“If you’re here thinking that this is a debate about whether we should regulate short-term rentals, you’re in the wrong place,” said Covington City Solicitor David Davidson at a public hearing at The Carnegie on Wednesday night.
“We already regulated short-term rentals, and the question is, how are we going to change what we’re doing now?” Davidson added.
A short-term rental is a piece of privately-owned property rented out to tenants for short stays. They’re often called Airbnbs, after the web service where landlords can advertise their properties, although there are now multiple websites for booking short-term rentals.
This was Covington’s first public hearing on the matter, although this is not the first time members of the public have attended city meetings in large numbers to voice their opinions on regulation.
Both people in favor of looser regulations and people in favor of stricter regulations attended Wednesday’s hearing. Speakers included short-term property owners and a variety of other community residents.
“I think I can speak for the entire commission when I say we do not plan to ban short-term rentals in Covington,” said Mayor Joe Meyer. “But we do want, and what our goal is, is a regulatory scheme that protects the quality of life in our neighborhoods while allowing the continued use of STRs [short-term rentals] at some level, and it will be a balancing act.”
The hearing followed the passage of an ordinance in March, which escalated penalties for short-term landlords who have failed to meet municipal licensing requirements. Current penalties for delinquent landlords include fines of up to $1,000 per day of operating without proper licensing, tax audits, prohibitions against applying for rental licenses, and liens and foreclosures.
Covington began regulating short-term rentals in 2021 when city staff noticed their increased proliferation. It seemed Covington offered a cheap place to stay for big events across the river in Cincinnati, like football games and conventions.
Covington isn’t alone in considering the issue; several other cities in the region have deployed varying degrees of regulation on short-term rentals. Although short-term rentals can be an economic boon for property owners and even municipalities, there are questions about how they affect city zoning practices, housing cost and access, and neighborhood safety.
To legally advertise and operate a short-term rental in Covington, landlords must obtain a conditional zoning permit from the local architectural board, then obtain a $50 business license and an annual short-term rental license from the city, which range in price from $30 to $150, depending on the size of the property. Lastly, they must submit to a building inspection to check for safety hazards.
“Only 43 short-term rental licenses have been sought and issued,” as of February, according to a press release from the city. A quick search on the Airbnb website for stays over the coming weekend displays about 230 advertised rooms operating in the city.
The city declared a moratorium on new licenses in December. 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 in June.
Numerous property owners spoke at meeting, sharing their frustrations with the application moratorium and the city’s measures against short-term rentals generally, many saying that their businesses have been derailed due to the moratorium.
Noah Brauer, who owns several rental properties in town, expressed what many property owners were feeling.
“I’m here to start earning money in the city of Covington doing this, and I’m eager to continue to invest in the city of Covington,” Brauer said. “I mean, I have invested a considerable amount of money in these buildings, and I feel like what I’ve done has been good for the community.”
Joe Boone, who lives in Ludlow but has been operating short-term rentals since 2018, said that his business took a huge hit when the city regulations, including the moratorium, were put in place.
“I did cancel over $18,000 worth of Airbnb bookings,” Boone said. “So it is a big impact.”
Several other property owners said that communications surrounding the licensing requirements had been poor, and many felt blindsided by the moratorium.
Chachi and Charlene Echeriel, a married couple who own properties in the Austinburg neighborhood, not only believed that city had failed to properly communicate but felt the application process for licensure was onerous.
“We have not seen any official changes for short term rentals until we’ve received the letter [of non-compliance] around January 2023,” Chachi Echeriel said.
“It didn’t actually give us any information on what to do next,” Charlene said.
She then described the process for applying for a short-term license online.
“I started filling out the form. I got halfway down, and you had to have an occupational license number before you could proceed. So then I went to get the occupational license, and I found out that you have to have a letter of good standing before you could finish that form,” Charlene said.
She added that nowhere in the application forms did it say that a moratorium was in place, meaning that people applying for licenses may not even know their applications would eventually be ignored.
Others said the city’s actions were needlessly cutting off investment into poorer areas that had fallen into neglect.
“What I’ve seen inside of Covington is that we have had an immense amount of properties that have been blighted and have been cited by Covington for decades that I live literally right next door to,” said Douglas Thorton, who’s lived with his wife in Covington since 1994, and who has rented out a portion of his home on both a long-term and a short-term basis.
“What had changed that directly was the idea of short term rental that allowed that property to now shine again. It allowed Covington to shine again,” Thorton added.
People who were in favor of more regulation spoke, too.
Daniel Burr, who said that he’d lived in Covington for 31 years, expressed worries about the density of rentals within certain neighborhoods, a concern that many shared.
“If every property owner who has applied to operate or expressed an interest in operating a short-term rental in this area were granted a license, that number would increase to 10, almost a third of the residential properties on these two blocks. This is too many,” Burr said. “My neighborhood has been inundated with short-term rentals.”
He recommended limiting the number of licenses that could be issued for residential areas.
He also recommended establishing a public database to keep track of legally-operating rentals.
“If residents have reason to believe a property in their neighborhood is operating as a short-term rental, they can check this database. And if the property has no license, they can request an investigation from the appropriate office at city hall,” Burr said.
Several other speakers also made a case for a public database like this.
Another resident, Neil Blunt, insisted that only local people and companies should be allowed to invest and operate in the city. He feared that out-of-town, absentee landlords could move in and disrupt the community.
“One thing that bothers me is that those who are going to do SRTs are within the city of Covington, are within this region,” Burr said. “I don’t want some New Yorker coming in here and buying up housing and enjoying it, and that’s being done.”
He also expressed worries about off-street parking, another common concern among residents in favor of regulation.
Others expressed concerns about neighborhood character and quality of life.
“One of my concerns is rather subjective,” Tom Cislo, another resident, said. “But I think the safety, in general, of neighborhoods relies heavily on neighbors sort of knowing each other’s comings and goings–who parks where, what cars look like, who walks their dog, etc.–and if a block or neighborhood starts getting full of short-term rentals… then pretty soon no one knows who’s who and what’s what.”
Lastly, some were concerned about how the proliferation of short-term rentals affected housing prices and availability.
“I’ve lived in Covington since 2010; I’ve been a renter since 2017,” said Missy Spears. “In the last six years, my rent started out at $675. It has since doubled. Now you get about half the amount of square footage for twice the amount of money. I am also a fan of Airbnbs. I stay in them, I love them, but they have just kind of overtaken our city. I am definitely in favor of a limitation on how many licenses we give out, particularly in certain neighborhoods.”
Hayley Powell, a representative from the Northern Kentucky Tenants Union, spoke about housing generally in the region.
“Short-term rentals in Covington that frequently do sit vacant during the week and in the off-season in closer proximity to each other would literally constitute a ghost town,” Powell said. “At the same time, we have a pandemic of housing-insecure people who would give anything to not be banished from the community they have helped to build. I think in a couple of decades or a few decades we will look back at this time as kind of the wild, wild west of the housing crisis and of housing rights. But we must start today by intensely regulating the local short-term rental industry.”
Several residents, including some of the property owners, stated that they would be in favor of affordable housing programs in conjunction with rental regulations. One property owner suggested reinvesting money collected from licensing fees into affordable housing programs. Other ideas pitched included voucher programs and tax abatement programs.
Comments concluded after nearly two hours of speaking.
The commission was silent throughout the proceedings, taking notes and keeping track of suggestions.
More public hearings related to the issue of short term rentals will occur in the coming weeks, although exact times, dates and locations have not yet been set.
Covington residents who wish to submit written comments to the city commission can fill out their online form or send an email to the city clerk at cityclerk@covingtonky.gov.