Proposed program sets fee at $400 for short-terms, twice as much as average

(Nov. 8, 2019) Short-term rentals in unincorporated areas of Worcester County could have to pay an annual license fee of $400, more than double most rental license fees in surrounding areas, if this aspect of a new rental license program is approved by Worcester County Commissioners.

The rental license program itself was agreed to by commissioners on Aug. 20, and although its implementation and the license fee schedule were to be reviewed by the commissioners Tuesday, the discussion was tabled because of the absence of Commission Bud Church, who represents West Ocean City.

In moving to table the discussion, Commissioner Joe Mitrecic suggested that accusations had been made that the rental license proposal had been quietly added to the agenda over the weekend.

Mitrecic

Joseph Mitrecic

“This was in the packet on Thursday afternoon for anybody to read,” Mitrecic said. “It will give those people who had concerns to contact their commissioners as there will be no public hearing.”

According to the proposal, the yearly license fee could be up to $400, depending on the type of rental. Properties that would pay $400 annually are short-term rentals, mobile home parks and bed-and-breakfast establishments. Hotels, motels or campgrounds would pay $5 per room or site, at a minimum of $250. Paying $100 annually would be those who keep of roomers or boarders, rentals greater than 28 days and group homes and assisted-living facilities where units are individually owned and rented. 

Ed Tudor

Ed Tudor

In comments after the commissioner’s meeting, Sarah Rayne, government and public affairs director for the Coastal Association of Realtors, said the $400 annual license fee is unreasonably high.

In Ocean City, which would not be affected by the county’s program, the rental license fee is $116, with an added $25 for a noise control permit.

Like Worcester, Wicomico County does not have a rental license program, but the city of Salisbury does. Its license fee is $120, but according to Amber Eure, administrative records clerk for Salisbury, there are no short-term rentals in the city and no way to tell how many long-term rental licenses have been distributed. 

According to each of its county government websites, Montgomery County charges $114 per unit for a single-family rental license. Prince George’s County charges short-term rental licenses at $150 and single-family unit rental licenses at $115 for two years. 

“In those municipalities, they inspect every residential rental, so they have staff going to every single rental,” Rayne said. “That’s covered in that rental licensing fee. The county’s not inspecting every single rental. They’re only doing that on a complaint basis. They’re charging more than double of what the average licensing fee is and it’s not really adding up when you look at the costs that they need to cover.”

Two major costs need to be covered — two additional staff to facilitate the program and then the software program to track the rentals. The initial cost of the proposed software, Munis CSS, would be $50,492, with another $39,200 for implementation.

The latter, however, might not cost quite that much, as county staff is familiar with the software, said Ed Tudor, director of review and permitting. Annual maintenance for the software is $11,736, meaning that in total, the software will cost over $60,000, at least.

Rayne suggested that the license fee could be reduced to a more reasonable amount if the software didn’t cost as much. She said most rental license fees are between $150 and $200, and hope to see Worcester fall somewhere between those numbers. She and the Coastal Association of Realtors commended the decision to table the issue and give the public more time to contact county commissioners.

According to Tudor and County Treasurer Phil Thompson, the proposed rental fees would more than cover the two county staff additions and the software expenses. The department determined that it could issue 400 to 600 licenses for short-term rentals a year, generating $160,000 to $240,000.

Tudor said there is no way to predict how many long-term rentals will apply for licenses, and that those will not generate much revenue compared to short-term rentals.

The commissioners set no date for when they will revisit the issue.

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