Note on jurisdiction: This guide applies to properties located within the City of Cambridge (Dorchester County). If your property is outside city limits (unincorporated Dorchester County), the county’s STR code governs; it mirrors much of the City’s structure but apply the county’s standards and contacts.

Overview: Are short-term rentals allowed in Cambridge, MD?

Yes. Short-term rentals are permitted in Cambridge, but only with a current City STR permit. The City’s STR ordinance (Ordinance No. 1204, effective September 12, 2022) creates a clear licensing regime with two permit types (Type 1: owner/operator-occupied; Type 2: non-owner-occupied), operating standards, safety and parking requirements, inspection and enforcement authority, and a three-year permit term.

Source: www.choosecambridge.com/DocumentCenter/View/2202/Short-Term-Rental-Guidebook
Source: www.choosecambridge.com/DocumentCenter/View/2110/Ordinance-No-1204---Short-Term-Rentals---As-Amended

How to start a short-term rental business in Cambridge

• Confirm property is inside City limits. If outside City limits, Dorchester County rules apply.
• Choose permit type:
  • Type 1 (owner/operator-occupied): you or the lease-backed operator must be living on-site.
  • Type 2 (non-owner-occupied): whole-unit rental with no on-site owner/operator.
• Pre-application preparation:
  • Resolve any City-issued violations before applying.
  • Ensure minimum sleeping area requirement is met (at least shared use of a full bathroom).
  • For Type 2, the unit must also be registered as a non-owner-occupied residential dwelling unit under City Code § 4-42.
  • Arrange insurance coverage sufficient for personal injury liability for guests.
  • Prepare a parking plan that conforms to limits (see regulations below).
• Gather required documents (see Required documents, permits, licenses, and guidelines).
• Submit complete application and fee online; incomplete applications are not accepted.
• After permit issuance, begin collecting and remitting applicable taxes; posting indoor notifications is required.
• Operate per rules and maintain a 24-hour contact who can respond to complaints within one hour.
• If selling or changing property, remember: STR permits are non-transferable; plan your exit timing accordingly.

Application portal and resources: www.choosecambridge.com/150/Forms-Permits-Ordinances
Source: www.choosecambridge.com/DocumentCenter/View/2419/2024-01-STR-Application-Form

Required documents, permits, licenses, and guidelines

• Permits
  • Type 1 STR Permit (owner/operator-occupied): $100; three-year term; renewal same fee; same requirements as initial application.
  • Type 2 STR Permit (non-owner-occupied): $200; three-year term; renewal same fee; same requirements as initial application.
• Registration prerequisite for Type 2
  • Property must be registered as a non-owner-occupied residential dwelling unit per City Code § 4-42; failure to maintain registration can trigger suspension/revocation of the STR permit.
• Application contents (submit via online form; no paper applications)
  1. List of owners, operators, agents with names, addresses, phone numbers, and emails.
  2. Complete description of the premises.
  3. Narrative describing the available parking (onsite/off-street, on-street spaces).
  4. Name, address, and 24-hour telephone number of contact person(s) authorized to respond to complaints.
  5. Attestation that owners maintain required insurance and that the STR has smoke detectors and fire extinguishers required by law.
  6. Copy of standard lease agreement and house rules.
  7. Scaled plan/sketch showing room labels, structures, decks/patios, pools, garages, fences, parking spaces, and layout details.
  8. Maximum occupancy calculation based on bedroom count, size, configuration, furnishings, and applicable City/State provisions.
  9. Notarized signatures (application includes attestation) affirming truthfulness; material misrepresentations can lead to denial, suspension, or revocation.
• Taxes
  • Collect 5% Hotel Rental Tax (Occupancy Tax) on each rental; remit monthly to Dorchester County using the Hotel Tax Return form. If using platforms (Airbnb, VRBO, Expedia, etc.), City hotel occupancy taxes due to the City may be automatically deducted and remitted by the platform; confirm details with the platform and local finance office.
  • The visitor pays the tax; you collect and remit.
  • Source: dorchestercountymd.com/wp-content/uploads/2017/06/Hotel-Tax-Return.pdf
  • Source: www.choosecambridge.com/DocumentCenter/View/2202/Short-Term-Rental-Guidebook (p. 7)
• Insurance and life safety
  • Maintain insurance sufficient for personal injury liability of guests.
  • Install smoke and carbon monoxide detectors per applicable State and local law; test monthly and change batteries annually.
  • Provide one properly mounted and accessible 5-pound fire extinguisher on each floor.
  • Ensure each bedroom has a window or other direct means of emergency egress.
• Post inside the STR (conspicuous location)
  • Off-street parking location; available public parking; prohibition of parking on landscaped areas.
  • Quiet hours and noise restrictions.
  • 24-hour contact person and phone number.
  • Property maintenance requirements.
  • Trash pick-up requirements (bin locations and recycling info as applicable).
  • City emergency numbers.
  • Notice that failure to comply with occupancy and parking requirements violates City Code.
• Inspections and enforcement
  • Inspections can occur upon complaint per City code enforcement policies.
  • If law enforcement issues a citation, the owner/operator/agent will be called; they must contact occupants within one hour. A second complaint during a stay requires corrective action under your lease/house rules.
  • Municipal infraction penalties: $200 initial; $500 repeat violation; each day of violation is a separate offense.
  • Permit revocation if three (3) or more confirmed citations are issued for different occupants at a permitted STR in any six-month period.
  • After revocation, no STR permit may be issued for that property for six months.
  • Appeals: file written appeal within ten business days to the City Manager; City Manager’s decision is final.

