Could this New Castle County zoning rule make most short-term rentals like Airbnb illegal?

A little-known rule in New Castle County may upset the short-term rental business in Delaware’s most populous county.

An Airbnb owner in North Wilmington was recently issued violations for operating a short-term rental in a residentially zoned district.

Little did owner and Wilmington-area resident Paras Turakhias know short-term rentals are prohibited in residential areas.

“Commercial lodging is expressly prohibited in all residential zoning districts,” a city planner wrote to Turakhias in an email April 18.

In New Castle County, short-term rentals like Airbnb or VRBO are considered “commercial lodging,” which is permitted only in areas zoned commercial neighborhood, commercial regional, office neighborhood, business park and industrial, county spokesman Brian Cunningham confirmed.

This is the second "commercial lodging case" the county has had this year, Cunningham said. Code Enforcement had six cases last year, he added.

A hearing scheduled Tuesday to review the violations that Turakhias received ended quickly with county planners agreeing to give Turakhias an extension to gather information and present his case.

With the proliferation of short-term rental options across the country, communities and affordable housing advocates have pointed to this particular option causing issues with housing affordability, which has borne out in some recent studies.

In the city of Wilmington, problem short-term rental properties have prompted a bill that would regulate the market and seemingly limit short-term rental ownership to only properties that are owner-occupied.

RELATED: Here's how Wilmington wants to regulate Airbnb and other short-term rentals

Short-term rental owners say both New Castle County’s policy and the proposed regulations in Delaware’s largest city will stifle their operations and put many of them out of business.

Wilmington resident and short-term rental owner Travis Fogelman said the county’s policy essentially makes Airbnbs illegal. There are hundreds, if not thousands of listings, countywide, he argued, that could be shutdown if the county enforces the code regulations.

“This need is not going to go away, it’s been there since biblical times,” he said. “People hosted people in their homes, it was just word of mouth. Now that it’s on an app, we have a target on our backs.”

An owner-occupied Airbnb

Turakhias purchased 2817 Grubb Road, a single-family home, nearly two years ago, intending to use it as his primary residence with his extended family.

When Turakhias first decided to rent out the North Wilmington home when he and his family weren't staying there, he said he contacted county officials to find out the rules and was told there “are no rules in place” for short-term rentals.

Now, in order to operate the property as a rental, even short-term, Turakhias said he’d have to pursue zoning changes, which would render the property a rental rather than an owner-occupied home.

A neighbor contacted the county to complain about the rental operation, which is what prompted New Castle County to issue citations on Turakhias.

HOUSING: Where you're likely to find a rental home in Delaware you can afford. See results by county

County officials said code enforcement is largely complaint-driven. The county isn’t going out looking for illegal Airbnbs, but its approach to enforcing the laws around short-term rental properties does open the door to selective enforcement.

Turakhias pointed out that there are likely 1,000 short-term rentals in the county.

“I feel like I'm getting selective enforcement,” he said. “There needs to be equitable regulation governing short-term rentals.”

Cunningham, the county spokesman, did not say what is being done to ensure enforcement is equitable and he could not say how many short-term rental units could be in violation in New Castle County.

County carveout for renting rooms

New Castle County homeowners can rent rooms (up to three “nontransient roomers or boarders” are permitted by county code) in their homes, provided:

• The owner also resides in the dwelling.

• No displays or advertising are on the premises.

• The roomer or boarder stays for less than 45 days.

These allowances are outlined in the county’s code on “accessory uses” and “residential home uses.”

Efforts to regulate the industry

New Castle County has yet to wade into conversations around regulating the short-term rental market.

County Council President Karen Hartley-Nagle said council members have yet to introduce legislation that would deal with the industry, but added that she’s been doing research and has more questions about the operations within the county.

“I have more questions about it and want to get answers to make sure whatever steps we take are productive steps and they don’t inadvertently hurt any industry in particular but also look out for my constituents, so there is a balance there,” she said.

Fogelman and other short-term rental owners in Wilmington have been working to raise awareness of the regulations the city is considering on the industry.

With the city’s proposed regulations, Fogelman said the most problematic provision would be requiring all short-term rental units be owner-occupied.

READ THE PROPOSED REGULATIONS ON SHORT-TERM RENTALS

He stressed that many people – from visitors to professionals who are working short-term in the area – use short-term rentals for their temporary housing needs.

“It would ban most Airbnbs except for a handful because most operators don’t live in the unit themselves,” Fogelman said. “It’s about the hundreds of very small business owners and collectively all the money being spent that we bring in. City Council members don’t know the damage they are doing with this bill.”

Other owners say the proposed regulations are unclear, and hope to work with city lawmakers to come up with regulations that all involved parties can agree to.

Courtney Messina, who runs Your BNB Made Easy with business partner Jessy Murphy, said beyond the question of whether all short-term rentals would have to be owner-occupied, other regulations proposed are a bit unclear. She pointed to the limit on the number of guests in a home as well as requiring signage in front of the units.

"We hope that hosts are considered in that conversation. Unless people writing legislation have firsthand experience on this, we do need to be consulted," Murphy said. "How the legislation is currently written will knock most people out."

The state is also looking at imposing an 8% lodging tax to short-term rentals with the introduction of House Bill 168, Spotlight Delaware reported.

Got a tip? Contact Amanda Fries at afries@delawareonline.com, or call or text her at 302-598-5507. Follow her on X at @mandy_fries.

This article originally appeared on Delaware News Journal: From county zoning to proposed regulations, Airbnb, VRBO scrutinized