House committee passes bill to stop cities from regulating Airbnbs and other short-term rentals

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An Ohio House committee on Tuesday passed legislation that would prevent local governments from directly banning or regulating short-term rentals like Airbnb within their borders.

The legislation prevents cities and counties from issuing ordinances prohibiting businesses or people from renting property for less than 30 days at a time. Additionally, it prevents them from passing laws that “regulate the number, length, or frequency of rental periods” of short-term rentals.

Proponents of House Bill 563 say it’s about property rights – the government shouldn’t stop landlords from subletting their homes. Opponents argue that the state, under the bill, would usurp local zoning laws, create nuisances and allow housing to clutter that does not house tenants for several months of the year. The debate pits the state government against local governments in Ohio, some of which have restricted the right of individual and commercial landlords to rent their homes on Airbnb and similar sites.

“I’m a little torn on this because I generally trust local governments to make a decision,” Rep. Jamie Callender, R-Concord, said. He voted for the bill but expressed some hesitation about local control and the possibility of Airbnbs hosting rowdy parties in residential neighborhoods.

” This is a difficult question. I fell on the owner’s side.

Republican Representatives Sarah Fowler Arthur of Ashtabula and Ron Ferguson of Wintersville introduced the bill. Speaking to lawmakers, Ferguson noted that several Ohio communities have passed laws restricting short-term rentals.

Arthur said that while cities in Ohio haven’t imposed any permanent moratoria on rentals, the bill is a way to be proactive. In an interview, she said the intent of the bill was to bring parity between long-term rentals like apartments and short-term rentals like Airbnbs.

A range of local governments, both individually and through their collective lobby groups, opposed the bill.

“If a township says, ‘We don’t want short-term rentals in our residential areas,’ I can almost guarantee it will be challenged under this bill,” said Marissa Myers, lobbyist at the Ohio Township Association.

“It specifically says you can’t regulate how many, how long or how often.”

Property investors and business groups have backed the legislation, saying rentals open the door to additional income for landlords and more options for tourists. Chamber of Commerce lobbyist Tony Long said short-term rentals are also useful for house-to-house families or large families going on vacation. The bill, he said, strikes a balance between public safety and personal property rights.

The legislation allows cities to limit short-term rentals for certain reasons usually related to the prevention of public nuisance or crime, as long as the regulations apply to both short-term and long-term rentals.

The bill responds to the rise of companies like Airbnb, which serves as an alternative to traditional hotels by allowing people to rent all or part of their accommodation to others on the platform. The company has hosted more than a billion guests in 100,000 cities since its launch in 2008, according to the company. It made nearly $6 billion in revenue in 2021, according to its financial statements.

“We support this bill because it ensures that Ohioans will continue to have the opportunity to earn meaningful income through short-term rental of their homes, while allowing local municipalities to pass laws on short-term rentals that address important considerations such as occupancy and public safety, in addition to the restrictions that apply to long-term rentals,” said Lara Dailey, chief policy officer at Airbnb.

VRBO, an industry competitor, did not respond to an inquiry.

Local laws

Several cities in Ohio have passed their own short-term rental ordinances, creating a hodgepodge around the state.

For example, Columbus requires short-term homeowners to follow certain rules and register with the city. The city may deny permits for certain harmful activities or police attention. Cincinnati does the same, while requiring landlords to affirm that the rental complies with local building, zoning and housing codes.

Dublin only allows hosts to rent their units for up to two weeks per calendar year and to submit information to the city on the number of tenants who will occupy the residence, the number of cars they bring and the rental price.

North Royalton only allows hosts to rent out their properties 14 days a year as long as they use them as their primary residences for the other 351.

Early last year, Avon instituted a 180-day moratorium on short-term rentals. Seven Hills did the same, according to Cleveland.com.

Fowler-Arthur said the law wouldn’t necessarily prevent cities from collecting information about property owners. However, this would require cities to treat long-term and short-term rentals the same.

Tax question

HB 563 does not address taxes that short-term rentals must pay. Several local government groups and a hotel industry lobby have called on lawmakers to consider the issue in the bill.

Myers said hotels may be required to pay a lodging tax. She asked lawmakers to “consider making it clear that lodging taxes apply here as well.”

Andrew Herf, executive director of the Ohio Association of Convention and Visitors Bureaux, said that with few exceptions, short-term rentals do not pay lodging taxes.

“They’re taking visitors out of hotels where the taxes would be discounted and putting them into a competing rental structure that doesn’t support the tax base of the local governments where they operate,” he said.

Joe Savarise, CEO of the Ohio Hotel and Lodging Association, took a neutral stance on the bill. He said no type of rental should be outright banned and that local governments should provide appropriate oversight and regulation.

However, he said short-term rentals should be subject to the same sales and lodging taxes as hotels and motels.

Conflict of interest?

Fowler operates an Airbnb in Genève-sur-le-Lac with her husband, she said in an interview. She said House counsel saw no conflict of interest given her ownership.

She said the experience gives her perspective on how landlords deal with local governments when setting up an Airbnb.

After the committee vote on Wednesday, the bill will go through the full House at the discretion of leaders. From there, it must pass through the Senate and be approved by the Governor to become law.

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