Covington Commission increases short-term rental penalties

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The Covington City Commission unanimously voted to increase penalties for short-term rental property owners who have failed to obtain licensing from the city.

The vote, which occurred during Tuesday’s legislative session, is the end of a months-long process of investigation, deliberation and revision of measures related to short-term rentals.

More commonly referred to as Airbnbs, after the web service where such properties are advertised, short-term rental properties are private residences that owners rent out for short stays, fewer than 30 days.

Covington is a popular destination for short-term rentals due to its proximity to the riverfront. Short-term renters will frequently find an inexpensive room in Covington so that they can then travel across the river for big events, like sports games, concerts and conventions.

The ordinance marks the latest in a series of escalating penalties for short-term rental landlords who have failed to obtain proper licensing from the city. It aims to prevent delinquent landlords from applying for short-term rental licenses for a year after being notified of their violation. Other penalties were already in place, including fines of up to $1,000 per day of operating without proper licensing, tax audits, and liens and foreclosures in extreme cases.

Covington began regulating short-term rentals in 2021. Property owners must first obtain a conditional zoning permit from the city’s Board of Architectural Review and Development if they wish to operate short-term rentals in the city. From there, they must obtain an annually renewable short-term rental license and a business license. Finally, city officials must inspect the property to ensure no fire, structural or other safety hazards.

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. According to a press release from the city, “only 43 short-term rental licenses have been sought and issued,” as of February, even though a quick internet search yields nearly 650 advertised rooms operating in the city.

Property owners who had already obtained proper licensing can still operate their properties legally but cannot apply for new licenses for new properties until the freeze is lifted. The moratorium ends in June.

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. Davidson believed that the original text of the ordinance lacked enough due process for violators and suggested the commission amend the ordinance to allow people to defend themselves before the city’s code enforcement board before being barred from applying for new licenses. This had the effect of pushing the vote back two legislative sessions.

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Short-term property owners attended the previous legislative sessions to appeal to the commission for a compromise, and many returned to Tuesday’s session to reaffirm their concerns. They shared their thoughts during the public comment section of the meeting, which took place before the commissioners cast their votes.

Many expressed the hope for a provisional license for landlords who had begun the process of licensing but failed to complete the process before the city instituted the moratorium.

Tara Bessler, who manages a short-term property owned by her parents, read from a statement that described her parents’ hardship and implored the commission to consider a provisional measure.

Tara Bessler at the March 28 legislative session. Photo by Nathan Granger | LINK nky

“My parents are retired, and this was their source of income,” Bessler said. “Our cleaner, she lives on the same street as the property, and she no longer has that income. I urge the city to reconsider the moratorium and provide a pathway to obtain a provisional license. It is my belief that such a license will allow property owners to utilize their assets in a productive way while still adhering to appropriate city regulation.”

Brandon Pilcher, who had not spoken at previous meetings, also read from a statement in which he claimed to speak not only for himself but for most rental owners who failed to obtain licenses and their employees. He claimed that communication efforts from the city had been poor.

“I stand with others in the 90% fail rate bucket that did not receive the reach-out effort,” Pilcher read from his statement. “If 400-plus,” he said, referring to a rough figure of unlicensed rentals given in previous meetings, “did not receive stated communication efforts, this is evidence to suggest that the communication was not adequate or successful.”

To illustrate his point, he described the living situation of a person named Amanda, whom he claimed was employed in servicing short-term rentals.

Brandon Pilcher speaks at the March 28 legislative session. Photo by Nathan Granger | LINK nky

“Amanda was earning $2,000 to $3,000 per month servicing several rental properties,” Pilcher said. “Her family was able to subsidize the rising cost of living and living in financial struggle with this opportunity. Now because of the moratorium period, her income has been reduced to $0. The property she was servicing has gone from earning income to burning income.”

Pilcher gave no other details about Amanda’s identity or life.

Greg Minges, who addressed the commission on behalf of his son, Joseph Minges, who owns property in town but could not attend the meeting, shared Pilcher’s concern about a lack of communication. He claimed his son had gone through the proper channels for his two-bedroom property but was denied a zoning permit, seemingly for no reason when he appeared before the Board of Architectural Review and Development.

