Ohio lawmakers seek to ban limits on short-term rentals as industry grows
A bill pending in the Ohio General Assembly targets government restrictions on short-term rentals, a rapidly growing segment of the lodging economy.
Introduced in February, House Bill 563 would prohibit communities from prohibiting paid stays of 30 days or less in homes, apartments or condominiums. The legislation would also prevent local authorities from capping the number of short-term rental properties in an area or limiting the length or frequency of accommodation.
Supporters say they are defending private property rights and seeking to expand the landscape of accommodation options in the state. But critics see the legislation as another attempt to undo Home Power, the authority given to municipalities under Ohio’s constitution.
A handful of states, including Arizona, Florida and Indiana, have approved similar laws. Similar legislation was introduced last year in Michigan. Ohio’s proposal comes as local governments grapple with how to regulate a difficult-to-track industry that spans everyone from landlords offering a spare bedroom to investors with vacation rental portfolios.
Airbnb Inc., a publicly traded company that operates a popular online booking platform, mobilized its hosts to support the change in state law.
“Legislators need to know that hosts like you are partners in the state’s economic growth, and that any new legislation must protect the property rights of Ohio residents, as well as provide a powerful economic boost to local communities. through healthy tourism,” the company wrote in a November email titled “help protect short-term rentals in Ohio.”
In early March, dozens of hosts submitted the developer’s testimony to a House committee.
“I’ve turned my shared home into a small business and I treasure it,” Heather Bise, an Airbnb host in Cleveland, wrote in one such letter. “I live with my guests. I cook for them. I do their laundry. I am an ambassador for my neighborhood. I need your support from HB 563 in order to continue serving others through my home.”
An Airbnb spokesperson referred questions about the legislation to Rep. Ron Ferguson, a Republican whose district spans rural Jefferson, Monroe and Belmont counties. Ferguson said he joined the short-term rentals discussion in January, signing as a title sponsor with fellow Republican Sarah Fowler Arthur of Ashtabula County.
An aide said Fowler Arthur was unavailable for an interview.
At a roundtable in early March, however, she said more than 12,500 Ohioans were serving as hosts.
“The impetus of this bill is to ensure that these people continue to have the freedom to open their homes, to invite tourism, to invite industry and the growth of our neighborhoods that this brings. “, Arthur Fowler told the audience at the event organized by the Ohio Chamber of Commerce in Columbus.
The chamber is behind the legislation, taking on opponents including the Ohio Association of Convention and Visitors Bureaux, whose members depend on local lodging taxes.
The rise of home sharing and the global reach of platforms such as Airbnb and Vrbo has caused a wave of local regulations across Ohio. Bay Village banned short-term rentals in 2019, after police disrupted a large party at a lakeside estate. Mayfield imposed a permit requirement in 2018 and limited bookings to 30 days per year at any property.
The peninsula, nestled in the Cuyahoga Valley National Park, has capped the number of short-term rentals allowed in the village and imposed a 3% tax on bookings of up to 29 nights.
And Cleveland, which moved to define and regulate short-term rentals ahead of the 2016 Republican National Convention downtown, set different rules for homeowners and offsite investors.
Last year, two members of the Cleveland City Council proposed a series of changes, including an annual license for hosts. The legislation, which is languishing, would also require full-time operators in predominantly residential areas to have their properties reclassified as ‘shelving homes’.
This patchwork of regulations makes it difficult for homeowners to supplement their income and chills investment in real estate, says Dan Acton, director of government affairs for the Ohio Real Estate Investors Association, whose members focus primarily on residential properties.
Acton and other House Bill 563 proponents say short-term rentals are akin to traditional rental homes — and should be treated the same by municipalities.
Opponents scoff at this idea. “There’s no difference between an Airbnb and a hotel,” said Mark Barbour, chief legal officer of Bay Village, a suburb dominated by single-family homes.
It is unclear how the legislation will affect existing local bans or restrictions.
“Whatever is in place, our bill is not retroactive,” Ferguson insisted. “It won’t affect anything at all.”
But the language prohibits local governments from adopting and enforcing limits on short-term rental activity, outside of health and safety regulations that also apply to long-term rental properties. “I think there’s some ambiguity there,” said Kent Scarrett, executive director of the Ohio Municipal League.
Scarrett sees the bill as another salvo in a growing power struggle. “We had great challenges communicating to the General Assembly the need for respect and buy-in to local control,” he said. “It’s a powerful lobby promoting this bill.”
Hosts like Bise watch the battle from afar.
She does not oppose the prospect of special permits or licenses for short-term rentals. But she hopes to continue building a business that has become her main source of income. When Airbnb urged hosts to speak up, she was happy to respond.
Bise, who rents a country house on Cleveland’s West Side, runs a five-bedroom Airbnb with the blessing of its landlord. The house costs $478 a night and can accommodate 10 people. At 50, she is expanding her role as a host by offering real estate concierge services, organizing spaces for owners, tenants and other clients.
Governments may be fumbling to get their hands on short-term rentals. For Bise, however, the disruptive industry has been nothing but a boon.
“It’s kind of like I built everything around this business, and it all started with Airbnb,” she said. “I will never be a multi-millionaire, but I support myself.”