Short-Term Rentals in Hancock County: Bar Harbor's VR-2 Cap

A hard numeric cap, not just a licensing requirement

Most Maine towns that regulate short-term rentals do it through registration, licensing, or occupancy rules -- Bar Harbor does that too, but it goes further. In a November 2, 2021 referendum, Bar Harbor voters approved Amendment 4 to the town's land use ordinance by a 1,260-840 vote, one of seven land-use amendments on that ballot, splitting vacation rentals into two categories: a VR-1 (a unit that is the owner's primary residence, rentable for stays as short as two nights) and a VR-2 (an entire dwelling that is not the owner's primary residence, rentable for stays of at least four nights). VR-2s -- the category that functions as a standalone investment or income property rather than a spare room or in-law unit -- are capped at 9% of the town's total number of dwelling units as measured each January. For 2024, that 9% cap worked out to 318 VR-2 registrations.

The cap doesn't work by revoking existing registrations outright. As of 2024 reporting, Bar Harbor had 470 VR-2s registered -- above the 318 cap -- because existing registrations from before the cap took effect are generally grandfathered in and allowed to renew, while new registrations are only issued as the total naturally declines (a property drops out, an owner doesn't renew, a registration lapses). That count was already falling: from 522 registered VR-2s in 2022 down to 470 in 2024. Every VR-2 and VR-1 must be re-registered annually by May 31, and a registration cannot be transferred to a new owner when a property sells -- meaning a buyer cannot simply assume they inherit the seller's VR-2 slot.

A real waitlist, and a real legal fight the ordinance won

Because the cap is set below the number of properties that would like to operate as VR-2s, Bar Harbor maintains a waitlist -- 36 properties were on it as of 2024 reporting, each waiting for the town's VR-2 count to drop below the 318 cap before a new registration opens up. For a buyer, this means a property advertised or previously used as a short-term rental in Bar Harbor is not automatically eligible to continue as one under new ownership, and a property with no rental history at all may face a genuine, unpredictable wait -- potentially years -- before a VR-2 slot becomes available, if one ever does at the current cap level.

This isn't an untested rule sitting on the books unenforced. Vacation rental owners challenged the ordinance in court, and in March 2024 Maine's Supreme Judicial Court (the Law Court) upheld Bar Harbor's regulation of short-term rentals, including ruling that only a simple majority vote -- not a supermajority -- was required for the 2021 referendum amendment to take effect. That litigation history matters for a buyer: this is a cap that has already survived a legal challenge at the state's highest court, not a rule likely to be struck down or abandoned on legal grounds.

The ordinance is also still actively evolving. In November 2025, the Town Council voted unanimously to adopt changes to the VR-1 side of the ordinance (Chapter 174 of the town code), simplifying the inspection process for owner-occupied rentals -- a reminder that while the VR-2 cap itself has held steady, the surrounding compliance details (inspection requirements, registration procedures) continue to change and should be reconfirmed directly with the town rather than assumed from an older summary.

What to actually check before buying for short-term rental use in Bar Harbor

1. Ask the town directly (Bar Harbor Planning & Code Enforcement) whether a specific property currently holds an active, registered VR-2 -- and get written confirmation, not a listing agent's assurance, since registrations cannot be transferred at sale in the way a permit might be for some other uses.
2. If the property has no existing VR-2 registration, understand you would be joining a waitlist (36 deep as of 2024) with no guaranteed or predictable timeline for a slot opening, given the cap sits below current registered demand.
3. Confirm the property's classification: a VR-1 (owner's primary residence, no waitlist mechanism reported) operates under materially different rules than a VR-2, and a plan built around occupying the home part-time while renting it out may fit the VR-1 category rather than VR-2.
4. Check the annual May 31 re-registration deadline and current inspection requirements directly with the town, since the VR-1 inspection process was itself revised as recently as November 2025.
5. Don't assume this ordinance is vulnerable to a future legal challenge -- Maine's highest court already upheld it in 2024, so plan around the cap as a durable fact of Bar Harbor's regulatory landscape rather than a rule that might soon be overturned.