Short-Term Rental Violations Have Council’s Attention

Short-Term Rental Violations Have Council’s Attention

Enforcement suffers because of lack of resources

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Flats-8300

Flats 8300 in Bethesda

Photo by Kate Masters

This story was updated on Dec. 6 at 10:45 a.m. to clarify a statement by Kenny Welch

A council committee is seeking solutions after a Bethesda Beat investigation found that Montgomery County can’t enforce more than 1,000 potential short-term rental violations.

The council’s Planning, Housing and Economic Development committee took up the issue this week, calling for collaboration between two county departments: Health and Human Services, which handles short-term rental enforcement, and Housing and Community Affairs, which handles other housing code violations.

HHS has identified 1,681 short-term rentals in Montgomery County on Airbnb and other sites, Clark Beil, a senior administrator for licensure and regulatory services, said in November. 

But there are only 204 active licenses in the county. Another 28 were in the process of being approved at the time.

Several flagged rentals were unlicensed and illegal under the county’s short-term rental legislation, which prohibits buying or renting a unit solely to list it on sites such as Airbnb.

They included luxury apartments in downtown Bethesda operated by out-of-state property management companies. Several were listed in the Flats 8300 apartment building on Wisconsin Avenue.

Many of those listings appear to have been pulled from Airbnb. But both Bluebird Suites and Churchill Living, two property management companies with listings in Bethesda, still include Flats 8300 as an available location on their websites.

The “proliferation” of short-term rentals, as Council Member Hans Riemer described it Monday, has become a growing concern for county residents. 

Katya Marin, an East Bethesda homeowner who’s flagged several illegal Airbnb listings, has said it contradicts the county’s purported commitment to providing and maintaining affordable housing.

A recent study posted on the academic site Social Science Research Network found that an increase in Airbnb listings decreased the supply of long-term rental units and had a small but measurable effect on rental and home prices.

“It’s clear this legislation has run amok and they can’t really enforce it,” Marin said in a phone interview last month. “It’s impossible to see how these units will ever become affordable if companies can list them for hundreds of dollars on Airbnb with no consequences.”

A lack of resources severely limits the county’s ability to enforce its short-term rental laws. Kenny Welch, the manager of licensing and regulatory services for HHS, said on Monday that “there’s currently no staffing” to support the department’s enforcement program.

When the legislation was passed in 2017, council members funded a single part-time support position, which has never been filled. Without a designated employee, Welch and Beil have fielded hundreds of potential violations that come through resident complaints or a software program that sweeps the internet for local short-term rental listings.

Council Member Andrew Friedson questioned why HHS — a sprawling government agency that handles everything from restaurant inspections to social services and mental health treatment — was tasked with handling the short-term rental market.

Riemer, who wrote the 2017 legislation, said it was because HHS already handled hotel inspections.

But employees are struggling to manage the department’s increasing workload. At Monday’s committee meeting, Welch said HHS doesn’t have enough workers to independently inspect hotels or bed-and-breakfasts, and only makes site visits if a customer complains to the department.

The department made in-person visits if they related to a health or safety hazard, Welch said. The policy applies to hotels, bed-and-breakfasts, and — in limited cases — Airbnb listings. On one occasion, an inspector visited a short-term rental after the online listing showed a single room stacked with at least five bunk beds.

But HHS is poorly equipped to respond to zoning code violations, including unlicensed short-term rentals or entire homes and apartments being rented on Airbnb. In those cases, the department rarely follows up on complaints, Welch said.

“We don’t have the resources to look for unlicensed facilities,” Welch said. “If it’s a health and safety issue, we’ll go out and do an inspection. But that’s pretty much all.”

The department’s software program automatically issues warning letters to unlicensed units. Welch told Riemer that property owners filed for a license “95% to 98% of the time” after receiving a letter, which appears to contradict the county’s own statistics.

Welch and HHS spokeswoman Mary Anderson clarified Friday morning that Welch was referring to the percentage of property owners who applied for a license after receiving a letter driven by a resident complaint — not the total number of letters generated by the software system.

In November, Anderson said around 35 residents have called the county’s 311 line to complain about a violation or submitted a complaint directly to the department.

“We have not previously tracked how many properties obtain licenses as a result of complaints received due to illegal operation for which we issue a violation letter,” Welch wrote in an email. “For those that we got a complaint and sent a violation letter, for the most part they get a license or stop operating.”

HHS can also issue citations, which come with a $500 fine, or even take a property owner to court for violating the law. In November, Beil said the department has never issued a citation for a short-term rental violation.

Friedson questioned the department’s explanation for how it would handle court cases. HHS doesn’t send out inspectors for licensing violations, so witness testimony would have to come from a neighbor who complains, Welch said.

That’s different from other agencies, including the Department of Housing and Community Affairs, which sends out inspectors who can later appear in court over housing code violations. 

Friedson looked quizzical when Welch explained the process.

“So … requiring a resident to show up in court to testify against their neighbor, to say that their neighbor is running an illegal operation in their neighborhood or in their building?” he asked.

“I’ve just always been puzzled by the idea that HHS should be responsible for this,” he said later on at the meeting.

The council would likely have to address the lack of resources during the budget cycle for fiscal year 2021, Riemer said. He suggested a memorandum of understanding between HHS and DHCA that would allow the latter’s housing code inspectors to visit short-term rental sites.

But DHCA also lacks the capacity to enforce the violations, Director Aseem Nigam said. The agency recently hired five new code inspectors and was hiring five more, to bring total staffing to 35. 

Those employees were hired to manage the department’s current workload and enforce the county’s recently passed accessory dwelling unit law, which goes into effect in January, he added.

Riemer asked both agencies to figure out what it would take to pursue short-term rental violators who didn’t respond to letters asking them to comply with the county’s legislation.

“We need to be clear for the coming budget whether we have the resources to enforce this,” he said. “This is a market that’s growing, and that’s why we stepped in to regulate it.”

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