The Gaithersburg City Council on Monday began laying out regulations for short-term rental properties, including a 2% tax on properties with 10 rooms or fewer.
The city defines a “short-term rental” as a furnished home, condominium or apartment rented for 30 days or less.
The regulations would institute a requirement for the property owner to have a license, prevent more than two adults from occupying any rental room and cap the total number of rental days per license period at 120. They also would prohibit the use of rentals for private or commercial activities and ensure that all applicable local taxes and fees are collected.
Gaithersburg and Rockville currently tax all hotels with more than 10 rooms at a rate of 2%, but smaller rental properties are exempted.
The municipalities now have the authority to apply the tax to rental properties, such as Airbnb, due to a law the state legislature passed this year. State Del. Julie Palakovich Carr, a Democrat representing Rockville and Gaithersburg, sponsored the bill.
The Rockville City Council is also scheduled to begin examining its regulations on short-term rentals at its Oct. 7 meeting.
Gaithersburg Council member Neil Harris said Monday that the taxes would likely only net the city a few thousand dollars per year in revenue, but the purpose of the regulations is to determine how many rental properties there are and where they are.
During the public comment portion, resident Marie Day said she found only 9 Airbnb rentals in Gaithersburg.
“Is it really that big a deal?” she asked.
Mayor Jud Ashman replied that the council once counted more than 100, but the number can vary from day to day. The regulations also apply, council members noted, to properties other than Airbnb rentals.
One woman said the costs for the owner, such as the license fee and inspection fee are significant when added together.
“Those costs start to add up, and it makes it a bit unfair to say… ‘Oh, you’re being compared to a hotel,’” she said. “I get the argument, but it’s comparing apples to oranges to a certain extent.”
She also said she didn’t understand the reason behind the cumulative 120-day rental limit.
“If I as a homeowner choose to do that on my property, why wouldn’t the same things apply,” she said.
Council member Mike Sesma said in response, other cities around the country, including the District of Columbia, have had trouble with losing housing stock due to homeowners turning their properties into rentals, prompting the need for more regulations.
“We’ve seen it in the district, where legislation has been passed to preclude people from buying properties … solely for the purpose of making them short-term rentals and taking them off the market,” he said.
The city council is scheduled to hold another policy discussion on Oct. 21.
Dan Schere can be reached at Daniel.schere@moco360.media