Specific regulations for short-term rentals in Cambridge (City and State context)

• Permit classification
  • Type 1: owner or operator-occupied; owner/operator generally present; minimum sleeping area with shared full bathroom; no outstanding City violations.
  • Type 2: non-owner-occupied; owner/operator generally not present; designated operator or agent; minimum sleeping area with shared full bathroom; no outstanding City violations.
• Permit lifecycle
  • Non-transferable; expires three years from issuance; renewal available up to three months before expiration; renewal fee same as initial.
  • The City can limit the number of permits by resolution if deemed in the City’s best interest.
• Occupancy and use
  • Rentals for fewer than four consecutive days in a calendar year are not considered STRs.
  • Monthly or longer leases are not considered STRs.
  • Units in city-approved hotels, motels, bed and breakfasts, and timeshares are excluded.
  • Minimum sleeping area standard: at least shared use of a full bathroom; Cambridge relies on bedroom size/configuration to determine maximum occupancy.
  • Dorchester County (outside City limits) references minimum sleeping area sizing of 70 square feet for one occupant plus 50 square feet per additional occupant; apply this as context when planning occupancy.
• Parking and neighborhood impacts
  • If the STR has private parking (driveway/private lane), guests may use no more than one on-street space.
  • If no private parking exists, maximum two on-street spaces.
  • No parking in public alleys, access easements, or landscaped areas (yards).
• Taxes (City/County/State context)
  • 5% Hotel Rental Tax collected from guests; remit monthly to Dorchester County; forms and contact info below.
  • Maryland 2025 law centralizes certain platform remittances to the Office of the Comptroller; implementation is phased and not yet fully in effect; continue to ensure taxes are paid and reconcile with platforms as policies change.
• Age and conduct
  • No STR may rent to anyone under 21 years of age.
  • Operators must inform guests of City ordinances (noise, parking, nuisances).
• Safety and posting
  • Smoke/CO detectors, fire extinguishers, emergency egress windows are required.
  • Posted house rules, 24-hour contact, quiet hours, and parking instructions must be visible inside the unit.

