Lorain County, Ohio Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Lorain County, Ohio?

Lorain County, Ohio has recently passed new regulations for short-term rentals like Airbnb and VRBO. These rules aim to address issues raised by residents about disruptive guests, parking problems, and other disturbances in neighborhoods with a high concentration of vacation rentals.

Starting a Short-Term Rental Business in Lorain County

As of December 2023, Lorain City Council passed an ordinance requiring short-term rental owners to:

• Register with the city annually
• Obtain a conditional use permit from the Planning Commission
• Pay a transient lodging tax, similar to hotels
• Provide at least 1.25 off-street parking spaces per guest room, including garage spaces

Failure to comply with these requirements can result in the city revoking the rental permit after review by the Planning Commission and City Council. The city also plans to hire additional enforcement officers to monitor short-term rentals using registration fees and tax revenue.

Under existing Ohio law, residential rental property owners must also register a contact agent with the Lorain County Auditor's Office within 60 days of filing the property conveyance form. Not doing so in a timely manner can incur a penalty of up to $150.

Residents have complained about issues like large parties, intoxicated guests, blocked driveways, and piles of trash at short-term rentals, especially those near the lake. Officials note many rental owners are from out-of-state and treat the properties solely as profit centers without regard for neighborhood quality of life.

While considering regulations, Lorain aimed to establish rules rather than completely ban short-term rentals. The city held public hearings for residents to voice concerns prior to the Planning Commission and City Council passing the new ordinance. Officials believe the regulations are a good start to governing vacation rentals more effectively.

Short-Term Rental Licensing Requirements in Lorain County

As of December 2023, Lorain County requires short-term rental owners to obtain a license from the city. The requirements, according to the official Lorain County website, are as follows:

1. Register the short-term rental property annually with the Lorain City Council. The registration fee is $125 per year, regardless of property size.
2. Obtain a conditional use permit from the Lorain Planning Commission. This is a one-time application with a fee of $500.
3. Pay a transient lodging tax on short-term rental income, similar to the tax paid by hotels. The tax rate and payment schedule are determined by the Lorain County Treasurer's Office.
4. Provide at least 1.25 off-street parking spaces per guest room, including spaces in a garage. On-street parking cannot be used to meet this requirement.

To submit the registration form and conditional use permit application, visit the Department of Building, Housing & Planning at Lorain City Hall. After submitting the required documents and fees, the registration and permit process typically takes 2-4 weeks for approval.

Short-term rentals operating without a valid license may face fines of up to $500 per day. The city also has the authority to revoke a rental permit if the owner fails to comply with the ordinance requirements. Repeat violations can lead to being permanently barred from registering a short-term rental in Lorain.

It's important for short-term rental owners to review the full ordinance text and stay updated on any changes to the law. The city plans to hire additional enforcement officers to monitor compliance using the registration fees and lodging tax revenue it collects.

Required Documents for Lorain County Short-Term Rentals

To operate a short-term rental in Lorain County, owners must submit the following documents to the Department of Building, Housing & Planning at Lorain City Hall:

1. Annual Registration Form: This form registers the property as a short-term rental with the Lorain City Council. It must be renewed each year and requires a $125 fee.
2. Conditional Use Permit Application: Short-term rental owners must obtain a one-time conditional use permit from the Lorain Planning Commission. The application fee is $500. The permit helps ensure the rental property is consistent with the surrounding neighborhood.
3. Proof of Transient Lodging Tax Registration: Owners must register to pay the transient lodging tax (aka bed tax) with the Lorain County Treasurer's Office. The current tax rate is 3% of short-term rental income. Proof of registration must be submitted with the other documents.
4. Site Plan Showing Parking: A detailed site plan must demonstrate the property has at least 1.25 off-street parking spaces per guest room, including any spaces in a garage. On-street parking cannot be counted toward this requirement.
5. Rental Registration Form: Per Ohio law, all residential rental property owners must also register a contact agent with the Lorain County Auditor's Office within 60 days of filing the property conveyance form. The form is available on the Auditor's website.

Failure to submit these documents and obtain a valid short-term rental license can result in fines of up to $500 per day. The city also has the authority to revoke a license for non-compliance. Repeat violations may lead to being permanently barred from registering a short-term rental in Lorain County.

