Ohio legislators seek to ban limits on short-term rentals, as industry grows

A bill pending in the Ohio General Assembly takes aim at government-imposed restrictions on short-term rentals, a fast-growing segment of the lodging economy.

Introduced in February, House Bill 563 would prohibit communities from banning paid stays of 30 or fewer days at houses, apartments or condominiums. The legislation also would bar local officials from capping the number of short-term rental properties in an area or limiting the duration or frequency of hosting.

Supporters say they’re championing private property rights and seeking to broaden the landscape of lodging options in the state. But detractors see the legislation as another attempt to chip away at home rule, the authority granted to municipalities under Ohio’s constitution.

A handful of states, including Arizona, Florida and Indiana, have approved similar laws. Comparable legislation was introduced last year in Michigan. The Ohio proposal comes as local governments are grappling with how to regulate a tough-to-track industry that spans everyone from homeowners offering up a spare bedroom to investors with portfolios of vacation rentals.

Airbnb Inc., a publicly traded company that operates a popular online booking platform, has been mobilizing its hosts to support the change in state law.

“Lawmakers need to know that hosts like you are partners in the economic growth of the state, and that any new legislation needs to protect the property rights of Ohio residents, as well as provide a powerful economic boost for local communities through healthy tourism,” the company wrote in a November email blast titled “help protect short-term rentals in Ohio.”

In early March, dozens of hosts submitted proponent testimony to a House committee.

“I have turned my shared home into a little business and I cherish 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 of HB 563 in order to continue serving others via my home.”

An Airbnb spokesman 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 discussion about short-term rentals in January, signing on as a lead sponsor with fellow Republican Rep. Sarah Fowler Arthur, of Ashtabula County.

An aide said Fowler Arthur was unavailable for an interview.

During a panel discussion in early March, though, she said that more than 12,500 Ohioans are serving as hosts.

“The impetus of this bill is to make sure that those individuals continue to have the freedom to open up their home, invite in tourism, invite in the industry and the growth in our neighborhoods that it brings,” Fowler Arthur told the audience at the event, hosted by the Ohio Chamber of Commerce in Columbus.

The chamber is behind the legislation, squaring off against opponents including the Ohio Association of Convention and Visitors Bureaus, whose members rely on local lodging taxes.

The rise of home-sharing, and the global reach of platforms including Airbnb and Vrbo, has prompted a flurry of local regulations across Ohio. Bay Village banned short-term rentals in 2019, after police broke up a large party at a lakefront estate. Mayfield imposed a permit requirement in 2018 and limited bookings to 30 days a year at any property.

Peninsula, nestled in the Cuyahoga Valley National Park, capped the number of short-term rental properties allowed in the village and imposed a 3% tax on reservations of up to 29 nights.

And Cleveland, which moved to define and regulate short-term rentals in the run-up to the 2016 Republican National Convention downtown, laid out different rules for owner-occupants and off-site investors.

Last year, two Cleveland City Council members proposed a series of changes, including annual licensing for hosts. The legislation, which has been languishing, also would require full-time operators in largely residential areas to have their properties reclassified as “lodging houses.”

That patchwork of regulations makes it difficult for homeowners to supplement their income and chills investments in real estate, argues Dan Acton, director of government affairs for the Ohio Real Estate Investors Association, whose members primarily focus on residential properties.

Acton and other promoters of House Bill 563 assert that short-term rentals are akin to traditional rental homes — and should be treated the same way by municipalities.

Opponents scoff at that notion. “There’s no difference between an Airbnb and a hotel,” said Mark Barbour, the law director for Bay Village, a suburb dominated by single-family homes.

It’s unclear how the legislation will impact existing local bans or restrictions.

“Anything that’s in place, our bill’s not retroactive,” Ferguson insisted. “It’s not going to affect anything at all.”

But the wording forbids local governments from both adopting and enforcing limits on short-term rental activity, aside from 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 views the bill as yet another salvo in an escalating power struggle. “We’ve had great challenges communicating to the General Assembly the need for respect and adherence to local control,” he said. “This is a powerful lobby that is promoting this bill.”

Hosts like Bise are watching the battle from afar.

She doesn’t object to the prospect of special permits or licenses for short-term rentals. But she hopes to keep building up a business that has become her primary source of income. When Airbnb urged hosts to speak up, she was happy to respond.

Bise, who rents a rambling house on Cleveland’s West Side, runs a five-bedroom Airbnb with her landlord’s blessing. The house goes for $478 a night and can accommodate 10 guests. At 50, she’s expanding on her hosting role by offering real estate concierge services, curating spaces for landlords, house-flippers and other clients.

Governments might be fumbling to get their arms around short-term rentals. For Bise, though, the disruptive industry has been nothing but a boon.

“It’s kind of like I’ve built everything around this business, and it started with Airbnb,” she said. “I’m never going to be a multimillionaire, but I’m supporting myself.”