News: Church Sues Maryland City After $18,000 in Fines for Homeless Shelter Ministry

St. Paul’s By-the-Sea Episcopal Church in Ocean City, Maryland, has officially filed a federal lawsuit against the city after amassing approximately $18,000 in fines for operating an overnight homeless shelter ministry. The church alleges that the city’s daily fines of $1,000, which began on June 8, 2026, constitute an unlawful interference with their First Amendment rights and a violation of the Religious Land Use and Institutionalized Persons Act (RLUIPA). While the city maintains that the fines are strictly about zoning and safety compliance, the church argues that providing shelter to the "least of these" is a core tenet of their religious exercise that should be protected from government overreach.

The Conflict Between Faith and Zoning

At the heart of this legal battle is Dewees Hall, a space owned by St. Paul’s By-the-Sea that has served as a sanctuary for those with nowhere else to go. For the parishioners and leadership at St. Paul’s, this isn't just a social service; it is a spiritual mandate. However, for Ocean City officials, the issue is categorized under land use and building codes.

Since early June, the city has issued daily citations, claiming the church is operating an unpermitted "shelter" in a zone that does not allow for such residential use. The church, however, sees it differently. They view their "hospitality room" as an extension of their worship, a place where the gospel is lived out through the practical act of providing warmth, safety, and dignity to the unhoused population of the Maryland coast.

What Is RLUIPA and Why Does It Matter?

The Religious Land Use and Institutionalized Persons Act (RLUIPA) is a federal law passed in 2000 that protects individuals and religious institutions from discriminatory or unduly burdensome land-use regulations. In the case of St. Paul’s By-the-Sea, their legal team argues that Ocean City is placing a "substantial burden" on their religious exercise.

When a city uses zoning laws to prevent a church from fulfilling what it considers a divine calling, like feeding the hungry or housing the homeless, RLUIPA provides a legal shield. The law essentially states that the government cannot implement land-use regulations in a way that treats a religious assembly on "less than equal terms" than a non-religious assembly, or in a way that substantially limits religious freedom unless there is a "compelling government interest" and it is the "least restrictive means" of achieving that interest.

For Ocean City, the "compelling interest" is likely public safety and fire codes. For the church, the "least restrictive means" would be working together to ensure safety rather than bankrupting a ministry with $1,000-per-day fines.

The Human Cost of $1,000-Per-Day Fines

While the legal arguments are debated in courtrooms, the human cost is felt on the streets. Ocean City is a beautiful resort town, but like many seasonal destinations, it carries a hidden population of people experiencing homelessness. When the sun goes down and the tourists retreat to their hotels, many have nowhere to go.

St. Paul’s "hospitality room" provided a thin line of defense against the elements. By issuing $18,000 in fines in less than three weeks, the city has created a financial cliff for the church. These funds, which could have been used for food, clothing, and social services, are now tied up in a legal standoff.

A Biblical Perspective on "The Least of These"

As Christians, we are often caught between the "laws of the land" and the "law of love." Scripture is clear about our responsibility to the vulnerable. In Matthew 25:35-36, Jesus says:

"For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me."

When the disciples asked when they had done these things, Jesus replied that whatever they did for the "least of these," they did for Him. This is the "True North" that Dr. Layne McDonald often speaks about, finding our purpose in the alignment of our actions with God’s heart.

When a church feels called to house the stranger, it isn't just following a philanthropic impulse; it is responding to a direct command from the King of Kings. This doesn't mean safety codes shouldn't be followed, but it does mean that the priority should always be the preservation of life and the exercise of compassion.

Finding a Way Forward: Safety and Sanctity

Is it possible for a city to maintain safety and for a church to maintain its ministry? History says yes. In many cities across America, "mercy ordinances" or special use permits allow churches to provide temporary shelter during cold months or emergency situations.

The tragedy in Ocean City is the breakdown of communication that led to a $1,000-a-day fine rather than a collaborative solution. When we look at the world through the lens of faith and purpose, we see that the goal of the city and the goal of the church should ideally be the same: a flourishing community where everyone is safe.

5 Ways Your Church Can Navigate Community Ministry

If your church is looking to start a similar ministry, or if you are feeling the "church hurt" from seeing ministries shut down, here are five practical steps to take:

1. Engage Early with Local Officials: Before launching an overnight ministry, meet with the fire marshal and zoning board. Proactive transparency can prevent reactive fines.

2. Know Your Rights: Understanding RLUIPA and the First Amendment is essential for modern ministry leaders. You can find resources and leadership coaching to help navigate these complexities.

3. Build Community Coalitions: A city is less likely to fine a church if that church has the public support of local businesses, non-profits, and other faith leaders.

4. Prioritize Safety Without Sacrificing Mission: Install the necessary smoke detectors, clear the exits, and maintain a log. Showing that you value life as much as the city does removes their primary leverage.

5. Stay Rooted in Prayer: When the legal battles get loud, the voice of God can feel quiet. Spend time in prayer and reflection to ensure your heart remains focused on the people, not just the "win" in court.

The Heart of the Matter

At Layne McDonald Ministries, we believe that every person’s story matters to God. Whether you are the pastor facing a lawsuit or the person seeking shelter in Dewees Hall, you are seen. You are loved. And your story is not over.

The lawsuit filed by St. Paul’s By-the-Sea is more than a legal document; it is a testimony. It’s a statement that says the lives of the homeless in Ocean City are worth fighting for. It reminds us that our faith must have hands and feet, even when those feet have to walk into a courtroom.

What Can We Do?

As this case moves through the federal court system, we can pray for a resolution that honors both the law and the Gospel. We can pray for the leaders of Ocean City to have hearts of wisdom and for the leadership of St. Paul’s to have hearts of courage.

If you are struggling with your own sense of purpose or feeling overwhelmed by the demands of ministry and leadership, you don't have to walk that path alone. Explore our books and resources or reach out for personal mentoring. We are here to help you find your true north in every season of life.

Stay tuned for more updates on this story and other faith-based news at www.laynemcdonald.com.