OCEAN CITY, Md. – Ocean City’s long-running fight over short-term rental rules is back in the spotlight, with town leaders weighing new limits in single-family and mobile home neighborhoods while property owners and Airbnb say the move ignores a recent referendum and threatens the tourism economy.
At a work session Tuesday, the mayor and council reviewed a long list of ideas for R-1 single family and MH mobile home districts, where an existing moratorium already blocks most new short-term rental licenses. The discussion focused on three major areas: how long guests can stay, how many licenses should be allowed and what extra rules should apply in those low density neighborhoods.
City Manager Terry McGean told WBOC that staff presented “a number of different options” for R-1 and MH, grouped into minimum length-of-stay rules, ways to limit the total number of licenses and additional restrictions such as occupancy caps and advertising requirements.
On length of stay, the council is considering either a traditional minimum, such as a five or seven night requirement, or a rule that would limit each property to one booking every seven consecutive days, regardless of how many nights a family stays. On the license side, staff laid out three concepts: phasing out licenses over time as properties are sold or licenses lapse, freezing license numbers at current levels with a waiting list, or setting a higher cap and using a lottery to assign any open slots.
Other ideas would bar corporations and multi partner entities from holding licenses in those neighborhoods, limit how many properties a single owner can control and tighten occupancy rules so that larger homes cannot advertise more than a set number of overnight guests. The town is also exploring stronger local agent rules, including requirements that a contact be able to respond to problems within 30 minutes and that owners clearly advertise parking and occupancy limits in their listings.
The debate comes just months after voters overturned an earlier ordinance that required at least five night stays in R-1 and MH and would have increased that minimum to 31 nights in 2027. That March law applied only to those neighborhoods and was approved 4–3 before opponents gathered enough signatures to force a special election. In July, voters repealed the ordinance by a narrow margin, allowing short-term rentals in those districts to continue under existing townwide rules.
Realtor Terry Miller, who helped lead the referendum effort, said the new menu of options and the existing pause on new licenses feel like a do-over.
“It’s deeply disappointing they didn’t listen to the citizens of Ocean City,” Miller said. “The public said they didn’t want more rental restrictions and that should stand. We shouldn’t back door try to change things. A moratorium on rental licenses will be a ban on rentals in these areas. It will naturally kill them over time and that’s not right.”
Airbnb is also weighing in. In an email and interview with WBOC, policy manager Kathy Burcher argued that extending the pause amounts to a ban on new licenses in R-1 and MH and runs counter to what voters decided this summer.
“It’s important to make sure we understand that a moratorium is a ban,” Burcher said. “Yes, the folks who have a license can continue to keep theirs. However, there’s a ban on any new licenses, and continuing a ban was rejected in July.”
Burcher said Airbnb’s internal data and the city’s own tourism reports show fewer visitors and shorter average stays this year, and she warned that further restrictions on short-term rentals could deepen those trends and reduce money flowing to local shops and public services.
Town officials say the goal is to find a middle ground between people who bought in R-1 and MH expecting quiet, year round neighborhoods and owners who rely on short-term rentals to help pay their mortgages in a tourism driven community. McGean said the council directed staff to quickly bring back more detailed proposals on the three license limit concepts after the holidays, followed by a fresh look at length-of-stay rules and other enforcement changes.
Second reading of an ordinance that would extend the current moratorium on new short-term rental licenses in R-1 and MH is scheduled for Monday. Existing license holders in those districts can continue to operate, and applications that were filed before the original pause took effect remain subject to earlier exceptions, but for now no new licenses can be issued in those neighborhoods.
Town leaders say they hope to finalize a package of changes that protects neighborhood quality of life while keeping Ocean City competitive as a family beach destination. Property owners and platforms like Airbnb say they will keep pressing for a compromise that preserves what they view as core property rights and a key piece of the local tourism economy.