For the most up-to-date requirements and forms, visit the Permits & Publications page on the City of Lorain website. The Building, Housing and Planning Department can provide additional guidance on the short-term rental licensing process.

Lorain County Short-Term Rental Taxes

Short-term rental owners in Lorain County are subject to several taxes related to their rental business. It's important to understand these taxes and comply with all filing and payment requirements.

Transient Lodging Tax (aka Hotel Tax or Bed Tax): Lorain County levies a 3% transient lodging tax on short-term rental income. This tax is paid by guests as part of their total bill and is remitted by the owner to the Lorain County Treasurer's Office on a quarterly basis.

City of Lorain Transient Occupancy Tax: In addition to the county tax, rentals located within the city limits of Lorain are subject to a 3% transient occupancy tax. This tax also applies to stays of 29 nights or less and is paid by the guest. Owners must remit this tax to the City of Lorain.

State Sales Tax: Ohio charges a statewide sales tax of 5.75% on accommodations. If a rental property offers 5 or more sleeping rooms, the owner must collect state sales tax from guests and remit it to the Ohio Department of Taxation.

Local Sales Taxes: On top of the state sales tax, counties and some local jurisdictions in Ohio also levy their own sales taxes. These vary by location but are generally in the range of 0.75% to 2.25%. Check with the Lorain County Auditor for the exact rates that apply to your rental's address.

Income Taxes: Income earned from short-term rentals is subject to federal, state, and possibly local income taxes. Owners must report rental income on their tax returns and pay the appropriate amount owed.

Possible Deductions

Short-term rental owners can typically deduct expenses related to operating and maintaining their rental property. These may include:

1. Mortgage interest
2. Property taxes
3. Insurance
4. Utilities
5. Repairs and maintenance
6. Cleaning and supplies
7. Advertising and platform fees
8. Depreciation of assets

It's best to consult with a tax professional to determine which deductions apply to your specific situation and how to properly claim them on your tax returns. Keeping detailed records of all rental income and expenses is crucial for tax purposes.

Failing to comply with short-term rental tax obligations can result in penalties, interest, and legal issues. Owners should make sure they understand all requirements and stay up-to-date with any changes to tax laws.

Ohio Wide Short-Term Rental Rules

While many short-term rental regulations are set at the local level in Ohio, there are a few state laws that Lorain County hosts should be aware of.

In 2022, the Ohio House of Representatives passed House Bill 563, which aimed to prevent local governments from banning short-term rentals outright or excessively restricting their operation. However, the bill has not yet been passed by the Ohio Senate or signed into law by the governor. If enacted, it would limit the ability of cities and counties to regulate the number, frequency, or duration of short-term rentals.

Currently, Ohio law requires short-term rental hosts to pay state sales tax (5.75%) and any applicable county lodging taxes on their rental income. Lorain County levies a 3% lodging tax. Hosts are responsible for collecting these taxes from guests and remitting them to the appropriate authorities.

Additionally, all residential rental properties in Ohio, including short-term rentals, must meet certain habitability and safety standards under state landlord-tenant law. This includes providing running water, heat, and locking doors and windows. Properties must also be free of pests and hazardous conditions.

At the state level, there are no universal registration or licensing requirements for short-term rentals in Ohio. However, many cities like Cleveland and Columbus have implemented their own permit systems and regulations. Lorain County hosts should check with their local government to determine what rules apply to their specific property.

As short-term rentals continue to grow in popularity across Ohio, state lawmakers are likely to revisit the issue of consistent statewide standards. For now, Lorain County hosts must navigate a patchwork of state and local regulations to ensure they are operating legally and responsibly.

Does Lorain County Strictly Enforce STR Rules?

Based on discussions in real estate investing forums like BiggerPockets and Reddit, Lorain County appears to be taking a stricter stance on short-term rental regulations compared to some other cities in Ohio. The county has recently passed new rules requiring STR owners to register with the city, obtain permits, pay lodging taxes, and provide off-street parking.

While these requirements are not uncommon, some hosts feel Lorain is less Airbnb-friendly than other markets due to the added regulatory hurdles. One investor on BiggerPockets expressed hesitation about purchasing a large STR portfolio in Lorain, seeking input from other experienced landlords in the area first.

