Buying a Short-Term Rental Near Annapolis and on Maryland's Eastern Shore

Annapolis's Real Story: A Cap in 2025, Then a Moratorium in 2026

On October 14, 2025, the Annapolis City Council passed what its own sponsor, Ward 1 Alderman Harry Huntley, called "quite possibly the strictest crackdown on short-term rentals since we started regulating them." The ordinance caps short-term rentals at 10% of properties on any given city block face; once a block hits that threshold, the city stops issuing new licenses there, full stop. Existing licenses can still be renewed through November 2027, after which a lottery system -- prioritizing owner-occupied units -- brings over-cap blocks back into compliance. The rule exempts operation during high-demand Naval Academy periods like commissioning week and the fall boat shows. Huntley modeled the approach on similar rules in New Orleans and Charleston, South Carolina. The backdrop: Annapolis's own STR count grew from roughly 480 to about 560 listings over two years, concentrated in the downtown historic district, and a Baltimore Banner report found that only about half of the city's short-term rentals actually held a proper license at the time.

The city didn't stop there. Two months later, on December 8, 2025, Alderwoman Karma O'Neill introduced a one-year moratorium on new short-term rental licenses, co-sponsored by Mayor Jared Littmann, who argued the October restrictions weren't solving the city's enforcement and quantity problems. On March 10, 2026, the City Council passed that moratorium 8-1. It halts new licenses for non-owner-occupied short-term rentals; existing licenses, license renewals, and owner-occupied short-term rentals are unaffected. The stated purpose is to give the city a year to actually count how many short-term rentals are operating and assess enforcement before deciding on further steps -- which officials have said could include dedicated STR zones, a hard numeric cap, or new taxes. A June 2026 Baltimore Sun headline reported that short-term rental fees and fines were also set to increase in Annapolis around that time; we could not independently confirm the specific new fee or fine amounts this pass, so treat that as a real but unverified-in-detail development and confirm current fee schedules directly with the city.

The practical takeaway for a buyer: if you're purchasing a non-owner-occupied property in Annapolis specifically to start a new short-term rental business, you cannot get a new license right now -- the moratorium is active and in effect as of this writing. If you're buying an existing, already-licensed short-term rental, that license appears to remain renewable, but confirm its specific status, the block's cap status, and the moratorium's current end date directly with the City of Annapolis before closing.

Anne Arundel County Outside the City: A Separate, Thinner Rulebook

Property outside Annapolis's city limits, in unincorporated Anne Arundel County, is not subject to the city's block cap or moratorium at all -- those are City of Annapolis ordinances, not county law. Anne Arundel County instead defines a short-term residential rental as a hosting-platform-facilitated stay of no more than 120 consecutive days in a calendar year, and requires registration through the county's Land Use Navigator system, in person at the Permit Center (2664 Riva Road), or by mail. The county's own licensing page does not publish a registration fee, a numeric cap, or zoning restrictions -- a real gap in what's publicly documented, not something we're inventing a number for. Anyone buying in unincorporated Anne Arundel County should call the county's Licenses Division directly (410-222-7788) to confirm current fees, inspection requirements, and whether any zoning overlay applies to the specific parcel, since the county's public-facing page does not spell those out.

Talbot County's Different Architecture: License, Review Board, and No Countywide Cap We Could Find

Talbot County runs on a fundamentally different model than Annapolis. Under Chapter 190-63 of the county code, anyone renting a Talbot County property for 14 weeks or less must hold a short-term rental license and remit the county's Public Accommodations Tax, regardless of whether the property is marketed through a property manager, an online platform, or an informal arrangement. New applications go before the county's own Short-Term Rental Review Board in a public hearing, with notice to neighboring and adjacent property owners; the Board can attach conditions to an approval to limit impacts on the surrounding area. An initial license runs one year and requires inspections covering fire safety (extinguishers, smoke and carbon monoxide alarms), emergency egress, and septic system compliance through the county's Environmental Health Department. Renewal applications must be submitted 60 days before expiration -- miss that window and the application reverts to full new-application treatment, including another Board hearing. Get through the first renewal cleanly, though, and subsequent renewals can run up to two years and are typically approved administratively, without a new Board hearing. Owners remit the Public Accommodations Tax by filing a Room Tax Report with the county's Finance Department.

We did not find a published, countywide numeric cap on the total number of short-term rental licenses in Talbot County, unlike Annapolis's explicit 10%-per-block rule -- that's a genuine, disclosed difference between the two jurisdictions' approaches, not an oversight on our part. What Talbot County's own page does say plainly is that the towns of Easton, Oxford, St. Michaels, Trappe, and Queen Anne all administer their own short-term rental licensing separately from the county. That means a property inside any of those five town limits is not governed by the county process described above at all -- you have to go to the specific town.

St. Michaels' Own Rulebook: Specific and Genuinely Different From the County's

St. Michaels is the one Eastern Shore town in this market where we located a detailed, current ordinance text, and it's worth reporting exactly, because it's a real, structural set of rules rather than a generic "check with the town" placeholder. Under Section 340-73 of the town code (amended February 10, 2021, by Ordinance No. 519), every short-term rental in St. Michaels needs a town-issued license and passes an onsite inspection for building, fire, and safety code compliance. Inside the town's Commercial (CC) District, a short-term rental unit must sit above the first floor of the principal building -- except for single-family dwellings, which are handled differently. For a single-family home to operate as a short-term rental at all, the ordinance requires the structure to have been built in or before 1945, to be the only structure on the lot used for human habitation, to max out at 1,400 square feet of interior space, and to sleep no more than four people (not counting infant sleeping equipment) at two persons per bedroom. The premises can only be used as a place of public accommodation for short-term rental -- not mixed with another principal use -- and owners owe both Maryland sales tax and the Talbot County Accommodations Tax on top of the town license. We did not find an overall numeric cap on the total number of St. Michaels short-term rental licenses in this ordinance text.

