The Covington City Commission declined to vote on an ordinance to increase penalties for short-term rental landlords at Tuesday’s legislative session.
The ordinance was due for its second reading and a vote from commission members, but per the advice of City Solicitor David Davidson, the commission moved to amend the ordinance to comply with what Davidson described as a clerical error in the ordinance’s language.
The commission will discuss the amendment in more detail at the caucus meeting on March 7 and then vote on the amended ordinance on March 14.
This move came as a surprise to members of the public who attended the meeting, many of whom were short-term rental property owners who had come to offer their thoughts on the ordinance during the meeting’s public comment section.
Short-term rentals are residential properties whose owners rent out the property for short-term stays, usually to vacationers and out-of-towners looking for lodging during big events across the river, like sporting events, concerts and conventions. Owners often use popular online boards like Airbnb and Vrbo to advertise their properties. The Commission introduced the ordinance at a caucus meeting on Feb. 7 and completed the ordinance’s first reading at the legislative session on Feb. 14.
The ordinance would bar short-term landlords from applying for a short-term rental license for a year if they fail to properly obtain conditional zoning permits, occupational licenses and rental licenses from the city before renting out their property. Such licensing application suspension would begin one year after the city notifies a property owner that they’re in violation of the ordinance.
Anyone currently operating a short-term rental without proper licensing is in violation of city law.
The city froze new applications for short-term rental licenses in December when it saw a dearth of compliant landlords.
According to a Feb. 2 press release from the city, “only 43 short-term rental licenses have been sought and issued” since applications for licenses went online in 2021. This slim figure paled in comparison to the “over 400” rental units being advertised online, said Mayor Joe Meyer.
About 10 people signed up to speak about the proposed ordinance, all of whom were critical of the city’s actions over the past year.
Alden Ashby, who owns and operates several short-term rentals in Covington, expressed frustration over the timing of the application moratorium, which occurred over the holiday season when many people were busy.
“I feel like it was passed without really any awareness in the community,” Ashby said, “without any conversation with Airbnb owners, without any conversation about restaurant and bar owners.”
He went on to say that not only did it affect his business but also the livelihood of his workers. He concluded by asking the commission to consider tabling a vote on the ordinance.
As LINK reported earlier this month, short-term rentals can be a financial boon for property owners and cities. Yet, their increasing popularity has prompted the commission to confront issues related to safety, zoning and housing accessibility. Other municipalities in the region, including Newport, have passed varying degrees of legislation to regulate short-term rentals in the face of these issues.
At the commission’s caucus meeting on Feb. 7, for example, Commissioner Ron Washington spoke to the need to think critically about safety when it came to short-term rentals.
“It’s a safety issue because basically a short-term rental is a form of hotel,” Washington said. “It’s not like an apartment where people are familiar with the exits and the building.”
To legally operate a short-term rental in Covington, a landlord must first obtain a conditional zoning permit from the city’s Board of Architectural Review and Development. From there, the owner must obtain a $50 business license and an annually renewed short-term rental license, which range from $30 to $150, depending on size of the property. Finally, city officials must inspect the property to ensure it doesn’t contain any fire or other structural hazards.
Failure to adhere to this process can lead to penalties of up to $1,000 a day, as well tax audits, liens and–only in the most extreme cases–foreclosures.
Chris Hikel, a property manager who manages three short-term rentals in the city, discussed the economic benefits of short-term rentals. He made the case that short-term rentals provided a steady source of income for vulnerable populations, particularly the region’s growing Latino population as well as the elderly.
“I just don’t understand how you can talk about affordability while you’re shutting down their ability to earn a living,” he said. “It just blows my mind.”
He went on to say, “The property that I manage has 14 units and three of them are Airbnb, and those Airbnbs are being used to subsidize six elderly senior citizens who are paying $600 a month on average, some of them as low as $498. And with those Airbnbs gone, those subsidies are gone, and their rents probably have to go up $200 to $300 a month.”
“So far from creating or preserving affordable housing: It’s being destroyed,” he said.
In spite of his criticisms, he hoped that property owners and the city commission could work together to “come up with something that’s workable for everybody,” he said.
Many of the property owners were distressed at the fact that they can’t legally grow their businesses due to the application freeze, even if they’ve been compliant thus far.
Edward Feldman, managing partner at Neat Suites, a boutique hospitality company that manages about 35 short-term rentals in the region, said, “We can’t even apply right now. So we can’t grow our business, and we’re based out of Covington.”
Like Ashby, he makes a point of saying that the application moratorium doesn’t just affect the owners of the properties but everyone who relies on them.
“It’s hurt all the other businesses,” Feldman said, “all their stakeholders: cleaners, the maintenance, the Point Laundry.”
Mayor Joe Meyer addressed the attendees after everyone had been allowed to speak.
“We imposed the moratorium for two reasons,” Meyer said. “One is we were getting a large number of complaints from people in our various neighborhoods about the behavior of tenants in short-term rental facilities.”
The second reason was the lack of compliance, in spite of what he said were numerous attempts at outreach from the city government. He said the application freeze would allow time for the government to study the problem in depth and hold public hearings.
“We are going to have public hearings before we finalize our plans,” Meyer said. “We want to come up with a plan that is equitable and fair to the neighborhoods and to the residents of our community and to the investors.”
“We regret we had to do a moratorium,” Meyer added. “But everything else we tried failed.”
Attendees stayed after the session to discuss their issues and hopes with the commission members.
“I would just close by urging you to collaborate with us,” Hikel said in his concluding comments to the commission. “These are people who are problem solvers. These are people who want to work with you.”
The license application moratorium will end at the end of June. Public hearings related to the issue have not yet been scheduled.
The commission will discuss amendments to the ordinance at the commission caucus session on March 7 at 6 p.m. at the Covington City Hall on Pike Street.
A vote on the ordinance will take place at the legislative session on March 14 at 6 p.m. at City Hall.