short-term rental rules and regulations in baltimore city

Ready to get into the short-term rental business in Baltimore? 

Renting out property or building an accessory dwelling unit (ADU) can add value to your home and help make extra money.

However, Baltimore City has specific rules and regulations that can cause unexpected delays or costs if you don’t understand them upfront.

In this blog post, we’ll guide you through the rules and regulations you need to know before building a short-term rental in Baltimore. By understanding these laws ahead of time, you can avoid costly mistakes and unnecessary hassles and get your ADU project off the ground.

airbnb vs. short-term rental: what’s the difference?

In this article, we will be using the terms short-term rental and Airbnb interchangeably. 

In Baltimore City, a short-term rental is any residential property that’s rented for less than 90 nights. 

This can be either the entire property or a portion of the property.

licensing your short-term rental

To get your Airbnb licensed in Baltimore, there are a few requirements you need to meet first.

Both owner-occupied (where you live on the property) and non-owner-occupied (where you don’t live on the property) short-term rental properties need to be registered and licensed by the housing commissioner.

If you bought the property after 2019, it must be your main home, officially in your name, and have no outstanding code violations.

To prove it’s your main home, you need to live there for at least 180 days each year and provide proof, like a driver’s license, voter registration, or official paperwork showing the home is your primary residence. 

If someone checks your property online, it should show up as your primary residence on the state’s website.

renting multiple airbnbs

If you want to rent out more than one unit, the second unit must be part of the property you live in. For example, if you own a two-unit building and live in one of the units, you can rent the other one out.

Also, like any business, you need to register with the State Comptroller to collect the state’s sales tax and the 9.5% Baltimore hotel tax.

turning your investment property into a rental

Want to turn your investment property into a short-term rental? It needs to be “grandfathered” into the system. That means:

• You had to buy the property before December 31, 2018.
• You must have had at least one booking between August 1, 2017, and December 31, 2018.
• You also needed to apply for the rental license within 90 days after the law took effect.

While these rules might seem strict, they are designed to favor homeowners and hotels instead of large-scale investors.

selling your airbnb

Looking to sell your “grandfathered” Baltimore City Airbnb investment property?

Unfortunately, short term residential leases do not transfer on the sale or ownership, as short-term rental licenses are not property rights. 

This means you may have a profitable “grandfathered’ Airbnb business, but you are stuck marketing it like any other property at the time of sale. 

A possible workaround may be a transfer of membership sale, and this is something you should discuss with a qualified title company or attorney.  

renewing your short-term rental license

In Baltimore City, short-term rental licenses are valid for two years. 

When the license is about to expire, you can apply to renew it for another two-year term. 

Make sure to submit your renewal application, along with the $200 fee per unit, at least 30 days before your current license expires. Keep in mind, the fee may be adjusted based on the City Fee Policy.

what happens if you don’t have a license?

You can’t skip the license requirement. 

Baltimore Housing monitors short-term rental platforms like Airbnb.

If a property is listed without the proper license, the city can notify the platform, and the listing must be taken down within three days. 

You have to be licensed if you want to avoid fines or risk losing the ability to rent your property.

are short-term rental laws in baltimore city too strict? 

At first glance, the rules may seem restrictive, especially for investors.

However, when we looked into the local Airbnb scene, we found over 900 available short-term rentals on any given weekend. Interestingly, more than 100 of these were private, shared rooms being rented out by homeowners at affordable prices, and many had great reviews.

These homeowners are clearly benefiting from the rental market, and the regulations seem to protect them from being crowded out by large-scale investors. Investors can still build a portfolio of rental properties, but they need to use traditional long-term leases rather than short-term rentals.

why are the rules different in baltimore city?

Yes, there are fewer restrictions in Baltimore County. 

One reason for this is that Baltimore City is actually in the hotel business—it owns the Hilton Hotel next to the convention center. 

As a result, the city has a vested interest in limiting competition from short-term rentals.

A Local Perspective on Baltimore City’s Airbnb Market

Baltimore can sometimes feel like a small town. 

When we looked through the Airbnb listings, we recognized many of the hosts—some of them are even our clients! Many were renting out rooms or basement apartments within their homes, showing that homeowners are creatively using their space to bring in extra income.

While Baltimore City’s regulations may seem strict, they do seem to strike a balance between allowing homeowners to benefit from short-term rentals and protecting them from being outcompeted by investors. 

For now, it looks like the city has found a fair approach.