More than three quarters of short-term residential rentals being offered in Montgomery County, Maryland, are unregistered, according to a report from the county’s Office of the Inspector General.
The findings in the latest report from Inspector General Megan Davey Limarzi show that more than 85% of the more than 1,400 short-term residential rentals operating in Montgomery County are not licensed.
Despite having created licensing regulations for short-term residential rentals (STRRs) in 2017, the IG’s report stated that Montgomery County has lost out on fees and taxes it could have collected, and has been “lax” in administering the regulations it put in place.
The report estimates that if licensing fees were collected on the unregistered STRRs in 2024, more than $196,000 in revenue would have been generated. If the county had assessed the maximum penalty for illegally operating a STRR, the IG’s report stated, the county could have collected $659,000 in penalties in 2023.
Not only did the county not collect fees tied to licensing of short-term rentals, the report from the IG states, “The county is unable to reconcile tax payments received by the short term rentals brokers against what was collected.”
When the regulation was initially put in place in 2017, the Department of Health and Human Services was charged with enforcing the regulations.
According to the IG’s report, “DHHS made minimal effort to enforce STRR Code provisions leading to unlicensed and ineligible STRRs and thousands of dollars in missed revenue.”
The report also found that there was, “Insufficient staffing and no formal policies or procedures exist to administer the STRR program.”
