A bill before the Ohio Statehouse limiting local governments from regulating short-term rentals like Airbnbs and Vrbos will advance after passing a preliminary committee vote (9:4) on May 11, 2022. House Bill 563 limits local governments from regulating short-term rental properties.^[1] Not only does the bill prohibit municipal corporations, villages, and townships from outright banning short-term rentals, but it also restricts local governments from limiting the number, frequency, and duration of rentals.^[2] Prior to House Bill 563, state law left the regulation of short-term rentals to local governments.^[3]

The bill is supported by individuals seeking reduced governmental control on the use of privately owned properties for short-term rentals. Many homeowners find they should have the right to profit off of their homes, which are often their most valuable investment. Further, the bill’s advocates believe that House Bill 563 addresses the “growing importance of short-term rentals to Ohio’s economy” for “travel and transient needs of residents”.^[4] Other supporters find short term rentals encourage investment into properties that otherwise would be left in disrepair.

Proponents of the bill ensure short-term rentals will be subject to the same public safety and nuisance regulations as long-term rentals.^[5] Thus, supporters insist the bill only prohibits total bans of short-term rentals but does not prohibit their regulation. State Representative Sarah Fowler Arthur, the author of the bill, also assures the bill is not intended to overturn any existing local regulations.^[6]

House Bill 563, however, does raise concerns for local governments. The ambiguity of the bill renders its implications unclear. While proponents of the bill argue the bill’s primary purpose is to prevent local governments from banning short-term rentals, the bill’s vague language could have significant impacts on communities’ ability to regulate rentals whether short-term or long-term.

Namely, House Bill 563 includes hazy language providing that local governments will be prohibited from “adopting or enforcing” related regulations and restrictions. Thus, while the language of the bill is unclear, one could argue that at the very least, the bill will prohibit the enforcement of new restrictions that are contrary to existing restrictions.^[7] Since House Bill 563 does not explicitly address whether it applies retroactively or whether existing laws will be upheld, its future application is subject to mere speculation.

If House Bill 563 is ultimately adopted, its ambiguous language could also be construed to apply retroactively to existing laws. If this occurs, its negative implications could be significant. First, the bill may raise Ohio Constitutional issues because it continues the trend to remove power from local governments^[8] and whittle away at the Ohio Constitution’s Home Rule Amendment.[9] Generally, the Home Rule Amendment is a long-settled principle that local governments have the authority to exercise powers that are not in conflict with the state laws.^[10] Accordingly, local governments, that best understand their community’s needs, will lose their ability to regulate zoning requirements to meet those needs.^[11] Residentially zoned neighborhoods may face futures of late-night parties and a revolving door of transient neighbors. The executive director of the Ohio Municipal League, Ken Scarrett, addressed the concerns of holding transient renters accountable for rental regulation violations. Scarrett warned that the “biggest concern is that sometimes these rentals happen on weekends, parties happen.[12] Scarrett also emphasized the pressure these disruptions have on local law enforcement and other social services. This is all not to mention the impact on local income taxes if transient guests replace residents.

A final issue presented in House Bill 563 requires local government to regulate short term and long-term rentals the same despite the different issues they may present. While the bill permits the regulation of public health and safety and public nuisance laws such as noise, littering, and parking^[13], these issues are likely to be more prevalent in short term rentals because of the number of guests visiting the property.^[14] In particular, House Bill 563 will render enforcing zoning codes difficult against transient guests, who often leave before a complaint is even filed, and absentee landlords that may manage the property from states away.^[15] Therefore, without the ability to address the distinct issues different types of rentals present, House Bill 563 seemingly puts the interests of short term rental owners above the overall needs of the community.

At its core, House Bill 563 presents a debate between the rights of the homeowner and the rights of local governments. The bill now awaits a vote by the full House before it will head to the Senate and Governor Mike DeWine for final approval. There is no set timetable for when the next vote on House Bill 563 will take place, but the House is expected to return from Summer Recess in September, with the next floor session taking place in November 2022.

Mansour Gavin’s attorneys will keep you apprised of how House Bill 563 proceeds and help you navigate challenges presented by its adoption. Should you have any questions or would like further clarification on this or other real estate matters, reach out to Mansour Gavin’s Real Estate group.