This Delaware beach town is set to regulate short-term rentals. 5 things you should know

One Lewes couple said they’ve lived in the quaint, historic beach town for more than three decades, but it wasn’t until more recently that they started to see their neighborhood change.

As more of the homeowners on their street began to offer short-term rentals through sites like Airbnb and Vrbo, they noticed that their quiet community would drastically switch from a near “ghost town” to “busy beach town” within the turn of a weekend.

Knowing that Lewes typically has more year-round residents than many of its neighboring resort towns, another resident who commented at a city meeting last year said he worried that the sense of community in Lewes would start to break down if short-term rentals soon dominated.

These residents all had concerns about how these rentals would affect their quality of life – from pressures on parking to issues with trash or noise – if the city of Lewes did not specifically regulate short-term rentals. And they weren’t alone.

For at least the past year, the Lewes City Council, the city manager and a designated short-term rental committee have been discussing how to manage these rentals and ensure they do not add costs to the city, especially for trash and recycling collection, beach maintenance or the Police Department.

“We welcome visitors. It’s not intended to say that we don’t welcome visitors,” said City Manager Ann Marie Townshend, who presented at a meeting last September when the short-term rental discussion began.

“It’s just that there are costs to the community, both out-of-pocket costs and quality-of-life things, that we need to look at how we can manage so that we protect the quality of life and also protect the tax dollar,” she said at that earlier meeting.

Now, the city is ready to consider a new ordinance. On Monday, the Lewes City Council set a public hearing for Oct. 3 to discuss the new ordinance that distinguishes short-term and long-term rentals and establishes certain rules for each.

Here are five things to know about this new ordinance.

How does Lewes define a short-term rental?

If someone rents their home or part of their home for 30 consecutive days or fewer, then the residence is considered a short-term rental under the amended code.

A home that someone rents for more than 30 consecutive days – and isn’t regulated as a hotel, motel or other facility already identified elsewhere in city code  – would then be considered a long-term rental.

HOMES FOR SALE:10 most expensive homes for sale in Delaware offer beach views, home theater, horse stable

Under the proposed fee schedule, short-term and long-term rentals would pay the same $200 annual fee for rental licenses.

Both types of rentals would also face the same fines for violating the requirements of their license: a written warning on the first violation, $250 in fines on the second violation, and $500 in fines and revocation of their license on the third violation.

What distinct rules would apply to short-term rentals?

While some of the same regulations would apply to both short and long-term rentals – such as requiring smoke and carbon monoxide detectors, prohibiting owners from running any kind of business in these rentals, or using a recreational vehicle as a rental – Lewes has identified some specific rules for short-term rentals.

For example, the city proposed a maximum occupancy of two people per bedroom plus two more people for short-term rentals. Children under the age of 6 are not counted.

A designated local contact person would need to be available 24 hours a day to accept phone calls when the short-term rental is occupied. That contact person should be able to respond physically to the rental within a “reasonable time period” that doesn’t exceed two hours, according to the new ordinance.

To make sure all this information is visible, every short-term rental would have to post a document inside the residence that includes the property’s rental identification number, maximum occupancy, location of off-street parking, contact information for the property owner or local representative, emergency numbers, and waste and recycling pickup schedule.

All rental license holders would need to maintain records of rental activity, including rental income and taxes remitted, for three years. This information must be provided to the city upon request.

However, short-term rental license holders would also need to keep track of the number of guests and booking dates.

Both short- and long-term rental regulations require property owners or “authorized agent[s]” to ensure that guests or tenants comply with the city code’s requirements for noise, garbage and maintenance of sidewalks and property.

What is the Good Neighbor Brochure?

Anyone who operates a rental in Lewes would need to provide each of their renters with a Good Neighbor Brochure and post it inside the residence.

This is a two-page brochure that reminds renters and residents of general rules and common courtesies within the city, as well as helpful information about parking, evacuation routes, the Lewes Line bus service and tips when riding bicycles in Lewes.

One of the first notes on the brochure reminds renters of the city’s noise ordinance and warns that a call from the neighbors could bring the police to their door and a possible citation.

“Lewes is a town of Busy Days and Quiet Nights!” the brochure reads.

The brochure also reminds renters to avoid putting their recyclables in plastic bags, as contamination of recycling often came up as a concern during short-term rental discussions.

How soon would this go into effect?

This ordinance would impact all short- and long-term rentals next year.

Pending approval, it goes into effect for the licensing year beginning Jan. 1, 2023.

Do other beach towns distinguish short-term rentals?

Lewes would be one of the first municipalities at the Delaware beaches to establish an ordinance distinguishing regulations for short- and long-term regulations.

Other nearby communities like Rehoboth and Dewey Beach require rental licenses and set regulations for all rentals, but representatives of both towns confirmed that there is no distinction between short- and long-term.

The only difference between short- and long-term rentals in Dewey, according to Administrative Supervisor Kate Banaszak, is that year-round leaseholders do not have to pay accommodations taxes.

In Rehoboth Beach, some of the rental regulations share similarities with Lewes' proposed short-term rental rules, such as the requirement to provide the city with a local contact who can be reached 24/7.

Even though other towns and cities in the state have implemented short-term rental regulations in the past and other beach towns have their own policies in place, this distinction is fairly new for the beaches and may indicate the growing number of short-term rentals – especially on third-party sites like Airbnb and Vrbo – in Delaware's coastal communities.

Several rental and real estate agents, as well as community members, have spoken about how the rise of short-term rentals has played a role − among other factors − in limiting the availability of rentals and homes for the workforce in southern Delaware, especially during the pandemic.

WORKFORCE HOUSING:Why these big-name beach businesses say they have no choice but to house their employees

SUSSEX HOUSING CRISIS:Why Sussex County's young workforce feels 'handcuffed' by lack of affordable housing

Emily Lytle covers Sussex County from the inland towns to the beaches, with a focus on health-related issues. Got a story she should tell? Contact her at elytle@delmarvanow.com or 302-332-0370. Follow her on Twitter at @emily3lytle.

This article originally appeared on Delaware News Journal: Lewes is set to regulate short-term rentals. Here's what that means