Ohio bill would block local regulations on Airbnbs, Vrbos and other short-term home

COLUMBUS, Ohio – A bill that would block local governments from banning or limiting Airbnbs, Vrbos and other short-term home rentals is advancing at the Ohio Statehouse, after clearing a preliminary committee vote last week.

House Bill 563 would pre-empt cities, villages and townships from banning short-term rentals outright, but also restricts them from limiting their number, or regulating how long or frequently they can be rented out.

It says local governments can still regulate the rental homes under fire codes, health codes, noise ordinances and other similar reasons, as long as the rules are the same that also apply to traditional long-term rentals.

State Rep. Sarah Fowler Arthur, an Ashtabula County Republican who rents her home in Geneva-on-the-Lake through Airbnb, said her bill is mostly aimed at preventing local governments from banning short-term rentals outright.

“We do feel that the home is an asset that an individual should be able to use,” Fowler Arthur said. “And they should be able to do that within the legal confines of the local and state government. But an outright ban does not respect their private property rights.”

If it makes it into law, the bill would be just the latest example of the Republican-controlled legislature of overruling the home-rule authority local governments are promised through the state constitution, and likely would draw legal challenges on those grounds. It’s also the latest example of the fight between emerging tech platforms disrupting traditional industries and governments that attempt to update their regulations to account for them.

To become law, HB563 still would require approval from the full House and then Senate before it would head to Republican Gov. Mike DeWine’s desk for his signature.

The bill has 27 Republican co-sponsors, and also has backing from real-estate investors, conservative policy groups and business groups, including the Ohio Chamber of Commerce, which says it creates a uniform, statewide regulatory scheme for an emerging industry.

“An adequate supply of housing and lodging options is critical to the economic growth of successful communities and to overall social mobility; that supply should not be restricted by unnecessary barriers imposed by local governments,” Jeff Dillon, a lobbyist for the conservative Americans for Prosperity, said in committee testimony.

Airbnb, which is backing the bill, said the company’s hosts made around $160 million in 2021, including $19 million from hosts who were new to the platform.

“We support this bill because it would protect the right of Ohioans to earn meaningful supplemental income through the short-term rental of their homes, while still allowing local municipalities to enact short-term rental laws that address important considerations such as occupancy and public safety, in addition to restrictions that apply to long-term rentals as well,” Lara Dailey, the company’s policy manager, said in a statement.

The bill has drawn opposition from myriad local governments, which say it would tie communities’ hands from enforcing their own standards. Opponents also include local tourism bureaus, which are funded by taxes assessed on hotels that short-term rentals often are exempt from.

Fowler Arthur told cleveland.com and The Plain Dealer her bill isn’t meant to overturn any existing regulations; she said her understanding is it will prevent communities from setting up future legislation banning short-term rentals, and to ensure there is parity between short-term and traditional, long-term rentals.

But Kent Scarrett, a lobbyist for the Ohio Municipal League, which opposes the bill, said his group’s reading is that it would immediately override local regulations.

The Cuyahoga County Mayors and Managers Association, a consortium of the county’s 59 cities and villages opposes the bill, as does the Northeast Ohio Mayors and Managers Association, which held a vote to do so this week.

Pepper Pike Mayor Richard Bain, who leads the Cuyahoga County Mayors and Managers Association, in an interview called the legislation “a direct attack on home rule.”

“This is a commercial enterprise. This is not a resident inviting people over to their home for a wedding reception after their kid gets married. This is a commercial business,” Bain said.

Beyond the philosophical issue of home rule, the most common complaint cities have over Airbnbs and similar short-term rentals are the loud parties they can attract.

Bain said during the recent NBA All Star weekend, someone rented a home in Pepper Pike and hosted parties with 300 people each night for several nights, leading to resident complaints.

And in Seven Hills, more than 250 people crowded a house on New Years Eve in 2018 after a man rented a room there. Police said the man advertised the party online, charging $5 to enter after paying $40 for the room.

The incident led Airbnb to ban the man from the platform, while Seven Hills banned short-term rentals – calling it a “moratorium” – since then as it’s worked on an ordinance regulating them.

Seven Hills Mayor Anthony Biasiotta said the City Council is set to approve the ordinance at its upcoming meeting on May 23, when it will allow short-term rentals once again, requiring them to register with the city and pay a fee, among other rules.

“When a person purchases a home in a bedroom community, the expectation is not that they’re going to be buying a home next to a short-term rental that may have 100 people in it on a given weekend,” Biasiotta said. “The expectation is that your neighbors going to be conducting normal homeowner and suburban activities in that home.”

Another concern that could arise comes in more tourism-oriented cities.

Andy Herf, a lobbyist for the Ohio Association of Visitors and Convention Bureaus, said in other states, investors have bought groups of properties with the specific idea of using them as full-time rentals. This can leave areas of the city empty during the non-travel season. And in an extreme example in New York City, an investor bought an entire building for the same reason.

“You can’t have any regulation that says, we can have some, but you can’t let it take over your town,” Herf said. “And we think local government should be allowed to make those decisions.”

Many communities limit short-term rentals through zoning laws – including Geneva-on-the-Lake, a small resort community where Fowler Arthur lives and rents her home using the Airbnb platform.

The village’s administrator, Jeremy Shaffer, submitted a letter to the committee reviewing the legislation stating its opposition. In an interview, Shaffer said the village views Airbnbs as just another type of business, and regulates them that way, like requiring them to get a business license and undergo a safety inspection. They’re also only allowed in certain sectors of the village, he said.

He said it’s unclear how the proposed law change would affect the village’s regulations.

“I guess the uncertainty is why we’re against it. It doesn’t seem very clear cut to us ,” he said.

Fowler Arthur said she has no problems with her experience working with Geneva-on-the-Lake on her Airbnb, which received a license from the village, and said she’s gotten legal advice that says she doesn’t have a conflict of interest, since the legislation won’t directly benefit her.

“We’ve worked with the system a little bit, and any time you have a working knowledge of how it’s support to operate, it really helps diagnose problems that people are having,” she said.