County, state attempt to regulate and tax

Homeowners in the beach communities are profiting from skyrocketing Airbnb sales and the government is struggling to keep up.

Between May 1 and Sept. 30, Airbnb hosts in Bethany Beach, Dewey Beach, Lewes and Rehoboth Beach earned nearly $4.2 million, a more than 100 percent increase from 2016.

One Lewes-area man has been renting a room in his house through Airbnb since 2015.

“Last year, I didn’t work because I made so much money [through Airbnb] that I was able to sustain myself on that alone,” he said.

Unlike owners of hotels and traditional B&Bs, Airbnb hosts haven’t yet had to deal with the red tape of business licenses and zoning permits or paying rental taxes. State and county officials are making moves to change that.

In October, Sussex County officials had their first brush with an Airbnb host.

A Lewes woman who owns a home in the Woods on Herring Creek, a private community in the Angola area, went before the Sussex County Board of Adjustment to obtain a special use permit. Her neighbors had complained to the county that by renting through Airbnb, she was negatively impacting surrounding properties. The Board of Adjustment agreed with the neighbors and denied the permit.

Sussex County Communications Director Chip Guy explained the county’s policy for Airbnb rentals, which are referred to in the county code as tourist homes or bed-and-breakfasts, and defined as dwellings with six or fewer rooms for guests.

“A tourist home is permitted in … residential zoning districts provided the property owner obtains a special use exception from the Board of Adjustment,” he said.

However, there’s no process that alerts the county when a homeowner rents through Airbnb. Hosts are only regulated on a complaint basis.

A 43-year-old Georgetown man who owns a home in the Harbeson area said he was unaware the county required a permit for Airbnb hosts.

“How would they even enforce that?” he said. “I don’t really have neighbors; I could have people coming and going at all hours and no one would know. It’s not like I have a sign in my yard.”

According to the Sussex County Planning and Zoning Office, if a complaint about an Airbnb host is received and a special exception permit has not been granted, the host is sent a violation notice. They are not fined. If they continue to host guests at the home without getting the proper permit, the matter is then handled by the county constable and the courts.

William Burns, Airbnb Public Policy Director for the mid-Atlantic, weighed in on the situation in Sussex.

“People are looking for ways to supplement their income. [Airbnb] has really been a lifeline for the middle class,” he said.

While Airbnb agrees that there should be regulations on short-term rentals, requiring a special permit seems excessively bureaucratic, Burns said.

“We believe that if you live in a residential zone you should be able to do short-term rentals as a right,” he continued. “We think a registration system or a license is perfectly fine, but a special use permit seems a bit much.”

According to Burns, Airbnb is open to entering into a conversation with Sussex County officials about how to regulate hosts. Airbnb has also reached out to Rep. Helene Keely (D-Wilmington) about House Bill 149, legislation she is sponsoring that would impose the 8 percent hotel tax on Airbnb rentals.

“We actually believe that the bill should be more expansive than less,” Burns said. “We think [Airbnb] should be collecting the hotel tax … from anyone who hosts, on [the state’s] behalf.”