Annapolis, MD STR Market Report for Independent Hosts

Thomas Garner
Aug 7
11 min read

Updated: 15 hours ago

Boat docked on the waterfront in Annapolis, Maryland

Annapolis is Maryland's state capital, home to the U.S. Naval Academy, and one of the best-preserved colonial-era waterfront downtowns on the East Coast. It sits roughly 25 to 35 minutes south of Baltimore on I-97 and about 35 to 45 minutes east of Washington, DC on US-50, which puts a genuine historic destination inside the weekend-trip radius of two of the country's largest metro areas. Most short-term rental content about Annapolis treats it as a generic Chesapeake sailing town. That misses the actual story.

The actual story is regulatory. On Monday, October 13, 2025, the Annapolis City Council passed Ordinance O-17-25, a blockface-based cap on short-term rentals that a staff report already showed 42 blockfaces citywide exceeding at the time of passage. Existing licenses on those over-cap blockfaces can renew through November 2027, after which a lottery decides who continues operating there. That is not a distant regulatory footnote. It is a hard date that changes how anyone evaluating an Annapolis STR right now should think about supply, timing, and license value.

This report lays out what is actually known about the Annapolis short-term rental market: the ordinance itself, the city's own listing and licensing data, the two demand engines that drive the calendar, and what remains genuinely unverified. It is written for hosts and investors deciding whether, and how fast, to move.

Why Annapolis Is a Different Kind of STR Market

Annapolis was surveyed and laid out in 1695 by colonial governor Francis Nicholson, following a baroque plan of circles and radiating streets. It is one of the earliest planned cities in America, and roughly 120 buildings from the 18th century still stand in its historic core. Four signers of the Declaration of Independence lived in Annapolis, and their mansions anchor the largest concentration of Georgian architecture in the country. The Colonial Annapolis Historic District received National Historic Landmark designation on June 23, 1965, with a boundary increase on September 29, 1984, and the city sits within the Annapolis, London Town, and South County Heritage Area, one of Maryland's 12 designated state heritage areas. Annapolis was also designated a Preserve America Community in January 2005.

Layered on top of that colonial identity is the U.S. Naval Academy, established in Annapolis in 1845, and the Maryland State House, the oldest state house still in continuous legislative use in the country. Visitors compare Annapolis to Colonial Williamsburg for good reason: sites like the Maryland State House, St. Anne's Church, the Hammond-Harwood House, and the Paca House and Gardens function as a living microcosm of 1700s and early-1800s American life, not a recreation of one.

For an STR investor, that combination is rare, and most East Coast waterfront markets sell scenery. Annapolis sells scenery plus a state capital plus a federal service academy plus a National Historic Landmark district, all inside a drive market for two major metros. The problem, until October 2025, was that nothing about the regulatory environment reflected that scarcity. The city had let supply grow largely unchecked for years. Now it hasn't.

The October 2025 Ordinance Changed the Math

Ordinance O-17-25 caps short-term rentals at no more than 10% of housing units on any given blockface, defined as one side of a single city block. Once a blockface reaches that 10% threshold, the city stops issuing new STR licenses there. At the time the ordinance passed, a staff report identified 42 blockfaces citywide already exceeding the cap, with Ward 1 accounting for the majority of them, roughly 30 of the 42, Ward 8 around 7, and Ward 2 around 5. In plain terms, the neighborhoods that make Annapolis the market it is, the historic downtown core concentrated in Ward 1, are exactly where new STR supply is now the most constrained.

Existing, grandfathered licenses on over-cap blockfaces are allowed to renew through November 2027. After that date, a lottery system determines which operators can continue on those blockfaces, and the ordinance builds in real preferences: existing local license holders and owner-occupied operators are prioritized over non-resident-owned properties. Owner-occupied rentals, where the landlord actually resides on-site, are exempt from the blockface cap entirely, which is a meaningful structural advantage for hosts willing to live in the property they rent.

The ordinance carves out two specific exceptions to the cap. It does not apply during Naval Academy Commissioning Week, and it does not apply during the spring and fall boat show weeks, which lets homeowners offer rooms occasionally during those windows even on blockfaces that are otherwise over cap. Separately, and this is an operational rule rather than part of the blockface cap, short-term rental stays are limited to 120 consecutive days per calendar year.

The ordinance's sponsor, Ward 1 Alderman Harry Huntley, modeled it on regulations in New Orleans and Charleston, South Carolina, and described it as quite possibly the strictest short-term rental crackdown the city has enacted since it started regulating them. The vote was not unanimous. Alderwoman Karma O'Neill cast the dissenting vote, citing enforcement concerns. Whatever position anyone takes on the policy itself, the practical effect for the market is straightforward: Annapolis just made new STR licenses in its highest-demand blockfaces genuinely scarce, on a clock that runs out in a little over a year from when this ordinance passed.

