Landlords of unlicensed short-term rentals in Covington may soon see a change in penalties.
The Covington City Commission completed a first reading of an amendment to a proposed penalty to short-term rental landlords during its legislative meeting on Tuesday.
The penalty would apply to the owners of short-term rental properties who have failed to obtain proper licensing from the city and is the latest in a series of escalating penalties that date back to when Covington first began regulating short-term rentals in 2021.
Short-term rentals are private housing properties whose owners lease out rooms for short stays — often only a few days. Popular online platforms for facilitating such rentals include websites like Airbnb and Vrbo.
City law prohibits local landlords from posting advertisements online for short-term stays without obtaining proper licenses from the city. The most recent proposed penalty would have barred delinquent landlords from applying for short-term rental licenses for a year, beginning immediately after the city informed the owners of the violation.
The commission had initially planned on voting on the penalty during the legislative meeting on Feb. 28, but passed on voting at the advice of city solicitor David Davidson.
The amendment would bring violators before the city’s Code Enforcement Board to defend themselves before finalizing the prevention of new license applications. Davidson characterized the amendment as a way of guaranteeing proper due process of law.
“Here’s an opportunity to be heard,” he said at the Covington Commission caucus session on March 7. Davidson was not present at Tuesday’s meeting.
Covington is a popular and affordable destination for people traveling to the region due to its proximity to Cincinnati. Visitors will frequently seek out rooms in Covington to easily cross the river to attend sports matches, concerts, conventions and other big events.
Covington and other cities in the region recently began to seriously consider regulations for short-term rentals when they realized how popular they were: A quick search of the river district shows more than three dozen short-term rental properties dotting the map, competing for guests with Cincinnati stays.
Although short-term rentals are often an effective way for a city and its residents to bolster their incomes, they can sometimes have unintended, adverse effects on housing costs, housing availability, zoning and safety. As a result, municipalities in the region have applied varying degrees of regulation to control the expansion of such rentals.
To operate a short-term rental in Covington, property owners must first obtain a conditional zoning permit from the city’s Board of Architectural Review and Development, then apply for an annually renewable short-term rental license and a business license. Finally, city officials must inspect the property to ensure there are no fire, structural or other safety hazards.
If a landlord fails to follow this process, the city can fine them, audit their taxes and even issue liens and foreclosures on the property in the most extreme cases.
At an emergency meeting in December, the commission declared a freeze on all new licenses to assess if new regulations and enforcement measures were necessary in the face of the seemingly unabated increase of short-term rentals.
This application moratorium is still in effect and will conclude at the end of June.
Property owners who had already obtained proper licensing can still operate their properties legally, but they cannot apply for new licenses for new properties until the freeze is lifted.
Several short-term rental owners attended the meeting on Feb. 28 to speak on the issue. Many expressed a desire to collaborate with the city commissioners to find an amenable solution to the deadlock.
Several members of the same group attended Tuesday’s meeting to share more details about their travails with the license freeze and reaffirm their desire to find a mutually beneficial solution.
One such owner, Kate Kruse, spoke about how the moratorium has prevented her from building out her business, even though she was following the process to become licensed when the freeze began.
“I was in the midst of applying for the short term rental license having just finished construction when the moratorium went into place,” Kruse said. “I had played by the rules.”
She said that short-term rental investments, investments she claimed to have made on her own, were not like a light bulb that could be turned off and on at will.
“You can’t just turn it off and then survive for six months,” she said. She went on to say that she was going “to lose my business, because I can’t bankroll six months of time where I’m just shut down in the dark, and I have no income coming in.”
Alden Ashby was another representative from the short-rental owner community who spoke at the meeting. He recapitulated many of the concerns expressed by Kruse but also spoke about his hope of working together with the city.
“I would just hope that you guys would give us the time to work with you, make sure we can comply, make sure that the bad operators are being held accountable,” Ashby said, addressing the city commission.
Ashby concluded by saying he hoped the commission recognized that many in the short-term rental community wanted to play by the rules, hoping that the commission did “want to work with us, and you do want to see us as small businesses be successful in Covington.”
At least one city commissioner, Ron Washington, confirmed that he would be meeting with some of the short-term landlords in the coming weeks to examine rental properties in the area and discuss long-term solutions.
Mayor Joe Meyer also reaffirmed the city’s plan to hold public hearings in the future for members of the public and the city commission to more thoroughly hash out the best ways to regulate short-term rentals. Dates for the public hearings have not yet been scheduled.
The commission will do a second reading of the amended ordinance and vote on the measure at the legislative session on March 28, which begins at 6 p.m. at Covington City Hall on Pike Street.