Annapolis City Council Moves to Regulate Short-Term Rentals Amid Community Concerns

In a significant step towards regulating short-term rentals, the Annapolis Economic Matters Committee has proposed amendments aimed at limiting the impact of non-owner-occupied rentals on local housing markets. During a meeting on July 16, 2025, committee members discussed the implications of exempting owner-occupied short-term rentals, a move intended to preserve community integrity while addressing housing availability.

The proposed legislation seeks to exempt owner-occupied rentals from restrictions that apply to non-owner-occupied properties. Committee members expressed concerns that non-owner-occupied rentals remove homes from the long-term rental market, thereby affecting neighborhood dynamics and the community fabric. The rationale behind this exemption is to allow residents to rent out spare rooms while maintaining their primary residence, which aligns with the original concept of platforms like Airbnb.

However, the discussion also highlighted the need for a clear definition of "owner-occupied" to ensure legal clarity and prevent potential loopholes. Some committee members raised concerns about the ambiguity surrounding occupancy definitions, particularly regarding individuals who may own multiple properties and how that could affect their eligibility for short-term rental licenses.

In addition to the owner-occupied exemption, the committee proposed a two-year implementation period for a lottery system that would cap short-term rentals at 10% in certain areas. This system aims to prioritize local ownership by allowing existing license holders who reside in Annapolis or Anne Arundel County to renew their licenses first. If there are still available slots after this tier, new applicants from the same regions would be considered, followed by applicants from outside the area.

While the proposal aims to address the growing number of short-term rentals, some committee members expressed concerns about the potential backlash from residents who may lose their licenses due to the lottery system. The discussion underscored the delicate balance between regulating short-term rentals and protecting the interests of current license holders.

As the committee moves forward with these amendments, the implications for the local housing market and community dynamics remain a focal point. The proposed changes will undergo further review by the law office before being presented to the full council, with members emphasizing the importance of crafting legislation that effectively addresses community concerns while ensuring legal robustness.