Legislation regulating and taxing short-term rental properties finally came before the Annapolis City Council for public comment Monday, but some hosts called it too restrictive on their businesses.
Hundreds of short-term rental hosts use platforms like Airbnb, VRBO and Home Away to find guests and rent space to supplement their income or support an investment.
Tracy Tischer said the proposed regulations are too restrictive on owner-occupied rentals. Tischer runs a short-term rental property in West Annapolis, where she rents as a “superhost” with Airbnb.
“I rely on AirBnb income to afford my mortgage and property taxes as well as save for retirement,” she said.
She opposed rental licenses for owner-occupied spaces because of the potentially high cost of licensing and upgrading home features like smoke detectors.
The proposed legislation — sponsored by Alderman Ross Arnett and Alderwoman Sheila Finlayson — restricts the kinds of places and the total amount of nights property owners can rent out.
The space would have to be either a principal residence or a residential area on top of a commercial or maritime business. Hosts could rent space for a maximum of 120 days per year while they are absent, under the legislation. Additionally, no single tenant could rent for more than three months.
The legislation offers a carve-out for those renting during the boat shows and Naval Academy commissioning week. People hosting exclusively for these events would not be required to get a short-term rental license
Michele Cordle, with the Anne Arundel County Association of Realtors, distributed a petition to oppose the legislation. Cordle agreed with the added taxes and regulation but opposed the limits on rental nights.
“The City of Annapolis has too few hotel rooms to accommodate the estimated two million visitors each year,” the petition reads. “…It is okay to require better regulations, added taxes and short term rental licenses. Just don’t restrict an entire industry to the point where it no longer benefits the local residents nor the businesses!”
Most of the hosts who spoke supported regulations and licensing, but opposed restrictions on the number of nights available to rent and the kinds of spaces available to rent.
Arnett and Finlayson have been working for the last few years on legislation to regulate and tax short-term rental spaces, which drew $13.6 million in revenue in 2018 in Annapolis alone. These properties are not taxed under the Anne Arundel County hotel occupancy tax.
If short-term rentals paid the tax, as the proposed legislation mandates, the city would see part of a projected $1.7 million in additional revenue.
Short-term rental laws have cropped up across the state, consistent with the rise of the booking platforms. Baltimore City, Prince George’s County and Montgomery County governments all approved regulations in the last two years. The number of short-term rental properties in Annapolis has more than doubled since 2016.
Hosts would have two years to comply with the legislation from its date of passage.
The legislation passed on first reader on June 10. It will now go to the City Council standing committees for further study and possible amendment.
The City Council also passed the budget for fiscal 2020, which begins July 1.