What the City's Own Data Shows Right Now

City data shows STR listings in Annapolis grew from roughly 480 to approximately 560 over the two years leading up to the ordinance, concentrated downtown, exactly the blockfaces now hitting the cap. Today, roughly 560 units are advertised at any given time. The more important number sits underneath that one: only about 50.5% of those advertised listings are actually licensed. Just over half.

That gap between advertised listings and licensed listings is the single most useful fact in this report for anyone thinking about entering the market or evaluating an existing license. It means a meaningful share of current Annapolis Airbnb and VRBO supply is operating outside the licensing system altogether, which the city has strong new incentive, and now a strong new enforcement tool, to close. As unlicensed operators get pushed to license or shut down, and as the November 2027 lottery approaches for operators on over-cap blockfaces, the pool of legally operable STR units in Annapolis's core historic district is positioned to tighten further, not loosen.

On the tax side, Annapolis has charged an 8% occupancy tax on gross short-term rental income since July 1, 2023, up from a prior 7%. That tax is remitted monthly through the city's Citizen Self-Service portal. Operators also need a Maryland Sales and Use Tax License, and if the owner is not a full-time Annapolis resident, the city requires a local property manager. None of this is unusual for a regulated STR market, but combined with the blockface cap and the license-versus-advertised gap, it paints a picture of a city actively formalizing a market that grew faster than its rules could keep up with.

Two Demand Engines: Commissioning Week and the October Boat Shows

Annapolis has two recurring, dated demand spikes that a generic Chesapeake waterfront town simply does not have, and both matter for anyone modeling occupancy even without published ADR data.

The first is Naval Academy Commissioning Week. For the Class of 2026, the city's own press release puts the official window at May 17 through 22, 2026, a six-day span that culminates in the graduation and commissioning ceremony on Friday, May 22 at 10:00 a.m. at Navy-Marine Corps Memorial Stadium on Rowe Boulevard. In an evergreen sense, Commissioning Week falls in late May every year. The city's own visitor advisory for the week warns of heavy traffic, temporary road and bridge closures, including the Route 450 Naval Academy bridge closing for specific windows around May 19 and 20 for Blue Angels flight activity, parking limitations, maritime traffic restrictions, and increased downtown security. Peak accommodation demand concentrates in the final days, May 19 through 22, driven by the Blue Angels demonstrations, the Graduation Ball, the Ring Dance, and the ceremony itself.

The second is October, when Annapolis runs two major national boat shows at City Dock. The Annapolis Powerboat Show runs October 8 through 11, 2026, billed as the Mid-Atlantic's largest in-water powerboat show, with general admission at $32 and a Preview Day on October 2 at $45. The Annapolis Sailboat Show follows on October 15 through 18, 2026, an internationally recognized annual event, also at $32 general admission. There is a gap week between the two shows rather than a literal back-to-back run, but the practical effect for a host is the same: Annapolis carries two major national events across a single month, each drawing boat buyers, exhibitors, and enthusiasts from well outside the local drive market.

Both events are also written directly into the STR ordinance itself, which carves out a temporary exemption to the blockface cap during Commissioning Week and during the boat show weeks, letting homeowners on over-cap blockfaces offer rooms during those specific windows. That is a strong signal from the city itself about which weeks it expects the heaviest short-term lodging demand.

Annapolis Airbnb Occupancy and Revenue: What's Confirmed, What Isn't

A market report should be honest about the limits of its data, and the honest answer here is that no reliable, sourced occupancy percentage, average daily rate, or seasonal revenue benchmark exists for Annapolis STRs in current research. Any number circulating online claiming to be Annapolis's average nightly rate or annual host revenue should be treated skeptically until it comes with a named, checkable source, because none of those figures were confirmed in the research behind this report.

What is confirmed, and what a serious operator can actually build a demand thesis around, is directional and structural rather than a specific dollar figure: a licensed-unit supply that is shrinking relative to advertised supply, two dated annual events that concentrate demand into predictable windows, a drive-market position inside range of two major metros, and a historic downtown core that is now the hardest place in the city to get a new STR license. Those are the inputs. The output, in terms of occupancy percentage or ADR, is something an operator needs to verify against current listing data on a specific property and submarket, not something this report can responsibly hand over as a sitewide average.

That distinction matters more in Annapolis than in most markets, because the regulatory scarcity story only works if the underlying demand is real. It is. A federal service academy, a state capital, a National Historic Landmark district, and two national trade shows are not soft or speculative demand drivers. They are fixed, dated, and recurring. What is missing from the public record is a clean translation of that demand into per-listing revenue numbers, and any operator serious about entering this market should treat that as their own due-diligence task, not something to take on faith from a blog post.

