On today’s show we’re coming to you live from Annapolis Maryland.

Annapolis is the capital of the state of Maryland. It’s also the home of the US Naval Academy. This is where the US Navy trains its officers. It’s also home to the world’s largest in the water boat show. It’s an important town because it is a state capital. But it is a small town. Total population is only 39,000. It’s small because it is geographically constrained.

On today’s show we’re going to do a small walking tour of Annapolis from a real estate perspective.

This town is decidedly anti development. It’s a vey quaint seaside town with historic homes set on narrow streets with cobblestone sidewalks. Many of the narrow century old townhouses have a flag pole jutting out from the side of the house. You won’t have to go very far to be reminded which country you are in. Most of the streets are one way streets and many of them are dead end streets. They’re dead end streets because in Annapolis it’s common to run out of land and come across the Chesapeake Bay.

The many inlets, rivers and coves make for a very intimate and extensive coastline. Many of the waterfront homes have a boat docked in front. The idyllic setting is one of the most picturesque coastal towns in all of North America. Real Estate is expensive here. Waterfront homes are priced usually between $2-3M.

Development in Annapolis is difficult because any development that falls within what is called a critical area must be sent to the State of Maryland Critical Area Commission for the Chesapeake and Atlantic Coastal Bays prior to receiving local zoning approval, or a building permit.

Generally speaking any property within 1000 feet of a waterway falls into the critical area overlay. In this zone, a whole bunch of extra rules come into play. Most of these rules are designed to protect the sensitive waterways of the Chesapeake and coastal regions.

For example, there are vegetation requirements. There are restrictions on waste transfer. You are unlikely to get a septic system approved on a property in the critical area overlay.

This is not an easy town to be a real estate investor. We saw an old townhouse in very poor condition. It had a public notice posted in the front window. The owner of the home was seeking to make improvements including new siding, new windows, and a small addition in the rear yard. The entire process had been opened up to public review. That home, is directly across the street from the courthouse and has been in distressed condition waiting for the application process to complete.

A review of commercial listings in Annapolis shows only a single 5 unit building for sale. The next closest listing is a commercial property for sale in neighbouring Parole which is one exit away on the freeway.

Annapolis is a difficult place to get anything approved. Residents are decidedly anti-development. This is why you see very few new structures in the town at all.

Older structures are governed by the Annapolis Historic Preservation Commission which has final say on any changes to properties within the historic district. For example, the Annapolis Waterfront hotel recently wanted to update the Awnings, fence and landscaping. This too had go in front of the Historic Preservation Commission for comments and approval. We’re not even talking about any permanent structures. We’re talking about awnings, fence and landscaping.

As you think about undertaking projects, pay close attention to the rules in your municipality.