the order of 1,400 dwelling units in the
County being offered and rented on-line. Short-term rentals offer an economic return for property owners.
Between April of 2010 and July 2017, the County has only received 30 complaint calls that described the
problem as transient housing.
7
Tax collections for short-term rentals are averaging around $35,000 a month.
8
Licenses cannot be issued.
There is no easy way to know who is undertaking this activity. The agreement between the County and
Airbnb for the payment of taxes
does not
allow for an audit trail.
9
Enforced licensing will at least allow
the County to track the level of short-term rental interest, if not the activity. Licensing would also require
the licensee hold to maintain activity records.
What problems can be avoided?
In some cities, apartment buildings have been purchased for the purpose of renting out every unit as a
short-term rental. The result was a de facto hotel and the loss oflong-term living options for households.
In suburban areas, it has been reported that some single-family dwellings have been purchased by investors
Any dwelling unit that offers, for compensation sleeping accommodations in the County was made subject to the hotel tax.
7
A complaint for a specific reason such as noise or trash would only be counted as a short-term rental complaint if the
complainer indicated that the source of the problem was a short-term rental.
8
It
is impossible to determine if all the taxes owed by short-term residential rentals are being collected.
9
Testimony asserted that the County is the only jurisdiction in Maryland that has reached a payment agreement.
It
has been
said that the State has refused any similar type of agreement because it does not allow a means to audit remissions.
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for the same purpose. ZTA 17-03 as introduced requires that the dwelling unit used as a short-term rental
must be the applicant's primary residence, regardless of dwelling unit type. (See lines 36-37.) This
10
limit the number of units any individual may use for short-term rentals to one.
provision would
11
Residents want the opportunity to know their neighbors. This is next to impossible when their neighbors
change every day. The Planning Board recommends that if the primary resident is not present in the
residence, the property can be used as a short-term residential rental for a maximum of 90 days in a
calendar year. (See lines 38-40.) This reduces, but does not eliminate, the concern. The Planning Board
did not recommend limiting the duration of rentals when the primary resident is present in the dwelling.
(See lines 40-4 3.)
Some testimony suggested that 90 days of rental with an absent owner was too long. The Greater
Colesville Civic Association recommended a 45-day limit. The proposed 90-day requirement is the same
duration as San Francisco.
12
The City of New Orleans allows a maximum of 90 days of short-term rental
14
13
without regard to the presence of an owner. The cities of Boulder, CO and Austin, TX have no limit.
Washington, D.C. is considering a 15-day limit.
The issue is a balancing act between neighbors' rights of cohesion and private property rights.
Is the provisio n for on-site supervision adequate?
As introduced, ZTA 17-03 includes the following provision:
If
the applicant is not present in the residence, the property can be used as a Short-Term Residential
Rental for a maximum of 90 days in a calendar year.
If
the applicant is present in the residence
during the rental stay, there is no limitation on the number of days the property can be used as a
15
Short-Term Residential Rental.
Testimony suggested clarifying this provision to state that "the property owner or an owner-authorized
resident of the property must be physically present and occupy the property during the short-term stay"
instead of using the term "applicant" and "present".
Staff agrees with this clarification.
Are too many people allowed in a short-term rental?
Under ZTA 17-03 as introduced, the maximum number of occupants is limited by housing code health
standards; however, the total number of overnight guests in the short-term residential rental who are 18
years or older is limited to 6, and the total number of overnight guests over 18 years of age per bedroom
is limited to 2. Under this provision, a 3-bedroom house could have 6 adults.
rentals, but that
lO
The Apartmen t and Office Building Association did ask for the ability oflandlor ds to profit from short-term
would run counter to the restrictions recommended by the Planning Board.
11
The neighbors whom residents may or may not know are the folk who want to use their property for short-term residential
rentals. "The Bible tells us to love our neighbors, and also to love our enemies; probably because generally they are the same
people." G.K. Chesterton.
12
http://sfist.com/2016/l 1/16/sf supes approve 60-day cap on rent.php
13
https://www.nola.gov/short-term-rentals/str-zoning-restrictions/
14
https://bouldercolorado.gov/plan-develop/short-term-rentals,
https://www.austintexas.gov/sites/default/files/files/Code Compliance/STRs/Revised Ordinance.pdf
15
Lines 38-43.
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This is different from the definition of a household in the current code, where there is a numeric limit for
the number of unrelated individuals in a dwelling unit:
Household: A person living alone, or any one of the following groups living together as a single
housekeeping unit and sharing common living, sleeping, cooking, and eating facilities:
any number of people related by blood, marriage, adoption, or guardianship;
1.
up to 5 unrelated people; or
2.
2 unrelated people and any children, parents, siblings, or other persons related to either of
3.
them by blood, adoption, or guardianship.
Household does not include any society, club, fraternity, sorority, association, lodge, federation,
or like organization; any group of individuals whose association is seasonal in nature; or any group
of individuals who are in a group living arrangement as a result of criminal offenses.
If the definition of household were to be applicable to short-term residential rental property, any household
with 6 members must be related.
