Ocean City's Alcohol Ban Is Recorded in the Deeds, and It Still Shapes What a Rental Earns

Every deed in Ocean City carries a clause most buyers never think to ask about: a promise, dating back to the town's founding, that whoever holds title will never sell liquor on that land. City Solicitor Dorothy McCrosson confirmed as much at a recent council meeting, telling members that most, if not all, properties in town are deed-restricted against alcohol sales, layered on top of zoning rules and the borough's own liquor ordinance. It reads like a historical curiosity. For anyone weighing an Ocean City purchase as a rental property rather than a personal beach house, it is closer to a structural fact about the local market, one that has shaped hotel supply, rental demand, and home values for more than a century.

A Restriction Written by Four Ministers in 1879

Ocean City was founded in 1879 by four Methodist ministers, Ezra B. Lake, James Lake, S. Wesley Lake, and William Burrell, who purchased the barrier island with the intent of building a Christian seaside resort. In 1881 the Ocean City Association passed a set of blue laws enforcing Sabbath observance, banning swimming, horseback riding, and business on Sundays. The alcohol prohibition came later and outlasted the rest. The manufacture and sale of alcohol was formally outlawed in 1909, more than a decade before national Prohibition began. When Prohibition ended in 1933, Ocean City used New Jersey's local option law, which lets individual towns set their own liquor licensing rules, to keep its ban in place. The town has never issued a retail liquor license since. The last serious attempt to loosen the rule came in 2012, when a referendum asked voters whether restaurants could allow diners to bring their own wine or beer. Nearly 70 percent voted no.

The Rule Still Lives in the Title Chain

What makes this more than town trivia is where the restriction actually sits. The restriction appears in several layers at once, including the ordinance, the zoning, and the deeds themselves. McCrosson laid out the layers at a council meeting covered by the Ocean City Sentinel:

Another hurdle that would have to be addressed is that most, if not all properties in Ocean City are deed-restricted against the sale of alcohol as well. There is the zoning, the administrative code, and then somebody would have to grapple with the Ocean City Association restriction against the sale of intoxicating liquors.

For a typical residential buyer, this rarely surfaces during a closing, since it applies townwide rather than singling out one lot. But it explains something concrete that a visitor notices within a day of arriving: there are no bars on the boardwalk, every restaurant in town operates on a bring-your-own-bottle basis, and the borough's code still spells out, section by section, that no restaurant, cafe, or food establishment may permit alcohol on its premises. Any commercial redevelopment proposal on the boardwalk has to work around that fact rather than through it, regardless of how much capital stands behind the project.

Fifty Years Without a New Hotel

The alcohol restriction connects to a second fact that matters more to anyone thinking about rental income: Ocean City has not opened a new hotel in more than fifty years. Eustace Mita, founder and CEO of Icona Resorts, has pointed to this directly while pitching his own hotel proposal, arguing the town badly needs more short-stay rooms to go along with its self-description as America's Greatest Family Resort. Over the decades, roughly 2,000 hotel rooms disappeared from town as older hotels were converted into condos and shore homes, typically rented out for stretches longer than the three or four night stays a hotel would offer.

That conversion did not happen by accident. A hotel that can never carry a liquor license is a harder sell to lenders and operators than the same footprint turned into homes rented by the week. Mita has said as much publicly, noting that few hotel developers would take on a property without the option of a bar or restaurant liquor service. The boardwalk zoning between Sixth Street and 14th Street reinforces the same outcome from a different angle, since it permits retail, restaurants, and amusements but not hotels outright, meaning any hotel project also needs a zoning change or a redevelopment designation just to get out of the ground.

Put together, the two rules have done something a market analyst would recognize immediately: they have held new hotel-room supply near zero for two generations while short-stay vacation demand kept growing. That demand had one real outlet left, renting somebody's house.

The Test Case Playing Out at Sixth Street

The clearest place to watch this mechanism in real time is the old Gillian's Wonderland Pier site. The amusement pier had operated on the boardwalk for nearly a century, with the Gillian family running it since 1965. Facing $8 million in defaulted mortgage loans, the family sold the real estate to Mita in 2021 to avoid a sheriff's auction, and the park finally closed for good after the 2024 season, with Mayor Jay Gillian calling it no longer a viable business.

Mita's original pitch was a 252-room hotel called Icona in Wonderland, priced between $135 million and $155 million, with plans to preserve the pier's Ferris wheel and historic carousel. The proposal has since been downsized, and by September 2026 Mita told the Philadelphia Inquirer he was ready to commit another $200 million to the project, a larger figure than his initial estimate. To build anything beyond retail and amusements on that site, the city first had to designate it an area in need of rehabilitation, the legal mechanism that lets council negotiate redevelopment terms directly with a developer. Council pursued that path in early 2026 and hired an independent planner to evaluate options.

The designation did not go unchallenged. Community groups, including the Plaza Place Civic Association, filed suit over it, with the association's Jack Gutenkunst calling the designation flawed and arguing it strips away planning protections residents had relied on. A nearby resident, Marie Crawford, framed the stakes in dollar terms, telling the Inquirer that the real estate behind the pier would be degraded by the hotel along with the neighborhood's character. The fight became large enough that WHYY covered it as the defining issue of Ocean City's 2026 mayoral race, with the planner's redevelopment report landing just days before voters went to the polls in May. Mayor Gillian, whose family sold the site to Mita in 2021, remains in office as the process continues.

What Either Outcome Means If You Own a Rental Here

If the hotel is eventually built, even in its current scaled-back form, it would be the first real addition to Ocean City's short-stay hotel inventory in half a century. Two hundred or so rooms would not flood a market with thousands of rental homes and condos, but it would end a run of zero hotel competition for the three and four night beach trips that currently have nowhere to go but an owned home.

If the project stalls again, as an earlier boutique hotel version from Mita did before it, or gets scaled down further through the pending legal challenge, the supply picture that has supported rental-home demand for fifty years holds steady. Either way, the mechanism behind Ocean City's rental economics stops being a mystery once you trace it back: a century-old prohibition on liquor licensing, reinforced by boardwalk zoning that permits retail and amusements but not hotels, has kept new hotel supply near zero for two generations. Every vacationer who wanted a short weeklong or weekend beach trip during that stretch had one practical option, and it wasn't a hotel room.

Common Questions From Rental Buyers

Does the deed restriction affect my ability to operate a short-term rental? No. The restriction addresses selling alcohol, not renting the home. It has no bearing on short-term rental permits, registration, or occupancy rules, which fall under separate zoning and rental ordinances.

Can guests bring their own alcohol to a rental home? Yes. The borough's code bars alcohol in restaurants, cafes, and public spaces, but treats private homes as private property. A private gathering that isn't open to the general public falls outside the restriction.

Does the ban matter more for commercial buyers than residential ones? Yes, in a specific way. Anyone hoping to buy a commercial parcel and open something like a bar or liquor store runs into the deed restriction as a hard stop no matter what the zoning allows. That's a large part of why Ocean City's restaurant scene runs on bring-your-own-bottle rather than liquor sales, and why a project as well-capitalized as the one at Sixth Street still has to negotiate its way around the rule rather than through it.

If you're weighing an Ocean City property as a rental investment and want to think through what a resolution at Sixth Street could mean for your specific block or building type, that's exactly the kind of on-the-ground read Teresa Campama brings to a conversation before you write an offer.