Sources:
City STR Ordinance: www.choosecambridge.com/DocumentCenter/View/2110/Ordinance-No-1204---Short-Term-Rentals---As-Amended
Guidebook (operational guidance): www.choosecambridge.com/DocumentCenter/View/2202/Short-Term-Rental-Guidebook
Application and renewal details: www.choosecambridge.com/DocumentCenter/View/2419/2024-01-STR-Application-Form
Dorchester County code (unincorporated areas): ecode360.com/45795229
Maryland 2025 tax remittance changes (platform-centric; rollout delayed): conduitstreet.mdcounties.org/2025/04/17/general-assembly-adopts-maco-backed-delay-of-tax-overhaul-for-airbnb-type-rentals/ and news.bloombergtax.com/daily-tax-report/maryland-revises-law-on-collection-remittance-hotel-rental-tax-by-intermediaries

Contact information for local authority in charge of STRs

• City of Cambridge
  • Mailing: City of Cambridge, 410 Academy Street, P.O. Box 255, Cambridge, MD 21613
  • Phone: 410-228-4020
  • Fax: 410-228-4554
  • Email: info@choosecambridge.com
  • STR application and registration email: strregistration@choosecambridge.com (for questions, updates to 24-hour agent, etc.)
  • Forms, permits, ordinances portal: www.choosecambridge.com/150/Forms-Permits-Ordinances
  • Report a Concern (complaints): www.choosecambridge.com (navigate to Citizen Requests & Feedback / Report a Concern)
• Dorchester County (Hotel Rental Tax)
  • Phone: 410-228-7291
  • Hotel Tax Return form: dorchestercountymd.com/wp-content/uploads/2017/06/Hotel-Tax-Return.pdf
• Police (emergencies and noise/parking incidents)
  • Non-emergency interactions via Report a Concern; emergency: contact Police Department at 410-228-3333.

Sources:
Guidebook contact section: www.choosecambridge.com/DocumentCenter/View/2202/Short-Term-Rental-Guidebook (p. 13)
Forms/Permits/Ordinances: www.choosecambridge.com/150/Forms-Permits-Ordinances
Hotel Tax Return: dorchestercountymd.com/wp-content/uploads/2017/06/Hotel-Tax-Return.pdf

Links to source pages

• City STR Owner Guidebook: www.choosecambridge.com/DocumentCenter/View/2202/Short-Term-Rental-Guidebook
• City STR Ordinance No. 1204 (as amended): www.choosecambridge.com/DocumentCenter/View/2110/Ordinance-No-1204---Short-Term-Rentals---As-Amended
• City STR Application Form (rev. 1/2024): www.choosecambridge.com/DocumentCenter/View/2419/2024-01-STR-Application-Form
• City Forms, Permits, Ordinances portal: www.choosecambridge.com/150/Forms-Permits-Ordinances
• Dorchester County Hotel Rental Tax Return form: dorchestercountymd.com/wp-content/uploads/2017/06/Hotel-Tax-Return.pdf
• Dorchester County STR Code (unincorporated areas): ecode360.com/45795229
• Maryland 2025 platform tax remittance changes (Conduit Street, MD Counties): conduitstreet.mdcounties.org/2025/04/17/general-assembly-adopts-maco-backed-delay-of-tax-overhaul-for-airbnb-type-rentals/
• Bloomberg Tax coverage of Maryland law changes: news.bloombergtax.com/daily-tax-report/maryland-revises-law-on-collection-remittance-hotel-rental-tax-by-intermediaries

Operational checklist for investors

• Confirm zoning and property restrictions (HOA/condo/deed) before buying; a City permit does not override private covenants.
• Select permit type and ensure compliance with occupancy, parking, and life-safety standards.
• File a complete application with all documents; pay the correct fee.
• Set up tax collection and monthly remittance to Dorchester County; reconcile platform deductions.
• Post all required notices inside the unit; ensure 24-hour contact can respond within one hour.
• Document maximum occupancy and communicate parking/quiet hours to guests.
• Calendar the three-year renewal and promptly update any agent/contact changes.
• Build exit timing into your investment plan: permits are non-transferable, and revocation triggers a six-month waiting period for a new permit.