New! On October 10, 2017, the County Council adopted zoning text amendment (ZTA) 16-03, and Bill 2-16 to define short-term residential rentals and to establish limited use standards and licensing regulations. The ZTA will become effective on July 1, 2018. The Montgomery County Department of Health and Human Services will be responsible for licensing and enforcement; please direct questions to that agency.
With the rise of the sharing economy, and the economic and social benefits to residents of sharing resources, short-term rental activity continues to grow. This increased activity has led the Montgomery County Council to work toward modifying short-term rental laws, and prompted an examination of parameters to regulate short-term rentals and establish a pathway to legalize this activity. Currently, the County’s Zoning Ordinance does not allow for short-term residential rentals of less than one month, unless the home has been approved for use as a Bed and Breakfast. Bed and Breakfasts are only allowed in detached houses, and they are subject to specific standards.
In May 2015, County Council enacted a bill (Expedited Bill 14-15) that requires short-term renters to pay the same tax required of hotel guests. In February 2016, the Council introduced proposed legislation (zoning text amendment ZTA 16-03) to allow short-term residential rentals under certain parameters. The ZTA was introduced in conjunction with Bill 2-16, which would update the licensing requirements for all transient housing, including a bed and breakfast.
The Planning Board suggested a different approach to ZTA 16-03, but advised the Council that very little time was provided for the community to discuss the issue (view the transmittal letter and staff report). After holding a public hearing on ZTA 16-03 and Bill 2-16, the Council asked Planning Department Staff to reach out to the community and other stakeholders for feedback on short-term residential rental (STRR) agreements, such as Airbnb, Flipkey, Homeway, and VRBO, in order to help draft legislation affecting this use. The Council has directed the Planning Department to research best practices across the country and reach out to County residents and stakeholders to provide opportunities for their input in establishing new regulations.
Some critics have noted that widespread conversion of residential housing to short-term rentals, when taken to extremes, could result in the loss of housing for permanent residents. The overall intent of any proposed legislation is to strike a balance in recognizing the demand for short-term tenancy of residential property, while minimizing negative impacts on the residential character of existing neighborhoods.
Online services such as Airbnb, Flipkey, Homeway and VRBO are short-term residential rental companies that connect homeowners and property managers with travelers who seek the amenities of a home for a short-term rental stay.
Airbnb is an internet-based incarnation of a bed and breakfast. Airbnb and other similar on-line short-term residential rental companies allow the occupants of a housing unit to advertise their willingness to rent an entire residence, or room or space in the residence, for any duration; rentals could be as short as one day, but are generally for fewer than 30 days. Homeowners or tenants renting space to Airbnb users would still be required to obtain a County license allowing “transient visitors.” This type of use is considered “accessory” to the primary use of the property as a residence. A Bed and Breakfast is considered a “Commercial” use under the “Lodging” category of the Zoning Ordinance; thereby allowing rental of rooms as the primary use. The owner of a Bed and Breakfast must also reside on the premises.
Bed and Breakfasts are allowed as a “limited” use in the following zones: AR, R, RC, RNC, RE-2, RE-2C, RE-1, R-200, CRN, CRT, GR, NR. As a limited use, a Bed and Breakfast must satisfy a number of requirements including:
*For a complete list of the requirements for Bed and Breakfasts, refer to the Zoning Ordinance (Section 3.5.6.B)
A short-term residential rental (such as those listed on Airbnb) may be legal if:
1. The home, or part of the home, is rented out on a monthly (or longer) basis.
2. The home has been approved by the County for use as a Bed and Breakfast.
A bill related to STRRs has been introduced in the Maryland State legislature.
Many cities have adopted laws regulating short-term residential rentals (STTRs). This study commissioned by Asheville, North Carolina, provides a useful summary of laws adopted in cities across the United States. Counties have been slower to adopt STTR laws. Arlington County recently passed a law to allow and regulate the use. Learn more about the new Arlington County regulations. Fairfax County treats STTRs as bed and breakfasts that require special exception approval. Learn more about the Fairfax County law.