On the Cleveland subreddit, commenters noted STRs are putting pressure on the local housing market, with some rentals going for over $1000 per week in popular neighborhoods. Supporters of the new regulations hope it will open up more long-term housing inventory and stabilize prices for residents.

However, the city does seem committed to enforcement. Lorain officials have stated plans to hire additional officers to monitor STR compliance using permit fees and tax revenue. Fines for operating without a valid permit can reach $500 per day, with the risk of an owner being barred from registering STRs in the future.

Despite the rules, some hosts continue to operate STRs in Lorain County, particularly in high-demand areas near Lake Erie and tourist attractions. But the general consensus is that Lorain is taking a more heavy-handed approach compared to other cities that have been slower to regulate the industry.

Investors should carefully weigh the potential revenue of STRs against the costs of compliance and the risk of penalties in Lorain County. While not impossible, operating a successful Airbnb is likely more challenging here than in other Ohio markets with looser oversight.

How to Start a Short-Term Rental Business in Lorain County

Starting a short-term rental business in Lorain County requires careful planning and compliance with local regulations. Here are the key steps to get started:

1. Research local zoning laws and regulations: Before investing in a rental property, thoroughly review Lorain County's short-term rental ordinances. As of December 2023, owners must register with the city annually, obtain a conditional use permit, pay lodging taxes, and provide adequate off-street parking. Failing to comply can result in fines of up to $500 per day.
2. Choose a suitable property: Look for a property that meets the county's zoning requirements and has strong potential for short-term rental success. Consider factors like location, amenities, size, and parking. Properties near Lake Erie, tourist attractions, and transportation hubs tend to be in high demand.
3. Develop a business plan: Create a detailed plan outlining your target market, pricing strategy, marketing approach, and financial projections. Determine your startup costs, operational expenses, and revenue goals. A solid business plan will help guide your decision-making and secure financing if needed.
4. Register your business: Register your short-term rental with the Lorain City Council and obtain a conditional use permit from the Planning Commission. You'll need to pay an annual registration fee of $125 and a one-time permit application fee of $500. Allow 2-4 weeks for the approval process.
5. Obtain required licenses and permits: In addition to registering with the city, you may need other business licenses and permits to operate legally. These could include a general business license, tax permits, and a short-term rental license demonstrating compliance with health and safety codes.
6. Register with tax authorities: Register to pay the 3% Lorain County transient lodging tax and any other applicable taxes. You'll need to collect these taxes from guests and remit them to the proper authorities on a regular basis. Consult with a tax professional to ensure full compliance.
7. Prepare your property for guests: Furnish and equip your rental to meet guest expectations and stand out from competitors. Invest in quality furniture, linens, kitchenware, and amenities. Install smart home technology and strong security measures to protect your property and give guests peace of mind.
8. Create a detailed listing: Craft an accurate, compelling listing on popular platforms like Airbnb and Vrbo. Use professional photos, highlight unique selling points, and clearly outline your rental's features, rules, and policies. Set competitive rates based on market research and your revenue goals.
9. Automate and optimize operations: Utilize vacation rental software and tools to streamline tasks like booking management, communication, cleaning, and dynamic pricing. Consider hiring a reputable property manager to handle day-to-day operations and ensure a smooth guest experience.
10. Prioritize guest satisfaction: Provide excellent customer service to generate positive reviews, earn repeat business, and build your reputation. Respond promptly to inquiries, offer helpful local recommendations, and address any issues quickly. Solicit feedback from guests and continuously improve your rental based on their suggestions.

By following these steps and staying attuned to Lorain County's evolving short-term rental landscape, you can launch and grow a successful vacation rental business. Remember to prioritize compliance, guest satisfaction, and adaptability as you navigate this dynamic industry.

Who to Contact in Lorain County about Short-Term Rental Regulations and Zoning?

For questions about short-term rental regulations and zoning in Lorain County, here are the key contacts and resources:

Lorain City Council

1. Address: Lorain City Hall, 200 W Erie Avenue, Lorain, OH 44052
2. Phone: (440) 204-2002
3. Website: https://www.cityoflorain.org/

Contact the City Council to inquire about registering your short-term rental, obtaining a conditional use permit, and complying with the city's STR ordinance.

