Two Cleveland councilmen are taking another run at reining in short-term home rentals, a growing segment of the lodging economy that has been a boon to pandemic-weary travelers but a bane in some city neighborhoods.
Under legislation introduced at Cleveland City Council this month, the city would require hosts to pay for an annual license. Unlicensed hosts would be subject to fines. And operators who otherwise run afoul of city laws could have their licenses revoked and face possible criminal charges.
The proposal also would require full-time hosts in largely residential areas to appear before the Cleveland Board of Zoning Appeals to have their rentals reclassified as "lodging houses."
That prospect, that vocal neighbors at a public hearing might prevent a host from accepting transient tenants, worries investors like Billy Fronimo. His Lakewood-based business, the House Hotels, owns and manages roughly 30 such rentals, including a dozen units in Cleveland.
"I feel like there's a target on these short-term rentals because it's more in the news," he said, alluding to headlines about raucous parties at properties listed on Airbnb, a popular booking platform. "But I feel like, per capita, they don't cause any more problems than the regular rentals do."
Cleveland has been grappling with how to treat properties like Fronimo's since 2016, when the Republican National Convention boosted demand for lodging of all sorts. The city isn't alone in its struggles. Municipalities across the globe have imposed restrictions on the industry, and lawmakers have negotiated with San Francisco-based Airbnb and Vrbo, a competitor, to collect and pass along local lodging taxes from guests.
Four years ago, Cleveland council members approved a basic regulatory framework for short-term rentals, which the city defines as properties where the contract between host and guest lasts fewer than 31 days. But some council members have complained for years that the city's laws have no teeth when it comes to weeding out irresponsible hosts and problematic addresses.
When the novel coronavirus began spreading across Ohio nearly a year ago, prompting stay-home orders and statewide business shutdowns, hosts saw a surge in parties. Neighbors, fed up with the crowds, loud music and piles of trash, called the police.
"We had tons of residents in the community who were saying, 'What the hell are you doing about these out-of-control Airbnbs?' We didn't have a good mechanism for dealing with them," said Councilman Kerry McCormack, who fielded complaints from homeowners in Ohio City in particular.
He and Councilman Tony Brancatelli, whose ward includes Slavic Village, first proposed mandatory licensing and penalties in June. But their initial draft — a starting point for discussions — never got a public airing. Since then, they've conferred with city lawyers and talked to representatives from Airbnb.
Airbnb, which went public in December, didn't make anyone available for an interview. The company, which reported 1,600 active listings in Cleveland at the beginning of 2020, would not say how many local hosts it has today.
"We are reviewing the proposed ordinance and look forward to working with the city to ensure short-term rentals can be an important part of Cleveland's post-pandemic recovery," an Airbnb spokesman wrote in an email. "Countless families depend on Airbnb to pay their rent and stay in their homes, which has become even more important amidst the current crisis."
A spokeswoman for Expedia Group Inc., the online travel company that owns Vrbo, did not respond to an inquiry. Hosts like Lauren Cromwell, who puts up travelers in a four-unit house she calls the Grey Barn in the Detroit-Shoreway neighborhood, accept bookings on both platforms.
"I'm on year three for the first one, year two for the second one and just started the third one," said Cromwell, a real estate agent, of her short-term rentals. Her guests range from pet owners looking for dog-friendly digs to out-of-state patients in town for appointments at the Cleveland Clinic.
"If all this burns out, and it seems like they're going to legislate the crap out of it and make it hard to run, then so be it," she said, adding that if she's pushed out of the business, she'll simply convert the units into longer-term rentals.
Brancatelli worries about companies buying up houses as short-term lodging. But he said the city isn't trying to run investors or travelers out of town.
"This is not so draconian that we're going to eliminate Airbnbs in the city of Cleveland," he said, stressing that he and McCormack are planning additional talks with Airbnb and will welcome input from local hosts at public hearings that could kick off in early March.
