Frustration over legislative maneuvering in Frankfort on the regulation of short-term rentals, often referred to as Airbnbs after one of the websites where such properties are advertised, came out at a meeting of the Kenton County Mayors Group this week.
“It just exemplifies everything that’s broken,” Independence Mayor Chris Reinersman told LINK nky after the mayors met Saturday morning.
Specifically, Reinersman and several of the other mayors were concerned about a set of regulatory proposals that sought to limit municipal control over short-term rental properties. The proposals—which called for prohibitions against local conditional use permits or density-based restrictions on short-term rentals—appeared initially in Kentucky Senate Bill 110. Short-term rental lobbyists have been advocating for such regulations since late last year.
The bill, Reinersman said, proved to be unpopular, but the proposed prohibitions later got attached to a House bill that failed to leave committee. Reinersman said he’d been frantically trying to coordinate with the region’s legislators as it moved through committee, advocating against its passage.
“So, we thought it was dead; everything’s all good,” Reinersman told the attendees at the meeting. “And then we got – I think it was yesterday, day before yesterday – we got word that, oh no, that was attached to Senate Bill 61.”
SB 61 is largely aimed at regulating private swimming pools, but Kentucky House Speaker David Osborne, a Republican from Prospect in Jefferson and Oldham Counties, amended the bill late Wednesday last week to add the regulations limiting local control over short-term rentals. The bill cleared the House on Friday and is awaiting a vote in the Senate.
Over the years, short-term rentals have been criticized due to their effect on local economies and housing. The fear is that unregulated short-term rental properties, especially in tourism-heavy cities along the river, can create de facto hotel districts in areas originally designed as permanent residential neighborhoods.
Moreover, a large number of short-term rentals can have effects on property values and rent prices. According to a 2020 study from the National Bureau of Economic Research, the University of Southern California and California State University, which used Airbnb listing data from around the country, “a 1% increase in Airbnb listings leads to a 0.018% increase in rents and a 0.026% increase in house prices.
Considering the median annual Airbnb growth in each zip code, these results translate to an annual increase of $9 in monthly rent and $1,800 in house prices for the median zip code in our data, which accounts for about one fifth of actual rent growth and about one seventh of actual price growth.”
Reinersman said that he had used Airbnbs before but wasn’t optimistic about their effects on local economies.
“I was in an Airbnb in Madison, Indiana, a few weeks ago and got into a conversation with a woman who had just bought a house there to retire there and said he had been looking for a house for a year and a half…,” Reinersman said. “It just killed affordability.”
Airbnb has also been subject to a lawsuit by the Kentucky League of Cities and the Kentucky Travel Industry Association, alleging the company had failed to remit its mandated share of hotel and motel taxes. The lawsuit is ongoing.
Several cities in the region, including Covington, have passed legislation mandating business licensing and caps on the number of short-term rental properties in their cities.
Last week, Covington Mayor Ron Washington spoke out against the legislative proposals. Although the city has not passed an official resolution against the bills, the mayor told attendees at the commission meeting on March 11 that he didn’t “believe that Frankfort should be necessarily be trying to set policy on this issues for the city of Covington. I think it’s best for local control.”
Crestview Hill Mayor Paul Meier said that maybe the lawsuit against Airbnb would blunt some of the motivation for SB 61’s passage.
“If you haven’t mentioned that to your senators, that may be something to help us out in the next two weeks,” Meier told the other officials at the meeting.
“I’m sure they’re looking forward to another text from me,” Reinersman joked.