Airbnb Ban Proposed in Cleveland, Ohio

Published May 15, 2018

The City of Cleveland’s Department of Law is reviewing a proposed ordinance that would temporarily prohibit residents from sharing their homes with guests through peer-to-peer short-term rental services.

Citing an anecdote of a property suspected by a constituent to be an Airbnb property, city councilman Anthony Brancatelli (D-Ward 12) proposed an ordinance that would prohibit all rental contracts lasting 30 or fewer days in the city until December 31.

“We need the companies to ban hosts who break the city law, so this is a way to get the limited lodging companies to the table, and this is the most effective way to get them here,” Brancatelli told reporter Sam Allard on March 19.

In 2016, Cleveland redefined city tax laws to allow the collection of excise taxes from individuals using their homes to provide short-term rental services.

No hearings on Brancatelli’s proposed ordinance have been scheduled.

Questioning Assumptions

Baylor University economics professor Peter Klein says Brancatelli’s proposal falsely assumes peer-to-peer short-term rentals cause net harm to communities.

“What a lot of people who oppose rentals have in mind is, ‘Here’s the house on the street currently listed on Airbnb, and therefore there are some people living in it that we don’t know, there are too many cars parked out front, and it bothers me,'” Klein said. “When people complain about that, usually what they have in mind is, ‘If we ban short-term rentals, then that house will be occupied by a nice family with two parents, three beautiful children, and a nice, quiet dog. They’ll keep the house pristine and have tea parties out back, and everything will be just like a fairy tale.’ How do you know that’s the alternative?

“What if the person who currently owns the house cannot afford to maintain it, and without the income they get from Airbnb, they’re just going to let it run down?” Klein said. “By banning rentals, you’re taking away from some property owners the right to an income stream that could be used to improve the quality of the neighborhood and the property.”

‘This Is an Opportunity’

Micah Derry, director of the Ohio chapter of Americans for Prosperity, says Airbnb and other short-term rental services are a net positive for people and other businesses.

“This is an opportunity for a privately funded stimulus in the lives of individuals who have a product that is in demand, and Airbnb helps fill that void,” Derry said. “When you have something that’s as free-thinking as Airbnb, and especially when it’s not fettered by a lot of the thinking of ‘how we’ve always done it,’ whether it’s through regulation or through current taxing schemes, it forces the people who are stuck in a mindset of ‘how we’ve always done it’ to be creative and to try new things.

“It forces the hotels to become better, and in the end, it forces people who are back at that ‘micro’ level to decide how much they want to be in that marketplace and what are they going to offer people who stay at their home to have a positive experience,” Derry said. “It’s a net positive all the way around.”

Says Current Laws Suffice

Klein says problems caused by Airbnb guests should be addressed under existing laws instead of by creating new laws.

“If the issue is people and noise, then deal with it as people and noise,” Klein said. “The fact that there’s a commercial transaction taking place doesn’t really change anything. In other words, a rule that forbids any commercial payment for person A to stay in person B’s house—that’s what these ordinances are—that’s a solution that doesn’t address the problem, if there is a problem.”