The Road to November 2027

The single most important date in this entire report is November 2027. That is when grandfathered STR licenses on the 42-plus over-cap blockfaces stop automatically renewing and a lottery system takes over to decide who can keep operating there. The ordinance builds in stated preferences for existing local license holders and for owner-occupied operators over non-resident-owned properties, but the exact lottery mechanics and appeal procedures have not been published in detail as of this report.

What is clear is the shape of the incentive. Anyone who secures and holds a license on an over-cap blockface between now and November 2027 is holding something the city is not going to keep issuing freely after that date. Anyone who waits is betting on winning a lottery, with priority effectively running against them if they are a non-resident owner competing against owner-occupied or existing local operators. That asymmetry is the core of why this market report leads with regulation instead of leading with a generic pitch about Annapolis's charm. The charm was never the scarce resource. As of October 2025, the license is.

Frequently Asked Questions

What changed for Annapolis short-term rentals in October 2025?

Ordinance O-17-25 caps short-term rentals at no more than 10 percent of housing units on any given blockface, defined as one side of a single city block. That cap fundamentally changed the math for anyone evaluating a new Annapolis STR purchase, since availability now depends on which specific blockface a property sits on, not just general city-wide demand.

How many Annapolis short-term rental listings are actually licensed?

Only about 50.5 percent of advertised Annapolis listings are actually licensed under the city's own data. That's arguably a more important number than the ordinance's cap itself, since it shows a real compliance gap between what's advertised and what's formally authorized, a gap worth checking before treating any comp as a licensed, above-board operation.

What's the Annapolis occupancy tax rate?

Annapolis has charged an 8 percent occupancy tax on gross short-term rental income since July 1, 2023, up from a prior 7 percent. That tax applies regardless of a listing's licensing status under the newer blockface cap, so it's a separate compliance obligation from the O-17-25 licensing question.

What drives seasonal demand in Annapolis beyond general Chesapeake tourism?

Annapolis has two recurring, dated demand spikes a generic Chesapeake waterfront town doesn't have: Commissioning Week and the October boat shows. The Annapolis Powerboat Show specifically runs October 8 through 11, 2026, billed as the Mid-Atlantic's largest in-water powerboat show, with general admission at $32 and a Preview Day on October 2 at $45.

How long do existing Annapolis STR licenses last under the new ordinance?

Existing licenses continue renewing through November 2027, at which point a lottery process determines who stays licensed for blockfaces already over the new cap. That gives current license holders a defined window, but new entrants on capped blockfaces face a genuinely different and more limited path in.

Is Annapolis' revenue data as fully published as other markets?

No, this report is explicit about what remains genuinely unverified. It's written for hosts and investors deciding whether, and how fast, to move, based on the confirmed ordinance, the city's own licensing data, and the two demand engines, without inventing revenue figures the source data doesn't support.

Why does the blockface-level cap matter more than a citywide percentage?

Because the 10 percent cap applies per blockface, not city-wide, two properties on different blocks in the same neighborhood can face entirely different availability. A host or buyer needs to check the specific blockface's current STR count against the cap, not just assume general neighborhood demand translates into open licensing capacity.

Should Annapolis listing copy lean on generic Chesapeake sailing-town language?

No. Annapolis' real differentiators are the ordinance's licensing dynamics, Commissioning Week, and the October boat shows, not a generic Chesapeake sailing pitch that could describe dozens of other towns. Listing copy that reflects the colonial-capital identity and these dated demand events converts better than a broad regional description.

What happens after the November 2027 licensing deadline?

Blockfaces already over the new cap move into a lottery process at that point to determine which existing licenses continue. That timeline is the practical planning horizon for any host or buyer currently holding, or considering acquiring, a licensed Annapolis short-term rental on a capped blockface.

Can a new host still enter the Annapolis STR market today?

It depends on the specific blockface. Since the cap and current license count are set at that granular level, a new entrant needs to confirm the blockface's existing STR count against the 10 percent threshold before assuming a license is available, rather than treating city-wide averages as a green light.

Work with Crest & Cove Creative

Annapolis' real story isn't Chesapeake sailing, it's Ordinance O-17-25, 42 blockfaces already over the new STR cap, with existing licenses renewing only through November 2027 before a lottery decides who stays. Most listing copy still ignores it.

We help Annapolis hosts write listing copy that reflects a colonial-capital destination, not a generic sailing town, while this licensing window is still open. Send your listing to crestcove.co/audit or (256) 998-7502.

Reach out at crestcove.co or (256) 998-7502.