Cuyahoga County changed its bed tax rules last month and now the city of Cleveland is moving in that direction too. Officials say online home rental brokers like AIR B-N-B and Home Away requested the changes.
Ideastream’s Mark Urycki explains the proposal could affect people renting their homes for the Republican National Convention.
A change in state law has allowed cities to impose a hotel bed tax on “guests” who want to rent rooms in private homes for overnight stays. Cleveland’s Chief Corporate Counsel Rick Horvath says those homes can now be considered hotels.
“Whether you’re renting an owner-occupied dwelling or any other dwelling, any transient lodging in the city of Cleveland, defined as renting less than 30 days, will be taxed the city’s transient occupancy tax of 3%. “
That’s on top of the county’s 5 ½ percent lodging charge.
Owners must live in the home most of the year. And if they rent their house for more than 91 days a year they must register with the city. Brian Cummins wondered whether that limit should be extended to 100 days or longer.
But the Director of Cleveland’s Building and Housing Department, Ron O’Leary, said the city needs to know what houses are renting. He strongly objected to allowing any more than 91 days saying the city needed to inspect the sites to see how they were impacting the neighborhoods.
“I’ve found five Airbnb Home Away rentals in the city of Cleveland that are basements or attics. It is against the law to illegally convert a basements into a bedroom or an attic into a bedroom for the purpose of augmenting or supplementing your income.”
Councilwoman Phyllis Cleveland of ward 5 worried that such home businesses could lead to a nefarious use in some neighborhoods.
“You know the transient lodging could be used in some of our neighborhoods that aren’t so hip and desirable. I just have some concerns that, you know, what may be good for one neighborhood may not be good for every part of the city.”
The Development Committee voted to allow the ordinance to expire in February so they can examine any unintended consequences.