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Greg Minges addresses the city commission at the legislative session on March 28. Photo by Nathan Granger | LINK nky

“I hear a lot about people not willing to go through the process,” Minges said at the beginning of his comments.

He went on to say that at his son’s hearing, “there was a motion to approve. He got a second, but the rest of the board turned him down with no reason given.”

Despite the statements from property owners, at least two community organizations have come out in favor of increased regulations for delinquent landlords.

“We became concerned that there could be a proliferation of short-term rentals, which could erode the fabric of the community and its unique character,” said Patrick Hughes, the president of the Historic Licking Riverside Civic Association, in a phone call with LINK nky last week.

“These [neighborhoods] are where people live,” Hughes added. “I don’t think it’s appropriate to have short-term rentals, which are the equivalent of a micro hotel, in your neighborhood.”

Hughes said that he’s not against short-term rental universally — he even disclosed that the law firm he works for represents a short-term rental owner — but he’s in favor of punitive measures like the license application suspension. He also favors barring short-term rentals from operating in primarily residential areas.

“For the first time since the ’70s, there’s young families moving back into our neighborhood with young children,” Hughes said. “You know, you’d like to have that sense of safety, and it’s fine when people come for their weddings or a picnic or the tour; that’s all great. When people are coming in and having parties, are using it as a base camp for sports events or concerts, it begins to take on the character of an entertainment district.”

To that end, he favors restricting short-term rentals to areas already zoned for entertainment.

Brandon Galeas, the president of Mutter Gottes, or Mother of God, Neighborhood Association, shares similar sentiments.

Galeas admits that short-term rentals are often profitable for cities and local landlords who reside in the area.

The problem is, he said in a phone call on Tuesday, that over saturation of short-term rentals in a neighborhood can fray the sense of community that comes from having long-term neighbors who share common interests.

“Honestly, [you] don’t really interact with your neighbors that are short-term renters,” Galeas said. “And so it kind of makes you feel like you’re on an island if you’re surrounded by short-term rental properties.”

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In addition, short-term rentals can affect census data taken every 10 years. Cities receive certain kinds of federal aid depending on their population, and an over-abundance of short-term can lead to a situation where an area’s population seems smaller than it actually is, he argued.

He also expressed worry about out-of-town investors buying up properties and then never tending to them.

“A lot of people are concerned that property is being picked up by investors and non-local individuals,” Galeas said. “If you don’t know who the person is, you don’t know how to file or report an issue with them. Like, if there’s there’s a maintenance issue or there’s a noise issue or something like that. There’s no way to get in touch with them.”

Yet, even Galeas admitted that the process could be better, especially when it came to obtaining conditional zoning from the architectural board.

After having attended a few meetings, Galeas claimed that “any meeting that there was an Airbnb on those ones, that meeting would go an extra hour or two hours over the normal time, as people came out and voiced their opinions on it.”

Galeas went on to say that for many trying to comply with city ordinance, “It’s not clear. And that’s a big issue for the people who operate the properties. Like, the rules aren’t clear. They have to get conditional approval, but they’re not told what kind of density the city allows or what the density currently is… Unless they ask somebody, they don’t know the process to get approved.”

After the vote, Davidson addressed the possibility for a provisional license, saying it wouldn’t currently be possible to issue provisional licenses without rewriting city ordinance. What’s more, provisional licensure would likely cause problems for zoning, he claimed, as anyone who wished to legally rent out space on a short-term basis had to first obtain conditional licensing. Provisional licensing could potentially side-step that safe guard if implemented poorly.

At the end of the public comment section, Mayor Joe Meyer announced that public hearings would take place within the next two weeks, where anyone from the community could come and engage with commissioners in public dialogue on the issue. He also encouraged attendees to sign up for the city’s email announcements.

An exact date, time and place for the public hearing was not determined at the meeting.

The next Covington Commission meeting will take place on Tuesday, April 4 at 6 p.m. at City Hall on Pike Street.

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