Does the ZTA adequately address on-site parking?
As introduced, ZTA 17-03 would require one off-street parking space for each rental contract
unless
the
online listing indicates that vehicle parking is prohibited. This provision does not require any off-site
parking spaces if the landlord indicates that parking is prohibited. This is not likely to reduce parking
demand.
16
Zoning has different on-site parking req:uirements, ranging from zero to 2 spaces per dwelling
unit. Having one off-street parking space may not meet minimum zoning requirements, depending upon
when the unit was constructed.
The Planning Board proposal will not prevent parking problems. The Council may wish to limit licenses
to locations that provide off-street parking. The Council also could vary the parking required based on
transit availability, as suggested in testimony.
Should ZTA 17-03 be amended to allow a bed and breakfast for more than 5 guest rooms and allow for
additional meal service under certain circumstances?
ZTA 17-03 was described in the public hearing advertisement as:
An amendment to the Montgomery County Zoning Ordinance to:
modify the definition of "Household Living";
define "Short-Term Residential Rental";
establish limited use standards for short-term residential rental; and
generally amend provisions allowing for short-term residential rentals.
It created a new use (short-term rentals). Its only connection to a bed and breakfast was to exclude the
newly created use from a bed and breakfast. Staff believes that the requested amendment is beyond the
scope of the ZTA's advertisement.
16
"The more things are forbidden, the more popular they become." Mark Twain
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Licensing
Bill 2-16
Bill 2-16, as introduced, would revise Chapter 54 of the County Code. The revisions would update the
provisions for hotels, delete forms of transient housing no longer allowed by the Zoning Code
(Chapter 59), establish a less burdensome method oflicensing for Bed and Breakfast and short-term rental
establishments, and assign responsibilities for licensing between Executive departments.
This Bill anticipates the approval ofZTA 17-03 which will make Bed and Breakfast a limited use in most
residential and mixed-use zones.
Short-term residential licensing in the attached draft ofBill 2-16 would require:
>
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Compliance with Zoning
Maximum occupancy consistent with zoning
Limiting rentals to habitable rooms
A carbon dioxide detector for units with natural gas
No code violations in the past year (for new licenses)
Operating sanitation facilities
Paid taxes
Site of the rental is the primary residence of the applicant
The applicant is the owner or is authorized by the owner to apply
Posted rules and posted contact information for a designated representative
A record of guests
Notice to neighbors of the application request
Certification that the rental is allowed by the HOA, or condominium restrictions if applicable
·
Licenses issued for a one-year term
The underlined requirements were added to the draft as introduced, at the recommendation of the Planning
Board.
What is the fiscal impact of Bill 2-16?
The Executive estimates that the licensing program envisioned under Bill 2-16 would require total
expenditures of $213,947 in FY18 and $211,094 every year thereafter. The Bill calls for on-line filing
and self-certification. The first-year operating cost for Information Technology is estimated at $157,500
in FY18 and $102,500 every year after FY18.
There would be revenues from licensing fees available to offset expenditures. The Executive assumed an
annual fee of $100 per license. At that fee, and with 100% compliance, total annual revenue would be
$140,000 per year. On an annual basis, the Executive would anticipate a net cost ofBill 2-16 of $71,094
($211,094 minus $140,000).
Staff believes that this expenditure estimate is based on traditional complaint-based enforcement.
Executive
staff
from HHS will be available at the worksession to describe their needs.
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Who should enforce short-term residential licensing?
The Planning Board suggested that the Council consider having one agency responsible for both short-
term and long-term rentals. The current code splits that responsibility between HHS (transient/short-term
rentals) and DHCA (long-term rentals). The Apartment and Office Building Association recommended
enforcement by DHCA; the Department already has subpoena power.
17
The current code requires the licensing of all transient rental units; however, the focus of HHS in this area
has been on hotels. DHCA licenses long-term residential rental and administers approval of accessory
dwelling units.
Staff asked Executive staff about changing the jurisdiction of non-hotel transient housing to DHCA, but
Executive staff continues to believe that HHS is the more appropriate administrator. This will result in
two agencies issuing rental licenses of various types. In Staffs opinion, the issues concerning short-term
rentals are more like the issues surrounding accessory dwelling units than hotels.
Staff, if asked, would
recommend assigning DHCA this responsibility.
Should there be proactive enforcement of licensing requirements?
There are many activities in the County that go unnoticed. Short-term residential rentals are different in
that listings are posted (without street addresses) on relatively few on-line web platforms. There are third
party resources who, for a fee, would match valid licenses against on-line posting. The purpose would be
to assure compliance with the requirement to obtain a license.
Enforcement, or lack thereof, is critical if the County wants any regulatory control of short-term rentals.
Generally, enforcement issues are left to the Executive. In this instance, the Committee may want to have
a conversation about a proactive approach.
Should on-site inspections be required before licensing?
As proposed, licensing would be issued based on an on-line self-certification process. As proposed, it
would be easy, efficient, and inexpensive. Some testimony suggested that public safety inspections are
warranted before the issuance of a license. Such inspections are being considered in the District of
Columbia.
