Airbnb screen capture Feb 12 2016

Hundreds of people in the Cleveland area are offering up rooms, condominiums, apartments or entire houses for rent on Airbnb, a popular home-sharing website.

(Website screenshot)

CLEVELAND, Ohio - Homeowners and apartment dwellers who take in short-term tenants for extra cash might have to change the way they do business, based on a series of regulations proposed by Cleveland City Hall.

Mayor Frank Jackson's administration wants to regulate and tax short-term rentals, which populate websites including Airbnb, HomeAway and FlipKey. The city is following in the footsteps of major markets, such as Philadelphia, in its attempts to manage the fast-growing home-sharing business and grab a slice of the revenues.

But aspects of Cleveland's proposal are prompting pushback from Airbnb, the biggest player in the industry. And some local hosts aren't thrilled.

Cleveland City Council hasn't talked about the short-term rental legislation, which was introduced in early January. A council committee probably won't take up the topic until early March because of budget hearings.

On Feb. 5, though, the Cleveland City Planning Commission spent about 15 minutes discussing the changes, meant to allow rentals in residential areas while limiting who can be a landlord and how long they can host guests. The commission gave the ordinance, which involves changes to the city's zoning code, a thumbs-up but deferred to council on the more controversial points.

The proposed changes would:

* Update the city's zoning code to permit short-term rentals in residential neighborhoods.

Cleveland's code was written long before anyone could imagine an era of instant Internet bookings and websites that link hosts and guests across the world. The current wording arguably doesn't even allow short-term house rentals. That might be news to the hundreds of people in the city who are marketing rooms, condos or entire houses as rentals where guests can stay for a few days or weeks.

* Restrict those rentals.

The city wants to cap a host's ability to rent at 91 days per year. Each guest could stay for a maximum of 30 days. And the house, condo or room that's being rented must be a primary residence. That means the host has to live there for more than 51 percent of the year. Hosts wouldn't have to file rental registration certificates with the city - something that Cleveland requires traditional landlords to do, with limited success.

* Set basic standards.

Short-term rental units would have to include smoke detectors and carbon monoxide detectors. Hosts would need to provide information about trash pick-ups and recycling and make sure guests have a way to reach them.

* Apply Cleveland's 3 percent transient-occupancy tax.

Right now, Cleveland defines a hotel as a facility with at least five rooms. Under the proposed ordinance, a hotel could be just a single room. That adjustment would extend the city's hotel tax to visitors staying at hundreds of dwellings that are currently slipping through the cracks. Booking agents - not hosts - would be responsible for collecting the money from guests and turning it over to the city.

Proposed limits meet with opposition

On Friday, an Airbnb search turned up more than 900 Cleveland-area listings, ranging from an $18 room posted by a student near Case Western Reserve University to weeklong rentals priced at thousands of dollars a night during the Republican National Convention in July.

Airbnb already has agreed to start collecting hotel taxes here if Cleveland City Council signs off. The company, based in San Francisco, also has been talking to Cuyahoga County leaders about collecting the county's 5.5 percent lodging tax.

But Airbnb is at odds with the city about the 91-day annual limit, which the company believes will create a hardship for hosts who rely on short-term rentals to pay their bills. A local attorney who represents Airbnb told the planning commission that the company is pushing for a 180-day limit, instead.

"Across Cleveland, home sharing is making it possible for middle class people to turn what is typically their greatest expense - their housing - into an economic opportunity," Christopher Nulty, a company spokesman, wrote in an email. "And we trust the City Council - who has shown true leadership on this issue - will recognize the value and importance of being able to do this 180 days each year."

The city did not make anyone available for an interview, despite repeated requests from The Plain Dealer. During the planning commission hearing, though, a law department representative said Cleveland is trying to protect homeowners.

"What we want to avoid is entrepreneurs purchasing homes in neighborhoods solely to rent them out on a short-term basis, so essentially purchasing a home next to you to turn it into a hotel," Richard Horvath, the city's chief corporate counsel, told the commission.

He acknowledged that the GOP convention, with a potential crowd of 50,000 people, brought the short-term rental issue to the city's attention. Hotels have reserved more than 16,000 rooms across the region for delegates, media organizations and people with official ties to the convention. But that could leave thousands of visitors looking for lodging. That prospect has would-be landlords flocking to Airbnb and other websites in hopes of making a quick buck.

Philadelphia took steps to regulate and tax short-term rentals in the run-up to another headline-grabbing event, Pope Francis' visit in September. That city adjusted its zoning code to legalize rentals, extended lodging taxes to guests and implemented restrictions that are similar to what Cleveland is considering - with a notable exception. Hosts in Philadelphia, where the Democratic National Convention will take place in July, can rent for up to 180 days each year.

Hosts see abundant visitor demand

Larry Shaffer, who rents out a private suite at his Clifton Boulevard home on Airbnb, believes Cleveland deserves to collect the lodging tax. He wasn't flustered by the proposed owner-occupancy requirement for hosts. And he appreciates the city's attempts to keep investors from buying up houses to use as short-term rentals.

But Shaffer objected to the idea of an annual cap.

"I would find that very problematic," he said, noting that he and his partner put their listing on Airbnb in early June and booked 90 nights between then and the end of November, when they took a brief hiatus from hosting. "One hundred and eighty days would be more feasible, but I still think that's pretty limiting based on the activity."

Shaffer, who is retired but owns traditional rental properties, said he didn't get into Airbnb hosting for the money. There are investors in Cleveland who operate short-term rentals as businesses, and there are homeowners who rent out a spare bedroom to help with the mortgage payment. For Shaffer, though, hosting is largely about the experience - meeting new people and showing them around.

"The Airbnb hosts are actually ambassadors for the city," he said. "I had 90 guests that went to restaurants and attractions and the art museum and the botanical gardens and the Christmas Story House and all of those things."

Bobbi Reichtell and Mark McDermott open up a room in their house, in the Detroit-Shoreway neighborhood, to couch-surfers and traveling cyclists who don't pay and to Airbnb guests who do. They're occasional hosts, so the city's proposed rules aren't likely to change their routine. But Reichtell questioned the wisdom of putting time limits on short-term rental activity in a city hungry for visitors and cash.

"As long as there's a bed tax being charged, I don't understand why the city would make that restriction," said Reichtell, who leads a community development nonprofit focused on the district surrounding Cleveland State University. "We have such an abundance of houses.

"I understand in places like San Francisco, Chicago and Boston," she said. "There are affordable housing organizations that are opposed to Airbnb in general because so much of the housing stock has gotten purchased and then rented for these short-term rentals for visitors. And it's shrinking the available housing for people who just want to live there."

Cleveland, she said, is in a different position.

If city council approves the proposed code changes, officials still might have to strike agreements to collect taxes through other home-sharing websites and booking businesses. And then there's the question of enforcement.

At the recent planning meeting, commission member Lillian Kuri asked Horvath how the city will track down hosts who are flouting the rules.

"That is a challenge," he said. "It is a challenge; however, there are ways to investigate whether or not, because these properties are listed online. ... It's not impossible to obtain that information. And as with most issues, neighborhood complaints will make it very clear to us that people are renting out their property on a short-term basis."