COURT HOUSE – Middle Township Committee adopted an ordinance July 18 that sets licensing requirements and fees for short-term rentals booked through online platforms like Vrbo and Airbnb.
Middle joins the ranks of several county municipalities wrestling with the burgeoning phenomenon of short-term rentals expanding outside the traditional hotel and motel market space into units dispersed through residential neighborhoods.
The ordinance defines a short-term rental as a dwelling rented for 90 days or less. In most cases, short-term rentals through online platforms are for considerably less than 90 days, posing the potential problem of rapid turnover of renters in a neighborhood.
AirDNA, a short-term rental data analytics firm, currently shows 75 available properties in the 08210 zip code for Court House.
The ordinance establishes a licensing requirement on short-term rental space and a $250 license fee. It also extends the 3% municipal tax currently placed on municipal hotels and motels.
Mayor Timothy Donohue said it was important to “level the playing field” between short-term online rentals and traditional short-term space in hotels.
The rental license, as defined in the ordinance, is for one year and is renewable for annual periods. The application process is described in the ordinance, as well.
The state and municipal tax requirements of the ordinance do not apply to short-term rentals through real estate brokers. Also exempt are arrangements made directly between a host and a renter without the intervening use of an online platform.
The principal reason given for the municipality’s action is public safety. Donohue spoke of the potential liability to the municipality and its taxpayers if tragedy struck at a short-term rental unit that the municipality had not regulated or inspected for fire and other safety concerns.
Donohue also emphasized the need for the municipality to recover the cost of inspection and other municipal services through a license fee.
Other factors driving the municipal action were concerns raised by neighborhood residents. One such concern is competition for parking with permanent residents. The ordinance provides that each rental unit is limited to one vehicle for street parking.
The ordinance requires accessibility to a property manager at all times. It also limits rentals to renters 21 years old or older.
Donohue spoke of the need to strike a balance between the ability of people to rent out excess living space and the rights of neighborhood residents to maintain their quality of life.
The mayor added that the ordinance represents an attempt by the municipality “to get our arms around the issues,” noting that experience with the ordinance may bring further changes in the future.
“Right now, we don’t even know where these units are,” Donohue said.
The issue of short-term rentals has become a countywide concern. In Upper Township, residents are calling for more regulation of such rental space. To the far south, Cape May recently passed its own ordinance governing such space and adding the same 3% occupancy tax that Middle is imposing.
Middle is not as much of a tourist town as the island resorts, but there is evidence that online short-term rentals can be a tourism boost.
Two short-term rental owners spoke at the public hearing on the ordinance. Both were critical of aspects of the ordinance but appeared resigned to its passage.
One change in the ordinance from the version that was introduced June 22 related to the penalties. When introduced, the ordinance set potential fines imposed by the court at up to a $2,000 penalty “per day that the violation exists.” The ordinance, as adopted, changed the maximum fine amount to $1,250.
To contact Vince Conti, email vconti@cmcherald.com.
