About 50% of short-term rental properties in Annapolis listed on platforms like Airbnb and Vrbo are not licensed with the city, according a report released Tuesday.

The report by the city’s Department of Planning and Zoning said there are about 560 residential properties advertised for quick stays in Annapolis at any given time. Yet as of June, the city had issued just 289 short-term rental licenses.

That means Annapolis is missing out on revenue from licenses and special taxes for 49.5% of the short-term rentals. It also means those rental properties are effectively unregulated and not subject to safety inspections or other compliance checks.

“This persistent gap highlights the continued need for active monitoring and enforcement to ensure [short-term rental] activity complies with city regulations,” the report said.

When asked about the report, Annapolis Mayor Gavin Buckley said he was concerned about the proportion of unlicensed short-term rentals.

“Inspections are a matter of safety,” Buckley said. “They ensure compliance with fire codes, structural integrity, and environmental health. By identifying hazards like faulty wiring, mold, or inadequate emergency exits, we can protect visitors and neighbors.”

But the term-limited Democrat, who leaves office at the end of the year, described himself as confident that the Annapolis planning and zoning department, led by director Christopher Jakubiak, would bring those unlicensed properties into compliance with city code.

“We appreciate what well-regulated short term rentals do for the economy,” Buckley said.

It’s not clear how much revenue the city may be losing. It gets about $3 million a year from the hotel tax, but officials could not say how much of that comes from short-term rentals as opposed to hotels and traditional bed and breakfasts.

The report’s revelation of a large number of unlicensed short-term rentals in Annapolis comes as their prevalence grows: Over the past two years, the number of properties listed online as short-term rentals increased by about 17%, according to the report.

The report cited 2020 data from the U.S. Census Bureau that estimated short-term rentals account for up to 1.6% of the total U.S. housing stock. In Annapolis, the report said, 2.9% of all housing units are used as short-term rentals.

“This above-average share, approximately double the national trend, reduces the number of housing units available for homeownership or long-term rental, contributing to increased pressure on the local housing market,” the report said.

Most of the city’s short-term rentals are downtown in the historic district, near the U.S. Naval Academy, St. John’s College and the State House.

In a statement, an Airbnb spokesperson said the company “has been part of the Annapolis community for decades and we take any complaint seriously, but according to the city’s own report, short-term rental complaints are exceedingly rare.”

The Airbnb spokesperson noted the city waives short-term rental license requirements annually for the Naval Academy’s graduation ceremonies and the spring and fall boat shows. They said that exemption “underscores how important hosting is to residents’ pocket books and the city’s economy.”

“We’re committed to working closely with Annapolis officials and providing the city with tools to take action on specific listings and promote responsible hosting, ensuring that tourism continues to benefit every corner of the city,” the spokesperson added.

Vrbo did not respond to a request for comment about the lack of licenses.

Alderman Harry Huntley, a Democrat who represents that area and is running to retain his City Council seat, introduced legislation this summer to limit the proliferation of short-term rentals citywide.

His bill would prohibit the city from issuing new short-term rental licenses after a block reaches 10% of properties used for them.

Huntley told The Banner that the short-term rental report “just underscores the urgency of” reining in the industry with his legislation.

“We need to stem the bleeding on these most oversaturated blocks right now,” Huntley said. “Those should be neighborhoods. Those should be communities. Those should be places where you can know your neighbors.”

One amendment introduced by Alderman Robert Savidge, also a Democrat, would exempt people who live in their residences but rent out rooms on a short-term basis — known as owner-occupied short-term rentals. Another would remove a provision of Huntley’s bill that grandfathered blocks already exceeding 10% of short-term rentals.

Huntley supports the former and opposes the latter.

He has said the bill responds to concerns from his constituents who feel like they’re losing their community.

The report appeared to validate those concerns.

“The most direct and obvious impact is a transition away from traditional residential communities comprised of primarily long-term residents to more transitory communities which accommodate more tourists,” it said. “While there is still a majority of properties in the downtown area occupied by long-term residents, some blocks have seen a more substantial shift toward short-term occupants.

“This changing neighborhood composition,” the document continued, “can have wide-ranging outcomes including perceptions of places being less safe, parking impacts, properties being maintained, and other nuisance issues.”

This article has been updated with a statement from Airbnb.