Lewes aiming to tackle short-term rental issues

For its inaugural meeting June 14, the Lewes Short-Term Rental Ad Hoc Committee welcomed Jeffrey Goodman, owner of JB Goodman, who specializes in short-term rental research in a variety of different markets across North America. Committee members talked about their goals of establishing policies that benefit all residents of Lewes. 

Committee member Don Long said he believes a universally appealing outcome is possible for residents, businesses, and owners and customers of short-term rentals. His primary concerns for residents are disappearing parking spaces and the rising cost of rent and homes, which he said forced his neighbor to move out. Long said he would like to find an equitable solution for short-term rental owners and residents. 

Committee member Tonya Flickinger, serving as a voice for short-term rental property owners, said she plans to have an open mind. Flickinger is interested in understanding the concerns people have about short-term rentals. She personally operates a Vrbo, and throughout the meeting, she educated committee members on her record-keeping procedures and the personal steps she takes to ensure her guests fit appropriately at the house, including the parking provided.

Currently, Lewes does not have a policy to enforce short-term rental regulations. The city has a gross rental receipts tax, regulations for commercial businesses, fire codes and its own code to use as enforcement, but actual regulation of each short-term rental property is limited to private property enforcement. As long as an individual is compliant with residential code, there is no recourse for actions that may be considered disorderly, destructive or a nuisance. 

Goodman said policies could be implemented to regulate short-term rental properties similar to enforcement of hotels, motels and traditional bed-and-breakfast establishments. Licensing, Goodman said, is a powerful tool in regulating short-term rentals because it establishes a permit that can be referenced moving forward. Permits not only create an additional revenue stream, but also have baseline operational standards the city can attach, Goodman said. Permits and licenses for short-term rentals have become standard across the country, Goodman said, and they would allow the city to define a short-term rental, eliminating operations incapable of meeting legal requirements for safe housing and parking.

When asked about regulations for different zones, Goodman said other cities with unique areas have different rules for each zone, and those can be addressed through ordinances. Councilman Khalil Saliba specifically discussed parking, which can be a strain in some areas of Lewes. He noted there is not much of an issue on Lewes Beach.

Goodman said sound meters can be installed in the historic district to alert an owner when decibel levels have been exceeded, quelling noise concerns in an area known for its quiet nights. Going further, fines could be assessed if the city chooses to tie permits for the short-term rentals to noise meters.

Licensing a rental property costs $83 and, like the gross rental receipt tax, it is assessed to short-term and long-term rental properties. According to City Manager Ann Marie Townshend the tax is assessed on each rental transaction, meaning long-term renters contribute to the tax once a month while a short-term rental will contribute every time the property is rented out. Committee members discussed adjusting the tax, currently at 5%, and establishing rates for short-term rentals and long-term rentals. Townshend said the revenue from the tax has increased substantially over the last few years, but committee member Winnie Kee warned that as the world opens up following the pandemic, people will begin to travel farther and farther, cutting into the increase in tourism.

Committee members and officials agreed to look further into the income from the tax and if it is covering the uptick in expenses caused by the influx of people. Adjusting the rate for short-term rentals to be higher than long-term rentals could have an adverse effect of scaring visitors away, and the frequency of rentals may already be paying for the increase in city services.

Adriane Gallagher, a Realtor and property manager with Gallo Realty, said there should be delineation between services like Airbnb and what she provides with her short-term rentals. Gallagher said her rentals are a three-night minimum, and in the summer, they usually become seven-night minimums.

“I think the people that come here for a week take a great value in this town. I've got people that have been coming back here for 30 years, and they feel like their rental house is their second [home],” she said.

The veteran property manager said her clients demonstrate a genuine appreciation for the city, and she notices how much they care because of how well they maintain the property they rent. She believes the best solution is for Lewes to develop a permitting system to control the arrival of people, not discourage them from coming entirely. 

The goal is to provide recommendations to mayor and city council this fall, with plans to have something enforceable on the books in 2023. The next meeting of the short-term rental ad hoc committee is set for Tuesday, June 28.