The Annapolis City Council voted Monday night to restrict the number of short term rentals that can be on each city block.

The rules will prevent new licenses for short-term rentals from being issued if more than 10% of one side of a city block (defined as a “block face”) are already short-term rentals.

Alderman Harry Huntley, who introduced the ordinance, called it “a huge step forward to residents taking back our neighborhoods.”

Current short-term rentals will be allowed to renew their licenses through November 2027. That same year, the city will begin a lottery system aimed at decreasing the number of short-term rentals in the city to under the new 10% limit.

That lottery, Huntley said, will prioritize owner-occupied short-term rentals over rentals owned by people who don’t live in Annapolis or live in Annapolis and don’t occupy the home.

Three of the city’s eight wards have blocks that are currently above the 10% threshold, according to a staff report on the legislation from May. Most are in Ward 1, which includes the historic downtown, City Dock and the State House complex, and stretches down West Street.

There are an estimated 30 blocks above 10% capacity in Ward 1; an estimated five blocks in Ward 2; and an estimated seven blocks in Ward 8.

The 10% restriction would not apply during weeks with boat shows or commissioning for the Naval Academy, Huntley said. That would allow homeowners to offer rooms for the occasional weekend.

Alderwoman Karma O’Neill voted against the ordinance. O’Neill said during Monday night’s meeting that she thinks the city already fails to enforce existing rules for short-term rentals.

An August report showed that only half of Annapolis’ short-term rentals are properly licensed. The city has long grappled with how to handle the growing number of property owners who want to rent their homes on platforms like Airbnb and Vrbo.

The City Council also voted Monday to keep height restrictions in place for the planned redevelopment of City Dock.