Some aspects of the legislation still need fine-tuning, he acknowledged.
Under current law, homeowners or renters in Cleveland who occasionally take bookings at their primary residences don't have to do anything, as long as they aren't renting out their homes for more than 90 days a year.
Real estate investors and more active hosts must list their properties on the city's rental registry each year and pay a fee. Compliance with that registry is low, both among short-term rental operators and traditional landlords.
Full-time Airbnb listings fall into murky territory. Technically, McCormack and Brancatelli point out, such rentals in residential districts are tantamount to hotels, requiring potential rezoning for a commercial use. But the city hasn't chased down landlords or forced them offline.
The new legislation sets firmer boundaries.
If it passes, every host will have to obtain a license and pay a fee. Part-time hosts will pay $50 a year. They'll have to provide the city with an Ohio driver's license or state ID card and documents proving they own the property or, in the case of an apartment, have the owner's permission to rent it out.
Investor-owned properties would be reclassified as lodging houses, a new category in the city's zoning code. Hosts would be required to pay heftier fees, from $150 to $550 based on the number of bedrooms in a building.
Properties would be subject to city inspections. And neighbors would have the opportunity to weigh in during zoning board hearings. It's unclear whether existing short-term rentals would be grandfathered under the law, exempt from some of the new rules.
McCormack said he and Brancatelli don't want to burden homeowners renting out space to pay the bills.
"But if you're buying a home or townhome … to rent out full-time for limited lodging, there's a safety consideration there," he said. "The other thing is, what is your responsibility to the neighborhood around you?"
In North Collinwood, on the city's East Side, Neris Klimas hosted her first guests one year ago. She wasn't planning to run a full-time Airbnb when she bought the house next door to her own. But circumstances changed. Klimas, a real estate agent, turned to Airbnb to supplement her income and generate cash to spruce up the two-bedroom cottage near Lake Erie.
"While there are hosts that are running a very shrewd business through Airbnb, I'm not one of them," she said.
Most of her guests aren't tourists. They're road-trip travelers passing through or families of patients at local hospitals. Curious about city neighborhoods, though, they're not keen on staying at traditional hotels.
A $150 licensing fee wouldn't discourage her from hosting, Klimas said, but she's leery of the process of navigating zoning approvals.
"All of my neighbors are great and super cool and very enthusiastic to meet whatever guests I have, and be friendly and nice," she said. "But I don't know if that's the common reaction to having an Airbnb next door."
Cromwell and Fronimo both said that parties have been a challenge for hosts.
Airbnb barred large gatherings even before the pandemic and suspended or banned more than two dozen listings in Cleveland late last year in response to complaints.
Cromwell now declines booking requests from local guests who are new to Airbnb. She lives in the Battery Park development, not far from her rental, and keeps a close eye on the property, where one long-term tenant also lives. But she has still encountered problems, including reservations carrying the wrong phone number and one party that prompted her to call the police.
"The benefits far outweigh the nuisance factor," she said.
Fronimo, who got into the business almost 10 years ago, saw questionable booking requests for his Ohio City rentals spike during last spring's lockdown. The partying fell off during the summer and resurged in November, when Gov. Mike DeWine instituted a curfew that closed restaurants and bars at 10 p.m. The culprits tended to be guests in their early 20s.
Now Fronimo is installing cameras on the porches and in the backyards at his units. He's invested in technology to monitor how many cell phones are in a house and purchased gadgets that will notify him if guests are being too loud. His office manager is vetting suspicious booking inquiries by phone.
After reading the new legislation, Fronimo bemoaned it as punitive and not proactive. He said he isn't opposed to regulation. But he's skeptical about the current proposal and its emphasis on fees, penalties and public meetings.
"I put a lot of money into my properties," he said. "I furnish them. I have a cleaning staff. I do it full-time. Unintended guests come in, and things happen. So where do you draw the line when you call somebody a bad apple?"
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