A City of Annapolis committee on Tuesday approved changes to an ordinance that would loosen owner‑occupancy requirements for accessory dwelling units (ADUs) while adding safeguards intended to limit short‑term‑rental conversions.

The Rules and City Government Committee voted to advance O‑15‑25 after adopting three amendments that together raise the ADU size cap, ease utility hookup requirements and preserve owner‑occupancy when an ADU is offered as a short‑term rental.

Alderman Schandlermeyer, the ordinance sponsor, told the committee the change is necessary because the Federal Housing Administration revised mortgage rules in 2023 to permit FHA financing for ADUs so long as local rental restrictions are not in place. “In order to make the financing of this more flexible for the FHA loans, which are the easiest loans for people to get, we need to do this,” he said.

The committee adopted Amendment 1 to increase the ADU maximum from 850 square feet to 1,200 square feet and to replace the ambiguous term "livable space" with a clear floor‑area measure. That amendment also allows an ADU to share water and sewer hookups with the primary unit — a change staff said will reduce upfront utility costs, which members discussed as ranging in the record from roughly $50,000 to $80,000 in some cases.

Planning staff, represented by Eric Leshinski, said ADUs provide value across the city and that the 2021 law allowing ADUs "has not produced a windfall of ADU construction" but nonetheless carries benefits for housing options. Leshinski urged caution about prescriptive geographic limits, saying the department does not typically project exact locations of new ADUs but supports standards that make ADUs workable citywide.

At the same time, opponents raised neighborhood and planning concerns. Alderman Arnett urged rejection of the ordinance as drafted, saying it risks encouraging investor‑driven conversions rather than family uses. Arnett argued the change is "not planning" and worries ADUs could be concentrated where property values are low, creating uneven impacts on community character.

To address short‑term‑rental concerns, the committee approved Amendment 2, negotiated with Planning & Zoning staff, that retains an owner‑occupancy requirement for any ADU used as a short‑term rental. As staff summarized, a primary unit can use a property manager for short‑term rentals in some circumstances, but an ADU offered as an STR would still require owner occupancy.

A floor amendment from Alderman Savage created a block‑level permit cap for ADUs: a 10% cap per block face with an option to allow up to 30% where a staff mobility assessment shows it is appropriate. Staff cautioned that an overly low cap might undercut the ordinance’s housing goals but acknowledged that targeted limits could allay neighborhood concerns. The committee approved Savage’s amendment after debate.

The committee then voted to advance O‑15‑25 as amended to the full council for further consideration. The committee record shows several members voiced reservations but the amended ordinance carried forward with the stated goal of balancing increased housing options with protections against STR proliferation.

Next steps: O‑15‑25 as amended will be scheduled for full council consideration, where members will have another opportunity to debate the changes and any additional revisions.