Planning Commission OKs Ocean City employee housing code changes

Reduced parking requirements would call for one space for five occupants, or two spaces for three bedrooms

The Ocean City Planning and Zoning Commission unanimously endorsed amendments to the employee housing code, adding several new stipulations, at their meeting Tuesday night.

The amended code proposal will be forwarded to City Council for its approval.

“Our end goal is to get this adopted by council, if at all possible,” said Bill Neville, Ocean City’s director of planning and business development.

Since 2022, the commission has planned revisions for the employee housing code to incentivize developers to build more housing and expand the living options for seasonal workers.

Covid exacerbated a seasonal-worker housing shortage as landlords shifted from employee housing to more profitable vacation rentals.

At its last meeting on May 2, the commission held a public hearing for a draft of the code, heard three recommended adjustments handed down from City Council and discussed other potential changes.

Neville took into account the May 2 meeting comments to create a new draft for Tuesday’s meeting. In it, Neville gave a list of options for the commissioners to choose from and add to the employee housing code.

Out of the seven recommended options, the commissioners voted to approve the first five.

Recommendation one confirmed that drafted parking requirements should remain unchanged, which was a focus of debate among commissioners on May 2.

The draft states that employee housing must provide two spaces per three sleeping rooms, or one space per five employee residents, whichever is greater. The Board of Zoning Appeals can make special exceptions for parking capacity.

The second recommendation, which was based on a City Council concern, makes it so supplemental regulations apply to new employee housing projects when employee housing incentives are used.

This clarification is intended to prevent non-employee housing projects from taking advantage of employee housing-related incentives.

Recommendation four sets the minimum age of all onsite employee housing managers at 21 and older.

The fifth recommendation states that any bedroom with an exterior wall must have at least one window, which is based on a May 2 comment from Glenn Irwin, the former executive director of the Ocean City Development Corporation.

Neville also conceived of a new idea to help settle concerns raised about employee housing proximity to existing residential zones.

Planning commissioner Palmer Gillis reiterated worries that the draft’s parking code, and potential exceptions permitted by the BZA, may cause disturbances to spill over into residential districts.

Employee housing is not allowed in R-1 single-family residential districts, but homes there could be near or next to employee housing.

Gillis noted that 76 percent of the island would be affected by the code and floated the idea of eliminating R-2 medium residential districts and R-3 general residential districts from the plan with the possibility of adding them as potential employee housing locations later on.

“I hate impacting our existing residents,” Gillis said.

Commission Chairperson Joe Wilson disagreed, stating that there are some R-2 and R-3 districts that don’t touch R-1 districts, and worried that such a change would defeat the purpose of incentivizing developers.

“I think trying to streamline a process for potential developers is the way to go and limiting them is not,” Wilson said.

Neville offered the idea that maybe the R-2 districts should only allow tier 1 projects, then R-3 could only allow tier 1 and tier 2, and the largest projects would only be able to go into districts rated higher than R-3.

“R-2 can be kind of the buffer zone, but still going to protect the R-2 people too, so anything beyond that (would be) more of a conditional use,” said Commissioner Janet Hough.

The draft presented on May 2, included a tier system that provided avenues for approval based on the number of occupants in employee housing.

Tier 1 included employee housing with 16 or fewer residents and would require only a building permit and rental license process. Tier 2 included housing with 60 or fewer residents and would require a site plan approval on top of the building permit and rental license. Tier 3, housing with more than 60 residents, would have to go through the zoning code’s conditional use process along with all other processes required in Tier 2.

In the final vote, it was decided that only tier one employee housing would be allowed in R-2 and R-2A low-density multiple-family residential districts, and R-3 districts would allow tier 1 and tier 2 housing.

Tier 3 housing would only be allowed in LC-1 local commercial districts and other commercial districts.

The commissioners also changed tier 2 housing to hold 16-40 residents rather than 16-60 and added conditional use (the applicant must adhere to certain specific requirements) to the process of approval on top of site-plan approval, building permit and rental license.

This story appears in the May 19, 2023 print edition of the OC Today.