Cleveland City Council Considering Laws to Regulate and Limit Short-Term Rentals

Licensing Commissioner Dedrick Stephens, Special Counsel Rachel Scalish and Chief Zoning Administrator Shannon Leonard pitched City Council new laws meant to weed out unruly Airbnbs and Vrbos, on Tuesday. Credit: Mark Oprea

The party at an Airbnb at 12404 Larchmere Boulevard got out of hand quickly.

It was July 6, 2024, and 200 people—mostly teenagers—were in attendance. Police were called. Guests were running into neighbors’ backyards. Businesses closed. A restarant close by had to tell its patio diners to move indoors.

What may be the worst case scenario for a short-term rental was on the minds of every councilmember present at the Development, Planning & Sustainability Committee on Tuesday, when City Council weighed new laws meant to prevent Airbnbs and Vrbos from turning into nuisances for the entire block.

Nearly a year after Council began entertaining ways to weed out unruly short-term rental properties, the new law package relies heavily on ensuring all of them, whether they’re one-bedroom Airbnbs downtown or full-house Vrbos in West Park, are fully licensed by the city.

And with that license comes a whole bunch of new rules. Short-term rentals hosts or homeowners must send the city a plan outlining guest count, bedroom layout, designated parking, proof of tax payments, a certificate of occupancy and proof of liability insurance no less than $300,000. (And pay a $150 fee to go along with it.)

If you’re licensed? All listings must display a new license number. You can’t host more than two guests per bedroom for more than a month. And every listing must function effectively like an apartment—with smoke and carbon monoxide alarms, fire extinguishers and trash and recycling bins.

And no more parties that irk the neighbors.

“Excessive or unnecessary noise,” the ordinance shown Tuesday reads, “is prohibited at all times.”

The last time Cleveland scrutinized its laws for short-term rentals was shortly before the 2016 Republican National Convention, when tens of thousands of tourists paid to stay in short-term rentals across the city.

The goal, then, recalled Ward 3 Councilman Kerry McCormack, was to put regulations on the books that tried to weed out abusers of the properties they were staying at for a few days. The result was vague legal language trying to ensure, it reads, “limited lodging will not be a detriment to the character and livability of the surrounding residential neighborhood.”

Ward 3 Councilman Kerry McCormack, who sponsored the legislation, brought up two horror stories—Airbnb parties run amok—in the past for why the new laws were dire. Credit: Mark Oprea

“What we have found is that it is completely unforceable,” McCormack, who co-sponsored the legislation with Councilwoman Jenny Spencer, said on Tuesday. “The mechanics of the ordinance. The legal components of the ordinance. It has become extremely difficult to enforce the law pertaining to short-term rentals.”

Rachel Scalish, City Council’s special legal counsel, told the committee that the legal language she and others worked on for the past year was necessary.

“Right now, we have short-term rentals kind of everywhere, but there’s nothing regulating them,” Scalish said. “There’s no licensing process at all. We really would like to regulate them—and know where they are.”

There are anywhere from 900 to 1,500 short-term rentals hosting guests at any given time in Cleveland, from West Park to Shaker Square. Your average Airbnb costs $123 a night, according to BNBCalc, a short-term rental metrics service.

And that average dangles profits for hosts and property owners way above what they would make listing the same two-bedroom as a monthly rental. (About $3,800 in revenue per month on average.) Even with the city’s three percent hotel tax.

Such huge economic incentive, coupled with the relative ease of attracting guests via an app, has changed Cleveland’s neighborhoods for the worse, Spencer said. Apartments orginally meant for families with jobs in the city are otherwise advertised for out-of-town tourists with no actual care for the block they’re staying on.

“I’m not into that,” Spencer said. “I want more neighbors. I want tight-knit communities. I want neighbors who support and build community together.”

If the legislation is made into law, no Cleveland block can be more than 15 percent short-term rentals. Hosts can apply for a variance with the Board of Zoning Appeals, but those cases are bound to take months and be rarely okayed.

City Council as a whole has yet to set a date for its possible passing.