Havre de Grace Now Allows Backyard Cottages and In-Law Units. Renting Them Short-Term Is Another Matter.

On October 5, the Havre de Grace City Council voted 6-0 on second reading to adopt a package of ordinances covering accessory dwelling units, according to Citizen Portal's account of the meeting. The package changes the city's parking, rental property, water and sewer rate, and zoning chapters. It answers a state mandate: according to the Maryland Department of Planning, HB 1466 required every county and municipality with zoning authority to adopt a local ADU law by October 1, 2026.

Coverage of ADU laws usually focuses on whether you are allowed to build. Havre de Grace's new package also addresses rentals, alongside the city's 2023 short-term rental law and its district map and license cap.

ADUs in the Rental Ordinance

Ordinance 1230 is the piece of the package that amends the city's rental property chapter. The hearing draft posted on the city's site addresses occupancy and long- and short-term rentals of ADUs.

The Ordinance 1230 hearing draft separates the two rental paths in these words:

"The short-term rental of an accessory dwelling unit requires a license subject to the maximum license cap and waiting-list requirements applicable under this section. A long-term rental of an accessory dwelling unit is not counted against the short-term rental license cap."

The Short-Term Rental District and License Cap

The cap and the district come from Chapter 147 of the City Code, which was adopted in March 2023 by Ordinance 1098. The code establishes a Short-Term Rental District. The district is bounded by Pulaski Highway to the north, North and South Juniata Street to the west, and the Susquehanna River to the south and east. Short-term rentals are not allowed at marinas.

Inside the district, the code limits how many licenses can exist. The City Council sets the cap, which may "not exceed 60 units," and decides each year whether to adjust that number or move the district's boundaries. Sixty is the ceiling. The operating cap is whatever the Council has set beneath it. The code also provides for a waiting list.

Construction Provisions in the Hearing Drafts

The construction-related hearing drafts address where ADUs may be allowed, their form and size, parking, water meters, fees and review timelines. Chapter 197 of the Acts of 2025 addresses ADU standards, application review, parking, utilities and fees.

The construction-related hearing drafts are the zoning draft, Ordinance 1232, the parking draft, Ordinance 1229, and the water and sewer rate draft, Ordinance 1231.

Citizen Portal reported that the Council accepted several amendments recommended by the Planning Commission at adoption, and the meeting video segment is labeled as covering ADU parking and definitions. The adopted text may differ from the posted drafts in those areas.

The city also didn't put any dollar amounts in the drafts. Ordinance 1231 directs the city's fee schedule to add a separate ADU entry rather than listing fees itself.

Owner Occupancy and Long-Term Rentals in the Drafts

The zoning draft addresses who may develop an ADU and the occupancy of the units.

The Ordinance 1230 draft addresses registration, licensing, inspection, occupancy and property maintenance for long-term ADU rentals. The zoning draft also addresses conditional-use approval and permits.

The Recorded Document in the Zoning Draft

The zoning draft addresses a city-approved confirmatory instrument recorded in the Harford County Land Records, including the relationship between the ADU and the main house and the ADU's conditions of approval and rental rules.

Historic District Review in the Zoning Draft

The zoning draft says that, where review is otherwise required, the Historic Preservation Commission reviews an ADU in the City Historic District before the Board of Appeals takes final action.

Questions to Answer Before Pricing a Lot for Its Second Unit

1. Is the lot inside the Short-Term Rental District, and what operating cap has the Council set this year?
2. Does the long-term rental income work on its own, without counting on a short-term license?
3. Is the property in the City Historic District?

A Short FAQ

How does Harford County's posted zoning code define an ADU? Harford County's posted zoning code, amended through February 9, 2026, defines an ADU as a self-contained unit "located within a single-family detached dwelling." The county text is available on the Harford County site.

Can a short-term rental license be applied for online? The city posts its short-term rental license application and district map online.

What does the zoning draft say about the effective date? The Ordinance 1232 draft says it takes effect no earlier than ten days after the public hearing on the zoning amendments closes. The city's adopted ordinance carries the official date.

This post is general information about public ordinances, not legal, tax or financial advice. Confirm your own property's situation with the City of Havre de Grace Planning Department, an attorney or a tax professional before you commit.

If you're looking at a Havre de Grace property with a garage, a large rear yard or a basement that could become a second unit, I can help you check where the lot sits on the district map, build a long-term rental budget, and line up the contractors to finish the project on schedule. Schedule a consultation with Rose at Rose Calderone.