Ocean City Mayor and Council Work Session – May 12, 2026

The Ocean City Mayor and City Council held a work session on Tuesday, May 12, 2026, at 1:00 PM. The meeting began with certification of the 2026 special election results, the swearing-in of newly elected Councilmembers Peter Buas and Jeff Heiser, and a lengthy public comment period dominated by concerns over rental occupancy enforcement. The Council then addressed new business items including approval of minutes, a rental inspection program update, a proposed code amendment to allow two additional occupants per dwelling unit (plus-two proposal), revisions to licensed occupations chapter, and committee appointments. A key outcome was a unanimous vote to hold new occupancy limits for the remainder of 2026, providing temporary relief to affected rental owners.

Consent Calendar

• Certification of 2026 Special Election Results: The Board of Supervisors of Elections reported that the special election was held May 8, 2026, from 7 a.m. to 8 p.m. at the Roland E. Powell Convention Center. 848 in-person votes and 81 absentee ballots were cast, totaling 929 ballots. Peter Buas (623 votes) and Jeff Heiser (664 votes) were elected to fill two open City Council seats. Council voted unanimously (5-0) to accept the results.
• Oath of Office: The Worcester County Clerk of Circuit Court administered the oath of office to Councilmembers Buas and Heiser.
• Approval of Minutes (April 28, 2026 Work Session): Council approved the minutes by a vote of 7-0.
• Appointment Recommendations: Council voted 7-0 to approve Mayor Meehan’s appointments: Councilmember Heiser to the Police Commission; Councilmember Buas to the Bike and Pedestrian Advisory Committee (replacing Councilmember Gehrig) and to the Coastal Resources Committee; Councilmember Gehrig as the permanent Noise Board member with Heiser as alternate; and Councilmember Proctor as the member on the Maryland Coastal Bays Committee.

Public Comments & Testimony

• Gina Rosso (Ocean City rental owner): Described purchasing a three-bedroom condo in SeaWatch for $1.2 million, only to be notified that prior owners had constructed three walls without permits 20 years ago. After removing two walls, she was denied a three-bedroom rental license due to a parking deficit, despite a letter from the condo board stating no parking impact. She argued the license process is unfair and inconsistent.
• Man from Silver Spring (30-year Ocean City renter, owns three units in SeaWatch): Expressed concern that inspectors told him he must replace a queen bed with a sleep sofa in a den, which he called nonsensical. He noted that short-term rental patterns have changed (only 10% of his rentals are weekly), and the standards should reflect that.
• Tim Nels (Hanover, PA, owner of Blue Water East unit): Purchased a one-bedroom unit that was rented as a four-person occupancy but was told after inspection it can only have three occupants, despite identical units listed for four. He said he was harmed by the reduced occupancy.
• Sean Atkins (Ocean City resident): Spoke about his own home’s parking compliance and questioned inconsistencies between hotel occupancy standards (140-142 sq ft with 4 guests per parking space) and condominium standards.
• Leslie Smith (Ocean City): Said the new occupancy ordinance is creating a solution to a problem that most people do not believe exists. She gave examples of small units (e.g., a 730 sq ft pyramid unit) that could sleep 6 but would be limited to 3 under new rules, hurting owners who rely on rental income to offset rising costs.
• Terry Miller (Ocean City): Congratulated new councilmembers, urged a focus on safety rather than occupancy, and argued that the town should let condominium associations manage occupancy. She suggested the town focus on declining population, tourism numbers, and downtown revitalization.
• Property manager Steven Lassick (Ocean City business owner): Described “utter confusion” among owners and guests, with families who have vacationed for decades being told they can no longer stay. He called for a pause on enforcement and clearer standards, noting a decline in bookings (30-40% down year-over-year) while Delaware is up.
• Tammy Johnson (condo hotel manager): Also asked for a pause, noting that rentals are declining and the focus should be on safety and community, not dividing residents.
• Michael Bell (Ocean City resident): Suggested tabling the occupancy issue and coming back with a plan that works for everyone.
• Jason Polling (Ocean City): Asked if property taxes would decrease if a three-bedroom becomes a two-bedroom, and questioned the liability of realtors selling units with misleading occupancy counts.
• Rental office manager: Stated that owners were provided projections based on previous rental history, but new rules invalidated those numbers, putting professionals advising clients at risk.
• Bill Murphy (Ocean City resident): Argued the town should punish those who deliberately overcrowd, not all owners. Questioned whether the real motivation was to push renters into hotels, and said the town should focus on abandoned properties and beautification.
• Kathy Keravich (Ocean Pines rental agent): Representing about 25 owners, she noted that one-bedroom units limited to 3 people are seeing bookings drop, and asked for higher occupancy allowances.

