Covington preparing to fine, penalize unlicensed short-term rental units within city limits

Kenton Hornbeck
Kenton Hornbeck
Kenton is a reporter for LINK nky. Email him at [email protected]

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The Covington City Commission has been critical of unlicensed short-term rentals in the past. Now, they are preparing to consider legislation against them at next Tuesday’s commission meeting.

Covington is proposing to levy fines and penalties against the operators of unlicensed short-term rentals, which include a daily fine of $500 to $1,000, a one-year ban on applying for a license and a tax audit. Covington’s Code Enforcement Department sent approximately 250 owners in the city a warning letter.

“We’ve tried to bring operators into compliance and have allowed ample time for them to apply for a license, but unfortunately many of them apparently have chosen to disregard the law,” Covington Neighborhood Services Director Brandon Holmes said. “So now they’re going to face the consequences for their decisions. The city must act to protect its residents, the availability of housing for rent and purchase, and the very residential character of its neighborhoods.”

Two of the most popular short-term rental companies, AirBnb and VRBO, require that operators follow the laws and processes of their local jurisdictions. Covington requires short-term rental operators to acquire a mandatory rental dwelling license, zoning approval and pay an occupational license fee.

Other cities in Northern Kentucky, such as Florence and Union, have also adopted short-term rental regulations. Covington passed regulations about short-term rentals in early 2021, which were aimed at creating rules that protect short-term renters and the properties that surround the units.

“Communities across the country are wrestling with this trend, and there is little doubt that residents in Covington are feeling the squeeze,” Covington City Manager Ken Smith said. “We’re going to take the time to address this strategically.”

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Since the requirements were passed, 43 short-term rental licenses have been issued. However, 424 units were advertised for rental using online short-term rental apps, a sharp contrast to the number of licenses issued.

In December, Covington approved two ordinances that established a six-month moratorium on the licensing of short-term rental properties in the city. The ordinances were passed under an emergency, meaning they went into effect immediately. Complaints from unhappy residents were the motivation behind the two ordinances.

The six-month period was given to allow the city to review regulations, the application process for zoning approval and the tools for bringing violators into compliance.

Covington city leaders say short-term rentals wouldn’t be as big of a problem if they were managed correctly. The city has run into a number of problems due to unregulated short-term rentals popping up.

According to a press release from the city, one of the most pressing issues is how they effect the city’s housing stock. An influx of short-term rentals can affect the number of affordable housing units available for rent within the city. This shortage can drive up rental prices for long-term renters up, effectively squeezing out a number of prospective renters.

Another issue the city has voiced concern over is how unlicensed short-term rentals can turn neighborhoods into commercial lodging areas, creating friction between permanent residents and the short-term visitors. The city says they have received increased complaints in regard to noise, trash, parking capacity and traffic.

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