Why should Delaware Care?
Airbnbs and short-term house stays have grown increasingly popular over the years, prompting the need for local regulation around the industry. Although the state of Delaware implemented tax and license requirements this year, Wilmington has yet to decide how it wants to regulate short-term rentals, as the city’s lack of enforcement is beginning to cause challenges for both locals and operators.
New rules for Wilmington Airbnbs have been tabled after a long debate, leaving it up to a new city council next year.
Councilwoman Bregetta Fields has withdrawn her proposal that would have limited the amount of short-term rentals that operators could have in the city, among other new rules, after opponents argued the proposal didn’t go far enough.
Any new standards for the short-term home rental industry will now be left to the new administration of Mayor-elect John Carney and a city council that will have three new members.
“The committee chair [Maria Cabrera] promised me she would work on this,” said Fields, who will end her term this year, during a city council committee meeting early this month.
When Fields introduced the proposed rules last month, she said they were meant to be a more balanced approach to regulating hosts and residents than what were previously proposed in April, which also had been withdrawn amid opposition.
Still, her attempt at a compromise failed as residents, largely in the Trolley Square area, said categorically that short-term rentals shouldn’t be located in neighborhoods.
“I bought in a residential zoning because I wanted to be residential, I did not want any commerce in my neighborhood”, Trolley Square resident Bridget Storm said during the December city council meeting.
Storm was one of many voices opposing Fields’ ordinance. That public backlash had been sparked in part by an October house party at an Airbnb on Shallcross Avenue that resulted in the assault of a neighbor.
Beyond limiting the number of homes a person could rent out, Fields’ ordinance would have also required operators to apply for permits, complete a short-term rental class, and follow new health, safety and noise control rules.
Finally, it would also have raised revenue for the city by mandating that short-term home operators pay a 2% lodging tax per booking, a $75 annual permit fee, and maintain a $1 million liability insurance policy.
Fields’ ordinance followed her initial April proposal, which was co-sponsored by 8th District Councilman Nathan Field.
Under the original ordinance, owners faced a 3% lodging tax, corporate entities were prohibited from owning short-term rentals and owners were limited to one property, which they also were required to live in.
Unlike the original ordinance, Fields’ new proposal allowed artificial entities like corporations and LLCs to have up to six properties and made it so operators would not have to live in the homes they were renting out.
But thoughts on how the industry should be regulated remain divided.
The need for regulations
The city’s discussion around short-term rentals started with Councilwoman Fields’ April proposal.
Fields said the idea first came up about two years ago when she noticed an influx of short-term rentals in her district.
Recognizing the potential impact of short-term rentals on neighborhoods — such as parking disputes, noise disturbances, and the use of city services like trash collection and emergency response — she realized many rentals were operating without registration, taxes, or permit fees.
But, the April legislation was seen as restrictive to those who had short-term rentals in the city, prompting Fields to table the legislation before it went to committee so that she could engage with more community members and council members about the implications of the proposal.
Fields said the concerns from locals primarily revolved around noise disturbances, trash, parking, and residents wanting advance notice when short-term rentals appeared in their neighborhoods.
Given the feedback she received and her own opposition to requiring owners to live in their short-term rental properties, she decided to recreate the ordinance altogether.
Neighbors want greater oversight
Fields introduced her newest proposal in late November before it went to the Community Development and Urban Planning committee on Dec. 2.
Opponents of the proposal, including 2nd District Councilwoman Shané N. Darby and At-Large Councilman James Spadola, commented on the limited time they had to review the significantly revised ordinance.
But Councilwoman Fields and At-Large Councilwoman Maria Cabrera argued that the topic has been an ongoing discussion since early this year.
During the committee meeting, over 30 people spoke during public comment, voicing their opinions on the legislation. Those in favor were mostly Airbnb hosts, with a few residents who supported having Airbnbs in the area.
Most residents who opposed lived in the 8th District, which Councilman Field said has the highest number of Airbnbs, likely explaining why most reported issues come from there.