Discussion Items

• Rental Inspection Program Update: Airport Manager Jaime Giandomenico presented a request to solicit bids for Taxiway A relocation/hold pad. Deputy City Manager JR Harmon, Planning Director George Bendler, and Fire Marshal Joe Sexauer gave an update. They reported 1,041 inspections completed since August 2025; 941 passed, 100 failed (27 still outstanding). Average occupancy found is 7.64 people (median 8), with 3.2 people per bedroom. Inspectors measure bedrooms and living rooms, check parking, and seek illegal conversions. The Fire Marshal noted new state fire safety requirements for short-term rentals (effective October 2026 and 2028), including interconnected smoke/CO alarms, evacuation drawings, fire extinguishers, and an annual inspection program (which Ocean City’s current 5-year program may meet). The Mayor stated he will seek an amendment to remove the annual requirement.
• Proposed Amendment to Allow Two Additional Occupants per Dwelling Unit (Plus-Two): George Bendler presented a proposed change to Chapter 10 to simplify occupancy calculations: 40 square feet per person in bedrooms plus two additional occupants (not requiring extra bedroom or living room size beyond 120 sq ft minimum). This would increase occupancy for many units (e.g., Decatur House from 3 to 5). Council discussed whether the 120 sq ft living/dining room minimum would exclude some smaller units. Councilmember Proctor raised concerns that condo associations like Bellomar might have less than 120 sq ft, but staff said they would not get the plus-two but still get bedroom occupancy. Council also debated the definition of “bedroom” versus “den” and agreed to work on language before a future meeting.
• Code Revisions to Chapter 14, Article II (Licensed Occupations): License Inspector Lori Calloway and Legal Counsel Maureen Howarth presented 15 amendments, including requiring email addresses on applications, a qualified person to respond within 60 minutes, adding franchisees and real estate rental brokerages, clarifying temporary vendor licenses, adding conditions for suspension/revocation (e.g., good standing with state, no unpaid fines, third-party access to events), and streamlined service of notices. Council voted 7-0 to move to first reading.

Key Outcomes

• Hold on New Occupancy Limits for 2026: Council passed a motion (7-0) to provide occupancy amnesty for the remainder of the 2026 calendar year, allowing owners to maintain the occupancy stated on their most recent rental license. This means inspections will continue, but owners will not be forced to cancel existing reservations due to reduced occupancy. The council directed staff to work on an emergency ordinance incorporating the plus-two proposal to provide long-term clarity, and to also address the 120 sq ft living/dining minimum.
• Direction on Violation Count for License Suspension: Council agreed that a notice of correction for minor issues (e.g., a smoke detector battery) will not count as a strike under the three-strike rule for rental license suspension. Only a citation (after failure to correct) or a call for service (for nuisance issues) will count. This interpretation will be applied as staff policy; no code change is needed.
• Code Revisions Approved for First Reading: The amendments to Chapter 14, Article II regarding business licenses were approved unanimously to move to first reading at the next legislative session.
• Appointments Approved: All committee appointments recommended by the Mayor were approved 7-0.
• Next Steps: Staff will bring an emergency ordinance incorporating the plus-two proposal to the next meeting (Monday, May 17, 2026) and continue to refine the living/dining room minimum requirement. The council also will seek a state amendment to remove the annual inspection requirement for short-term rentals.