City issues moratorium on short-term rentals

 ‘Pause’ to allow review of regulations designed to protect neighbors,

housing stock, and residential character of neighborhoods

COVINGTON, Ky. – Saying the situation has “gotten out of control,” the Covington Board of Commissioners approved two ordinances on Tuesday night that establish a six-month moratorium on the licensing of short-term rental properties in the city.

The votes were passed on an emergency basis, meaning the ordinances take effect immediately and don’t require a second vote.

The moratorium will give the City time to study and rewrite regulations designed to protect neighbors and neighborhoods from the negative impacts of the uses, commonly known as Airbnbs or “vacation rentals,” as well as figure out ways to bring operators into compliance.

The concerns are many and multi-dimensional and are exacerbated by a crushing increase in the volume of such uses, City officials said:

COMPLIANCE: Covington joined cities across the country in 2020 in regulating short-term rentals by requiring a rental license and zoning approval. Two years later, only 37 rental operators are operating legally in the City, with three more licenses awaiting the last step of an inspection. However, new “web crawl” software that came online this week shows that at least 277 different properties are being advertised for short-term rental within the City, and that number continues to grow as more advertisements are found.

HOUSING: The surge in short-term rentals has reduced the availability of affordable housing in some parts of Covington.

‘CHARACTER’: Left unchecked, the surge and concentration of short-term rentals is threatening to change the “nature” or residential character of those areas, effectively turning “residential neighborhoods into commercial lodging areas and other transient uses,” one of the ordinances reads.

COMPLAINTS: The influx of one-night and weekend “tenants” – some in large groups driving multiple cars – has led to increased complaints about parking and traffic problems in residential neighborhoods, life and safety issues related to non-compliance with the building code, trash, and noise at all hours.

The process

Covington’s current Neighborhood Development Code (a la “zoning”) does not automatically allow short-term rentals as a “permitted use” in any zone of the city but requires that they be individually approved as a “conditional use,” a process that by state law requires a public hearing before the City’s B.O.A.R.D., or Board of Architectural Review and Development.

That set-up was deliberate, Economic Development Director Tom West explained. By making it a “conditional use,” the City can be very deliberate in examining (and limiting, where appropriate) the number of short-term rentals in a particular block or area. The process also gives neighbors a chance to make their concerns known to decision-makers.

But that process is lengthy.

The number of short-term rentals has surged and continues to accelerate, threatening to overwhelm both staff and citizen members of the B.O.A.R.D. The moratorium will give the City a chance to take a hard look at the current approval process, City Solicitor David Davidson said.

Furthermore, the B.O.A.R.D. is looking for guidance from elected officials on what constitutes an unacceptable concentration of uses in a particular area.

“There’s been a significant increase in short-term rentals, and it’s really affecting the availability of affordable housing,” Davidson said. “We’re trying to figure out how many.”

The collective result has been a fundamental change in the character of some parts of the City, with most of the current licenses concentrated in and around MainStrasse Village and the Mutter-Gottes neighborhood, City officials said.

“As a result, there are many two- to four-family buildings that sit empty except on weekends,” City Solicitor David Davidson told the Commission. “It’s a bigger problem here (in Covington) than elsewhere in Northern Kentucky because of the entertainment options and (proximity to Cincinnati).”

City officials will spend the time reviewing the existing regulations with an eye toward changes and increased compliance. (Note that a handful of short-term rental applications nearing the final step of approval will essentially be “grandfathered in,” meaning the City will continue processing those.)

Nationwide challenge

Covington is not alone in taking up this issue.

Planning and Development Services of Kenton County has taken on a study of short-term rentals throughout the county and will make recommendations on regulations for such uses within the coming months. The issue is also on the radar of many other local governments. For example, the City of Union is looking at adopting regulations similar to those adopted in Florence and Boone County to prevent an over-saturation of “vacation rentals.”

Public input

To signal and formalize its intention to invite the public to participate in Covington’s discussion, the Board of Commissioners on Tuesday at Commissioner Ron Washington’s suggestion adopted an order requiring a public hearing and/or other public input opportunities in the months ahead.

“We want to make sure the public gets a chance to weigh in – both people who own these units and those who live near them and have concerns,” Washington said.  

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