New regulations streamline process for obtaining Covington short-term rental licenses

The City of Covington has streamlined the process for obtaining a license to rent out a house for overnight stays.

The new regulations for short-term rentals or vacation rentals – commonly known by their Airbnb and Vrbo platforms – are the anticipated follow-up to the new regulatory framework adopted by the City of Covington last year.

Designed to rein in “the wild wild west” proliferation of short-term rentals happening across the country, protect the residential character of Covington neighborhoods, and preserve the affordability of housing for long-term residents, the first phase of regulations passed last year included a new licensing structure, caps on licenses, and punishment for bad actors.

(Photo from City of Covington)

In return, the new changes passed recently by the Covington Board of Commissioners will make it easier for property owners to apply for licenses. It also restructures the fees and tweaks the previous caps on the number of short-term rentals that can exist in various neighborhoods.

“We said all along that our regulations of short-term rentals would be a balancing act, and – just like we promised – we are making it easier for property owners who abide by the rules to create businesses and make money,” Mayor Joe Meyer said.

The changes were made in two ordinances recently approved by Commissioners: An amended Chapter 127 of the Covington Code of Ordinances and an amended Chapter 158 of the City’s Neighborhood Development Code, a la “zoning.”

The process: The biggest change comes in the zoning of non-host-occupied short-term rentals, which will become a “limited use” instead of a “conditional use” in six zoning districts: suburban residential, semi-urban, downtown core, traditional urban mixed use, traditional urban residential, and auto urban commercial.

That change puts the decision on whether to grant a license in the hands of City staff instead of requiring a long, cumbersome application process before the City’s Board of Architectural Review and Development, or B.O.A.R.D. The previous process could take months. The new process could take as little as a week.

Citizen appeals: The new rules also expand the scenarios under which neighbors can appeal the granting of a license. In addition, once a license is granted and a short-term rental is in operation, neighbors will still have the ability to report nuisances. Properties that cause problems with noise and trash, etc. can have their license revoked by the City’s Code Enforcement Division.

Costs: Rather than pay the $600 application to get a hearing before the B.O.A.R.D. in an attempt to get a conditional use permit, applicants will pay an $80 change-of-use application fee.

There will also be changes to the cost of the actual rental license. The old rental license fee of $30 failed to adequately cover the cost of a required inspection, plus other administrative costs. The new annual license will cost $500 (although that fee will be paid only if the applicant receives a license). Renewal of the annual license will cost $250. If a unit fails its inspection and has to be re-inspected, that re-inspection will cost $100.

Density limits: The new Chapter 127 also tweaks how density limits for non-host-occupied short-term rental licenses are capped in areas across Covington.

The system adopted in 2023 used only historic district boundaries to set density limits. The new chapter uses a combination of historic district boundaries and neighborhood boundaries to ensure equitable distribution of short-term rentals throughout the city. The collective total of those limits is 151 citywide, eliminating the need for the previously established citywide cap of 150.

For more about Covington’s rental license program and requirements, visit the rental license application portal at the City’s website.

For more on the history of the City’s regulation of vacation rentals, see teh article “City to issue new short-term rental licenses.”

City of Covington

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