Rules committee backs definition of 'block face' and limits short‑term rental growth; rejects owner‑occupied exemption

The Annapolis Rules Committee voted to recommend Ordinance O-17-25 to the full council with a technical amendment clarifying how the city will measure a block face for purposes of a proposed cap on short‑term rentals, and it rejected a proposed exemption for owner‑occupied rentals.

Under the ordinance as discussed, the city would limit short‑term rentals to no more than 10% of the housing units on a single block face (one side of a street between intersecting streets). Staff told the committee that Host Compliance’s online scans show roughly 560 short‑term rental listings across the city; 283 units are currently licensed and a large share of the rest are in the process of coming into compliance, staff said. The staff analysis identified 30 block faces in Ward 1, five in Ward 2 and seven in Ward 8 that currently exceed the 10% threshold.

Committee members voted to recommend favorably an amendment (sponsored by Alderman Savage) that clarifies the ordinance’s definition of “block face” to accommodate atypical street layouts and gives the director of planning authority to designate the appropriate block‑face boundary where necessary. The committee rejected a second Savage amendment that would have exempted owner‑occupied short‑term rentals from the 10% cap; staff cautioned that distinguishing owner‑occupied from non‑owner‑occupied units for enforcement would be administratively complex and would increase staff workload.

Karen Krause, the city’s short‑term rental coordinator, told the panel that the licensing program is active and that the city is in the process of bringing unlicensed operators into compliance; she said Host Compliance’s scans identify more listings than the city currently has licensed. Staff said a portion of the unlicensed listings were contacted and some operators opted to withdraw listings rather than pursue licensing.

Alderman Savage presented additional, more expansive proposals — including a lottery or phased system to rebalance concentrations, preferential priority for in‑city owners, and potential finance tools to direct growth proceeds to transit — but staff and several aldermen expressed legal and administrative concerns. Staff cautioned that a lottery or retroactive reallocation of existing permits could trigger legal challenges and would be difficult to administer. The committee rejected the deeper lottery and phased‑priority proposals in favor of forwarding the ordinance with the clarified block‑face definition only.

The Rules Committee’s recommendation means O-17-25 will go to the full council for consideration with the technical block‑face amendment; the question of whether to adopt the 10% cap itself will be decided by the full council. Staff said additional operational guidance and likely software/IT support would be needed to monitor caps on a block‑face basis, and they recommended a waiting list/notification process for applicants in capped block faces.