That 1,400-square-foot, pre-1945, four-sleeper structure test is a genuinely distinctive, real regulation -- not one we're generalizing from another market. It also means an older, smaller Victorian-era cottage in St. Michaels may qualify for single-family short-term rental use in a way a larger or newer home on the same street would not. We did not locate equivalent published ordinance text for Easton, Oxford, Trappe, or Queen Anne this pass, despite Talbot County's own page confirming those towns administer their own rules separately -- that's a disclosed gap, not a claim those towns have no rules. Confirm directly with each town's own planning office before assuming St. Michaels' specific thresholds apply anywhere else on the Eastern Shore.

What Actually Drives Rental Demand Here

Annapolis's rental demand runs substantially on boating and the Naval Academy calendar, which is exactly why both the October 2025 cap ordinance and the 2026 moratorium carved out explicit exemptions for Naval Academy commissioning week and the fall boat shows rather than trying to regulate through them. The United States Sailboat Show, held each fall at City Dock and marketed as the largest in-water sailboat show in the world (roughly 200 boats in recent years), marked its 50th anniversary in 2019, putting its founding around 1969. It runs back-to-back with the United States Powerboat Show at the same City Dock location; the 2026 Powerboat Show is scheduled for October 8-11 and is expected to bring more than 400 boats to the waterfront. Those two shows, plus Naval Academy commissioning and graduation weekends, are the clearest, most concentrated demand spikes in this market -- exactly the periods this site's other Annapolis pages and the city's own STR ordinances both single out by name.

On the Eastern Shore, the demand driver is heritage and maritime tourism rather than a boat show calendar. St. Michaels is home to the Chesapeake Bay Maritime Museum, founded in 1965 at Navy Point, which holds the world's largest collection of Chesapeake Bay boats, including the Edna E. Lockwood -- the last sailing log-bottom bugeye and a National Historic Landmark -- and the restored 1955 skipjack Rosie Parks. A few miles away, the Oxford-Bellevue Ferry, in continuous operation since 1683 and marketed as the oldest privately operated ferry route in the country, is its own standing visitor draw. Those attractions give St. Michaels and Oxford a real, verifiable tourism base independent of anything happening in Annapolis -- which matters, because it means Eastern Shore short-term rental demand isn't simply an overflow effect from Annapolis's boat shows; it has its own separate audience.

What This Page Confirmed, What It Didn't, and What That Means for a Buyer

Confirmed directly, across multiple independent sources: Annapolis's October 14, 2025 10%-per-block-face cap ordinance, its November 2027 renewal deadline and post-2027 lottery process, its Naval Academy/boat-show exemption, the roughly-half-unlicensed finding, and the 480-to-560 listing growth; the March 10, 2026 one-year moratorium on new non-owner-occupied Annapolis STR licenses (passed 8-1), its owner-occupied and existing-license exemptions, and its stated enforcement/data-gathering purpose; Anne Arundel County's 120-consecutive-day short-term rental definition and its registration process; Talbot County's Chapter 190-63 licensing and Review Board process, its inspection requirements, its 60-day renewal window, its up-to-two-year subsequent renewal term, and its Public Accommodations Tax/Room Tax Report mechanics; the fact that Easton, Oxford, St. Michaels, Trappe, and Queen Anne all administer STR rules separately from Talbot County; and St. Michaels' own Section 340-73 structural requirements (pre-1945 construction, 1,400-square-foot cap, four-sleeper/two-per-bedroom occupancy limit for single-family conversions). Also confirmed: the US Sailboat Show and Powerboat Show's scale and City Dock venue, and the Chesapeake Bay Maritime Museum's and Oxford-Bellevue Ferry's histories.

Not resolved, and not something we'll invent: the exact dollar fees or fine amounts in Annapolis's reported June 2026 fee/fine increase; any registration fee, numeric cap, or zoning restriction for unincorporated Anne Arundel County's own short-term rental process; a countywide numeric cap for Talbot County (we found none published); and specific ordinance text for Easton, Oxford, Trappe, or Queen Anne, which Talbot County's own site confirms administer their own rules but whose actual text we did not independently locate this pass. We also did not pull verified, current platform-level occupancy or average-daily-rate figures (AirDNA, Rabbu, or similar) for Annapolis or the Eastern Shore towns in this research pass, so none are used here -- ask a local property manager or pull current platform data yourself before underwriting a specific property. Short-term rental rules in this market are genuinely in flux right now, especially in Annapolis. Before writing an offer with short-term rental income in the plan, confirm the current license and moratorium status of the specific parcel with the City of Annapolis, Anne Arundel County's Licenses Division, Talbot County's Planning and Zoning Department, or the specific Eastern Shore town's own planning office -- whichever actually governs that address -- and have a Maryland real estate attorney and CPA review the deal before you buy.