Ocean City, Maryland Planning and Zoning Commission Meeting and ADU Public Hearing - October 6, 2026

The Ocean City Planning and Zoning Commission met on Tuesday, October 6, 2026, at 6:00 p.m. in City Hall Council Chambers, 301 Baltimore Avenue, followed by a 6:30 p.m. public hearing. The agenda item was a proposed zoning text amendment (PZ File #26-14100001) to permit accessory dwelling units (ADUs) on lots with an existing single-family detached dwelling and establish standards, in response to Maryland House Bill 1466. The commission recommended approval by a 4-1 vote after adding a prohibition on short-term rental use of ADUs.

Consent Calendar

• The commission approved the minutes of the September 15, 2026 meeting without noted changes.

Staff Comments

• Staff announced that the October 20, 2026 meeting will include a site plan review, a conditional use public hearing for an escape room, and an anticipated extension request; quorum will be needed.

Public Comments & Testimony

• No oral public testimony was offered for or against the ADU amendment during the public hearing.
• Staff entered as Exhibit 7 an email from Joan Floyd, a resident of 1104 North Philadelphia Avenue, providing ADU comments to staff on October 6, 2026.

Discussion Items

• Staff presented the proposed ADU code amendments, explaining that Maryland HB 1466, effective October 1, 2025, requires municipalities to authorize ADUs on lots with single-family detached dwellings and adopt compliant local regulations by October 1, 2026. The staff report noted the ordinance is being developed solely to satisfy state mandates.
• The proposal adds an ADU definition to Section 110-2, permits ADUs as accessory uses in the R-1, DM, DMX, M, DR, and I-1 districts, adds height regulations in R-1 and MH districts, and creates new Section 110-888 with ADU standards. Staff noted the town's pyramidal zoning will also allow ADUs in R-2A, R-2, R-3A, R-3, BM-1, LC-1, SC-1, and BMUD districts.
• The proposed definition describes an ADU as an attached or detached secondary dwelling unit on the same lot as a primary single-family detached dwelling, not greater than 75% of the size of and subordinate in use to the primary dwelling.
• Proposed standards include one ADU per lot; required building permits, including a sealed survey for detached ADUs; a separate rental license with only one rental license allowed per property; common ownership with the primary dwelling and no separate conveyance; no conversion of an accessory structure when the only car access is from an alley; counting ADUs toward maximum lot coverage; aesthetic continuity with the primary dwelling; exclusion from lots with commercial or multi-family uses and from attics; a maximum height of 25 feet unless another code section specifies otherwise; exemption from density calculations; and parking rules that verify primary dwelling bedroom counts, do not require additional parking if the primary dwelling complies with off-street parking, and require one additional parking space per ADU bedroom on properties with existing parking nonconformities.
• Staff also stated the state requires ADUs to be excluded from density calculations and residential growth limits, prohibits side and rear setback requirements exceeding those for accessory structures, and bars additional parking requirements without a previously completed parking study.
• The public hearing was advertised on September 22 and September 29, 2026, in the Ocean City Today Dispatch.
• During commissioner discussion, several commissioners supported adding language to prohibit ADUs from being used or offered as short-term rentals, arguing this aligns with the comprehensive plan's goal to increase housing for the seasonal workforce and with the state's purpose of increasing housing supply. One commissioner opposed that restriction, noting it could prevent a homeowner from later using an ADU as a short-term rental after using it for a family member, but acknowledged the ordinance is intended to increase housing supply.
• Staff clarified that Maryland Department of Planning guidance indicates the short-term rental provision in HB 1466 is in the Real Property Article and primarily concerns covenants and HOA restrictions, while the state's ADU FAQ states that HB 1466 does not alter a local government's existing power to regulate short-term rentals.
• The chair briefly reopened the public hearing to allow staff to respond to a commissioner question; staff confirmed an ADU must be on a lot with an existing single-family detached dwelling as the principal use.

Key Outcomes

• The commission closed the public hearing after no public speakers came forward.
• Commissioner Gordon Kretser moved, and Commissioner Tony Butta seconded, a motion to recommend approval of the ordinance amendment with an added provision to Section 110-888(a)(4) stating that an ADU shall not be used or offered as a short-term rental housing unit as defined in town code, that the town shall not issue a short-term rental housing unit license for an ADU, and that an ADU may be rented only as a long-term rental housing unit.
• The motion passed 4-1. The recommendation and amended ordinance language will be forwarded to the Mayor and City Council, with next steps of introduction at a future work session, first reading, second reading, and official vote.
• Chairperson Joe Wilson noted this was his last meeting. Staff recognized his service of 9 years and 6 months, including 3 years as chairperson and 555 service hours, and involvement in major projects and the comprehensive plan update. Staff noted the commission's rules provide that the secretary succeeds the chairperson when a vacancy occurs before the term is completed, and congratulated the incoming chairperson.