The city does not currently have a system in place to track how many short-term rentals are within its limits. In addition, the short-term rental platforms do not provide the address of a unit until it’s booked but instead an approximate area and will only disclose the first name of a host.
According to Airbnb’s website, there are more than 200 options in the area of Wilmington, while VRBO, another short-term rental site, contains about 50.
But residents highlighted concerns that guests who cause issues during their stays, leave neighbors to deal with problems when hosts are absent, potentially putting them in dangerous situations and creating an unfair burden on the community.
“I guess you want to regulate, but who’s really gonna watch over it? Me, the other neighbors, we’re gonna have to look and see if there is a violation,” asked Michelle Shane, a Trolley Square resident.
The Wilmington Police Department has received about eight complaints in the last three years regarding short-term rentals, according to John Rago, deputy chief of staff for the mayor’s office.
But Councilman Field and other residents also argue that the ordinance conflicts with the city’s existing zoning.
According to Chapter 48 of the city code, the residential district zones R1 through R5 do not permit short-term rentals but instead permit bed-and-breakfast facilities which require the owners to live in-house.
However, with some hosts owning over 20 short-term rental properties in Wilmington, the city is not actively enforcing the code. WPD has sent cease-and-desist orders to seven short-term rental units in the city in total.
This issue has created uncertainty and disagreement around whether existing owners should be grandfathered in, allowing them to operate with their current number of properties — a policy that supporters wanted to enact.
“There are people who have made significant investments in Wilmington to purchase homes and use them as short-term rentals,” Cabrera noted.
Entrepreneurs support option
Residents in favor of the ordinance say that they have only had experiences with friendly guests or professionals who come to the city and engage with the community in a positive manner.
Many hosts highlighted that they often house professionals, such as doctors and nurses and families experiencing tragedy who need to be close to their loved ones.
“Our guests are people who value the comfort of a home away from home,” said Dr. Katina Clarke, a local Airbnb host.
Other hosts went on to say that their businesses contribute to the city’s economy by employing other people who pay taxes and having guests shop and eat in the city.
But many of the hosts spoke about how they depend on their short-term rental businesses for their livelihood, and wouldn’t be able to pay for their own necessities.
“I’m a city employee, obviously I don’t make a lot of money and what we make off our Airbnb actually helps me pay both of my mortgages,” said Susana Casado, a city resident who has been an Airbnb host for over 20 years.
Some in favor believed that putting the regulations in place would have mitigated some of the issues that others spoke about.
But by the end of the meeting, Fields decided to withdraw the legislation after losing half of the committee votes, which included President Trippi Congo, Darby, Spadola and Field.
But she said her main reason for holding the proposal came from the need to closer analyze its fiscal impact.
What do future leaders think?
Incoming elected officials believe the matter of short-term rentals requires more discussion.
Christian Willauer, who is taking Councilwoman Fields’ seat for the 5th District in January, was present for the committee meeting and spoke against Fields’ ordinance, highlighting the negative impact that Airbnbs could have on the availability of homes for long-term residents.
“We have to make sure that we are not transforming too much of our housing stock into short-term rentals because there are people who need homes full-time in the city of Wilmington,” she told Spotlight Delaware.
Her position on the issue may further shift the perspective of the council’s whole toward a more restrictive approach.
The city’s incoming mayor, Carney, also has the objective to keep neighborhoods safe, which his office said will be his top priority when assessing the issue.
This year Carney signed House Bill 168, which imposed a 4.5% state tax on all short-term rentals statewide and required operators to obtain an occupational license.
“There needs to be a balance between welcoming tourists, showing off the great things happening in the City, and most importantly – supporting our residents and making sure they feel safe,” said officials from Mayor-Elect Carney’s team office.
But until Wilmington’s newly elected officials create a new proposal, the short-term rental industry will continue to run unregulated within the city.
The post Wilmington’s Airbnb policy to stay in limbo until next session appeared first on Spotlight Delaware.