18
Inspections would involve time and expense.
It
would likely lead to fewer licenses, but not fewer short-
term rental units.
The Apartment and Office Building Association suggested County verification of elements certified in the
application. This too is inconsistent with an easy, efficient, and inexpensive process.
Are the noticing requirements sufficient?
As proposed, neighbors must be given notice of a short-term residential license application. Testimony
suggested that notice also be given to any non-applicant owner (which could be a landlord), HOAs,
Montgomery Code §29-6( e).
http://www.nbcwashington.com/news/local/Should-Every-Airbnb-U nit-Be-lnspected-DC-B ill-Would-Require-It-
431620733 .html
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condominium associations, and municipalities.
19
Testimony also suggests that the content of a notice
include the emergenc y contact information.
Testimony indicated that the outcome of the licensing process should be noticed and include challenges
and renewals to a license.
At some point, the burdens of noticing are greater than the benefits. This is a balancing act for the Council.
Certainly, the regulating Departme nt could post maps and contact informatio n oflicensee s and their status.
Would the requirement for action on a license or a license renewal within 15 days result in the issuance
ofa license
if
the time limit is not met?
The intent for the time limit was to provoke action.
It
was not to imply that an application was approved
unless disapprov ed within that time period. If the Council wants a process of approval unless disapproved,
it should state that intent.
Should the provision for compliance with HOA or condominium restrictions be revised?
Under the proposed licensing requirements, the applicant must certify that:
the applicatio n is permitted by any Home Owner's Associatio n or condominium document, or a
rental lease ...
20
Testimony suggested revising this provision to read: "the use [proposed] is not prohibited by any Home
Owner's Associatio n or condomin ium document or a rental lease including an occupancy agreemen t of a
housing co-operati ve."
The general rule for legislative drafting is to express ideas in the positive form.
It
is the general rule of
the English language to avoid double negatives. Is something that is "not prohibited", allowed? The
answer is yes ... but is it easier to directly find a prohibition.
Staff agrees with changing "is permitted"
to "is not prohibited".
The Apartmen t and Office Building Associatio n would have the license applicant attach the applicable
language to the application. This request seems extreme.
The Associatio n would further want a new provision that the license does not supersede any contracts
among individuals. This seems redundant to the provision that would not allow a license if it is prohibited
by such contracts.
Should there be a requirement for current HOA dues paid?
Licensed rental housing, excluding transient housing, is subject to licensing under Chapter 29 of the Code.
Those licensing provisions prohibit the issuance of a license for a dwelling unit in a common ownership
Testimony suggested adding that notice be sent to "the representative of the common ownership community designated in
the annual registration filed with the Montgomery County Commission on Common Ownership Communities pursuant to
Montgomery County Code, Section 10B-7(a)". Staff does not believe that this is necessary in code and can be addressed in
guidelines or regulations.
20
Line 471-472.
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community unless the owner certifies that the common ownership community fees for the dwelling unit
are no more than 30 days past due.
21
Common ownership communities request an identical provision for any short-term rental license.
Staff
agrees with this change to be consistent with the long-term rental license provision.
Should a licensee be required to post their license number and the state license number of their on-line
listing?
Enforcement will be easier if there is a requirement to post the County license number with the on-line
listing. Testimony also suggested requiring the host's State Vender Identification number on any on-line
listing.
22
This requirement was not included in Bill 2-16 as proposed.
Staff recommends this additional
requirement.
Are the challenges to an existing or proposed license adequate?
There is an intent to allow challenges to both bed and breakfast and short-term residential rentals. As
drafted, challenges to licenses may be limited to bed and breakfast establishments.
Staff recommends
deleting the words "bed and breakfast" in lines 493 and 495 and replacing with the word "license".
Municipalities, condominium associations, and housing cooperatives may want the opportunity to
challenge a license of a license renewal. That provision is not currently allowed in the draft Bill.
Staff
recommends including these entities in the list of parties that file a challenge (line 495).
Should the County require short-term residential rental platforms to do anything through legislation?
Testimony requested the County to require any on-line rental platform to provide a monthly listing of
units and to remove unlicensed units. Other testimony requested that on-line platforms give notice to
property managers regarding rentals at their property. The Apartment and Office Building Association
requested that platforms be required to provide a landlord with information on upcoming trip activity and
a summary year-to-date of activity at the property.
The ZTA and the Bill put requirements on the party with local property connections.
Staff views this
issue as being beyond the scope of what is before the Council.
Are the provisions for the suspension ofa license adequate?
As proposed, Bill 2-16 includes the following provision:
The license must be suspended for any applicant receiving at least three verified complaints within
a calendar year.
23
Staff intended that verified complaint mean any action found to be a violation of the license or any other
aspect of County code. Noise and trash violations would be within the intended scope of a verified
21
22
Sec. 29-19. Licensing procedures.
The state has a 6% sales tax.
23
Lines 505-506.
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