In lieu of state legislation detailing how local governments can or cannot regulate short-term rental units, Butler County rentals booked on popular sites like Airbnb and Vrbo face varying levels of oversight and taxation based on which town they’re in.
Cities currently have complete home-rule on regulating, taxing or inspecting short-term rentals — or even outright banning the practice, as nearby West Carrollton did 2022, though a bill in the State Legislature moved to take away this power from municipalities before it stalled in committee.
So far, the only population centers in Butler County that have begun regulating short-term rental units are Hamilton and Oxford, but those frameworks are not congruent. In Oxford, for example, short-term rentals must register with the city and pay a 6% lodging tax and agree to safety inspections every other year. In Hamilton, short-term rentals must pay a flat $50 for a license (if it’s not owner-occupied) and subject to “as needed” inspection, but no lodging tax.
Still, customers booking short-term rentals in either city cannot be entirely sure that the property they’ve booked has been inspected, at least not yet. In Hamilton, Director of Planning Liz Hayden said there are currently 56 licenses issued, but she estimated that more than 20 currently-operational units still need to be licensed. In Oxford, they have registered 25 short-term rental units and estimate another 25 or so that still need to be registered.
Lodging tax and affordable housing play a role
Oxford Community Development Director Sam Perry said part of this problem is the patchwork nature of the regulations: it is difficult to force compliance if an owner-operator isn’t aware of the fact that they need to register their rental unit or pay taxes on its sales.
“Since it’s not a national standard, necessarily, some people are not aware that there’s a local lodging tax,” Perry said.
Oxford’s lodging tax is so far unique to the county, and comes, in part, because the city is worried about the impact non-regulated, short-term rentals can have on their already rental-heavy housing stock. Doug Elliott estimated that 70% of the city’s 6,300 housing units are rented out, as a result of the town’s student population.
“We’re concerned about our affordable housing stock, and some council members have voiced concerns that this reduces the supply of housing, making affordable housing more of an issue than it is now, if they’re taking them [off] the market just for this,” Elliott said.
As a result of this tendency, the City of Oxford has operated a rental inspection program in nearly 30 years, a framework which has made it relatively simple for the town to regulate short term rentals.
“We’re really just adding short term rentals to that existing program and requiring them to register just like any other rental property,” said Perry. “[They] will have to be registered and inspected every other year, the only difference would be that the short term rentals would need to remit the lodging tax.”
In the two years Oxford has collected lodging taxes on short term rentals, Elliott said the nearly $14,000 it’s yielded is less than he would have expected.
Other municipalities, including West Chester Twp. and the City of Fairfield, are undergoing updates and revisions to city code which could potentially allow for new regulations on short term rentals, though nothing is official yet.
Middletown City Planner James Metz said there is no current plan to regulate short-term rentals anytime soon — in part because it’s not a major need yet.
“I don’t think we’re for or against it — I think we’re very open and we want to see what our neighboring cities and counties do,” Metz said. “My personal question would be: How would anything be enforced?”
For Hamilton, Hayden said the city moved forward with its short-term rental licensing program within the past few years not in the interest of making money on the transactions or stifling the subset of the industry, but rather to ensure proper protocol — through licensing, the city can collect 24-hour contact information for the property, make sure there’s proper parking, and track where the rental units are going.
“And if there is an issue, [it makes sure] that we have the regulations in place to put fines on them and revoke their license,” Hayden said. License-holders do, however, agree to pay income taxes on the proceeds from their short term rentals.
Nick Gallant, the president of the Butler County Real Estate Investors Association, said he’s seen a marked increase in interest from Butler County real estate investors regarding short term rental properties in Hamilton as Spooky Nook was developed and has begun bringing in thousands of visitors to the city every month.
Of the 56 short-term rental licenses in Hamilton, 18 of them are in Prospect Hill, near the new Spooky Nook Sports Champion Mill mega-sports complex that is expected to attract 1 million visitors in its first year.
“There’s a need for short-term rentals to house the people that come into the area for the day or the weekend,” Gallant said. “As entrepreneurs, they’ve helped facilitate that.”
Gallant, who doesn’t personally have any short term rental properties of his own, said the business comes with its pros and cons compared to standard year-long leasing: nightly rates are higher, but owners can’t guarantee they fill the property every night for a month.
“That also means higher marketing and labor costs to properly run a short term rental, because you have to fill 30 days versus one contract [for a standard lease].”
In regard to the regulations that might come from local municipalities in the future, Gallant said both he and his organization support “any reasonable legislation that doesn’t stifle small business or entrepreneurship” in the field of short term rentals.
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