Proposed ordinance would put limits on some rentals through sites like Airbnb

A law proposed by Cincinnati City Councilman David Mann would set new stipulations for non-owner occupied short-term rentals

Mar 13, 2018 at 1:44 pm

Cincinnati City Councilman David Mann will introduce an ordinance seeking to mitigate what he says are negative effects of sites like Airbnb, VRBO and others on rental tenants and the city’s available rental housing stock.

Airbnb, and other sites like it, allow property owners to rent rooms or whole buildings for short-term stays, similar to a hotel. The companies don't own any real estate but simply broker the transaction between the owner and guest via an app or website in exchange for a small fee.

That can sometimes incentivize property owners, or investors who snatch up rental properties, to convert traditional houses or apartment buildings into full-time Airbnb sites, which in turn can displace residents and eat into a city's housing stock. Cities like Seattle, San Francisco, Philadelphia and New York have passed or attempted to pass restrictions on short-term rentals so they don't exacerbate housing shortages there.

click to enlarge Cincinnati City Councilman David Mann - Photo: Provided
Photo: Provided
Cincinnati City Councilman David Mann

Mann's proposed ordinance would require landlords seeking to rent entire buildings on sites like Airbnb for less than 30 days to get a city license, subject to city inspections and yearly renewal, and to rent those buildings for less than 90 days out of a calendar year.

Airbnb operators who rent whole buildings would also need to carry liability insurance and would have to pay income taxes on their rental profits, including the city’s transient occupancy tax, or hotel tax.

“I am very concerned about rental housing being emptied out and converted totally to transient Airbnb visitors,” Mann says of the proposal. “This will only aggravate our affordable housing crisis.”

Mann acknowledges the "very real positive economic and tourism benefits" of sites like Airbnb and notes that owner-occupied housing isn’t included in the law, so if you’re just renting out the extra bedroom in your house you won’t need to change anything.

Hamilton County currently needs about 40,000 more units of housing that is affordable to its lowest-income residents. Average rent in Cincinnati is roughly $900 a month, meaning landlords only need to rent out their properties on Airbnb at the city’s average rate of $100 a day for nine days to make the same return. The ordinance cites incidents in which Cincinnati landlords have evicted tenants to convert buildings into full-time Airbnb rentals.

Cincinnati has about 640 active Airbnb rentals with an average rent of roughly $100 a day, according to AIRDNA, which tracks rentals on the site by city. About 60 percent of those are rentals occupying a whole house, apartment or condo. The city has seen a 41 percent annual growth rate in those rentals in recent years.

In the 45202 area code, which covers downtown, Over-the-Rhine, and Mount Adams, there are more than 140 active rentals averaging a rate of $124 a day. Eighty one percent of those rentals are an entire building. 

There are another roughly 30 Airbnb sites in area code 45206, which encompasses rapidly redeveloping Walnut Hills, and nearly 60 percent of them are entire-building rentals that would be subject to Mann’s ordinance. Those units average about $162 a day.

That data doesn't include rentals on other, similar sites.

Under the ordinance, operating a non-owner occupied Airbnb property without a license, or violating the terms of that license, would constitute a fineable civil offense.