In a closely watched special election, Ocean City residents narrowly voted down a proposal that would have significantly limited short-term rentals (STRs) in single-family homes.
The referendum, known as Question A, would have imposed a five-night minimum stay requirement for renters in single-family residences, increasing to a 31-night minimum by 2027. These restrictions would not have applied to other property types, such as condos, townhouses, or hotels.
Voters rejected the proposal by a slim margin — 834 to 800 — leaving the existing STR framework in place. The referendum followed months of public debate and a successful petition effort to challenge a local ordinance passed in March by the Ocean City Council.
Supporters of the restrictions cited quality-of-life concerns, including noise and waste management issues in residential neighborhoods. Opponents pointed to private property rights and the economic role of STRs in the resort town’s tourism-driven economy.
Broader Implications: STR Regulation and Local Revenue
The Ocean City vote underscores the broader challenge counties face in balancing community concerns with tourism and economic development.
At the same time, Maryland is preparing for a significant shift as the State Comptroller takes over hotel rental tax collection from STR platforms. Legislation enacted this year (SB 979 / HB 1103) moves tax collection for large STR platforms to the State Comptroller, aiming to improve transparency, compliance, and equity in local revenues.
MACo supported the overall framework but pushed for amendments to improve transparency, including license verification and property-level reporting. While the final bill preserves audit authority and directs timely distribution of revenues to local governments, some concerns — including lack of property-level reporting and license verification — remain unresolved.
At MACo’s urging, the General Assembly delayed implementation until fiscal 2027 to allow time to resolve administrative details and ensure local governments retain enforcement tools.
Platforms like Airbnb and Vrbo often do not share host-level data with counties, limiting local enforcement. Some counties have struck voluntary collection agreements, but many do not, resulting in lost revenue and inconsistent oversight, even as local governments continue funding tourism infrastructure and services.
Ocean City’s referendum reflects what counties across Maryland are experiencing: short-term rentals can expand tourism and lodging options, but often introduce noise, safety, and enforcement concerns in residential areas.
As previously reported on Conduit Street, Howard and Montgomery counties recently passed legislation to crack down on for-profit residential house parties, highlighting growing local efforts to address disruptive STR activity. As Maryland transitions to a statewide tax framework, protecting local authority and preserving meaningful compliance tools remains essential.
Stay tuned to Conduit Street for more information.
