Variances for the second phase of a micro-unit apartment project on West 14th St. in Tremont were unanimously approved this week by the city’s Board of Zoning Appeals, despite neighbors’ concerns over its use as short-term lodging.
Tremont West Development Corporation, the nonprofit serving the area, objected to the fact that the owners were renting it for short-term stays through Airbnb. However, the owners argued that apartment buildings are considered commercial, and city laws limiting short-term rentals in residential areas do not apply.
TWDC’s economic development committee sent a letter to BOZA asking them to disapprove the project. “Our members discussed the need for city council to work towards regulations on Airbnb’s that will allow reasonable use while protecting the neighborhood from negative effects,” wrote chairperson Jaime Declet in the letter.
“I’m not trying to violate anything,” developer Rick Maron responded to TWDC’s comments, arguing that his project should be approved. “I’m happy to discuss with anyone what portion [of Tremont Oaks II] should be Airbnbs or apartments. I think the CDC is using this project to get council to regulate Airbnbs.”
Airbnbs have become a flashpoint of controversy in some areas of Cleveland as some have hosted illegal parties. Legislation was introduced last year to require hosts to obtain an annual license for $25 before renting out properties on Airbnb and other platforms. Hosts who don’t follow the city’s short-term rental rules could be fined $500 a day. However, that legislation is currently listed as under administrative review on council’s website.
Crain’s reported last year that, “As of Jan. 1, there were 1,600 active Airbnb listings in Cleveland, plus hundreds of local houses, apartments and condos advertised on competing sites such as FlipKey and VRBO.” In November 2020, Airbnb suspended 25 short-term rental listings in Cleveland for violating its ban on house parties.
While Cleveland limits short-term rentals (30 days or less) to primary residences, “many owners skirt the law,” Crain’s reported. “Real estate investors and other homeowners whose rentals don’t fit those parameters technically must seek regulatory approvals including a zoning change for commercial use. But they don’t, and the city doesn’t have a mechanism — yet — to track them or shut them down.”
Mark Raymond, owner of the Cleveland Hostel, said that he and other hotel owners do not receive tax abatement, and it’s not fair that investors who convert apartment buildings into short-term rentals should receive tax abatement. Tremont Oaks received 100%, 15-year tax abatement on its built value under the city’s tax abatement policy, which is intended to be limited to residential uses.
“They’re getting tax abatement even though they’re not truly using the property for a long-term residential use, they’re using it as a hotel,” said Raymond, adding that he estimates there are hundreds of property owners across the city taking advantage of this loophole, and that investors buying up homes for Airbnbs could be one factor driving up the cost of housing in Tremont.
Raymond said that he’s been working with Ward 3 councilman Kerry McCormack, who plans to introduce new legislation regulating short-term rentals. “Other cities have figure out how to do this,” he said. “Once again, Cleveland is behind.”
When asked by BOZA commission members whether the project falls under Cleveland’s short-term rental legislation, zoning administrator Rick Riccardi said, “Short term rental regulations are only applicable in residential districts, not commercial districts.”
Tremont Oaks II will be built on W. 14th St. near Fairfield Ave. adjacent to the eight-unit Tremont Oaks Phase I. The developer bought the land from the city of Cleveland and Ohio Department of Transportation. Maron is also developing micro-units in the University Circle neighborhood.
Maron told the commission that he’s committed to improving the area and has not yet decided on the final use of the properties. In University Circle, he said, he’s in the process of converting some units that he owns there from Airbnbs into longer-term rentals. He said that he’s still determining the highest and best use for Tremont Oaks and some units may be rented for longer stays.
Learn more about Cleveland’s short-term rental rules and regulations here: https://www.progressiveurban.com/pureblog/2020/02/05/short-term-rental-rules-and-regulations
Lee Chilcote is editor of The Land.