Lorain County Auditor's Office

1. Address: 226 Middle Ave., 2nd Floor, Elyria, OH 44035
2. Phone: (440) 329-5207
3. Email: auditorweb@loraincounty.us
4. Website: https://auditor.loraincounty.com/

The Auditor's Office handles rental property registration and can provide information on the required contact agent form. They are also the point of contact for the 3% transient lodging tax.

Lorain County Community Development Department (Planning & Zoning)

1. Address: 226 Middle Ave, 5th Floor, Elyria, OH 44035
2. Phone: (440) 328-2322
3. Website: https://www.loraincountyohio.gov/575/Planning-and-Zoning

The Planning & Zoning division can answer questions about land use, zoning districts, and the approval process for short-term rentals in unincorporated areas of Lorain County.

Lorain Planning Commission

1. Address: Lorain City Hall, 200 W Erie Avenue, Lorain, OH 44052
2. Phone: (440) 204-2071
3. Website: https://www.cityoflorain.org/225/Planning-Commission

Contact the Planning Commission for details on obtaining a conditional use permit for your short-term rental in the City of Lorain.

In addition to these official contacts, STR hosts in Lorain County may find helpful information and support through online communities:

BiggerPockets Lorain Forum: https://www.biggerpockets.com/forums/577/topics/391850-lorain-ohio---looking-for-rentals

Connect with other real estate investors and STR operators in the Lorain area to discuss regulations, strategies, and market conditions.

Lorain County Subreddit: https://www.reddit.com/r/lorain/

Engage with locals to stay up-to-date on news, events, and issues affecting short-term rentals in Lorain County.

Airbnb Host Forum - Ohio: https://community.withairbnb.com/t5/Hosting/ct-p/Ohio-host

Join Airbnb's official forum to network with other Ohio hosts, ask questions, and share experiences navigating local STR regulations.

By staying in touch with these contacts and participating in relevant online communities, short-term rental hosts in Lorain County can ensure they have the latest information to operate legally and successfully.

What Do Airbnb Hosts in Lorain County on Reddit and Bigger Pockets Think about Local Regulations?

To get a sense of how short-term rental hosts in Lorain County feel about the new regulations, here are some relevant discussions from online forums:

Reddit - r/Cleveland thread on proposed STR law

• One commenter noted that while some restrictions make sense, they questioned the logic of trying to ban 30+ day stays, which are less likely to cause issues.
• Another mentioned STRs putting pressure on the local housing market, with some rentals going for over $1000 per week in popular neighborhoods near the lake. Supporters hope the new rules will open up more long-term housing inventory.

BiggerPockets Forum - Opinions on Investing in Cleveland at a Distance

• An investor expressed hesitation about purchasing a large STR portfolio in the Cleveland area, seeking input from experienced local landlords first in light of the changing regulatory landscape.
• While the post didn't mention Lorain County specifically, it reflects a cautious sentiment among out-of-state investors eyeing the Cleveland STR market as a whole.

Reddit - r/Cleveland thread on Gentrification Concerns

• One long-time resident lamented the rapid pace of gentrification pricing out artists and young people in trendy areas like Coventry, Tremont, and Edgewater.
• Commenters debated the pros and cons, with some arguing a degree of gentrification is needed to keep neighborhoods from crumbling. Others pointed out STRs and absentee landlords are accelerating the process compared to past decades.

BiggerPockets Forum - Confused about Cleveland Gentrification

• A real estate broker moving back to Cleveland after 12 years noted gentrification seems more sporadic and spread out compared to Chicago. They observed a hodgepodge of new construction, rehabs, and distressed properties even in "hot" areas like Ohio City and Gordon Square.
• The post suggests STR investors may need to be more selective in Cleveland compared to markets with clearer growth trajectories. Lorain County's new regulations could further impact these dynamics.

While these threads don't feature Lorain County hosts directly, they provide context on how STR operators and investors in the broader Cleveland area are reacting to increased regulation and market pressures. The sense is one of caution, as they navigate a shifting landscape that could impact their business models and returns.

As Lorain's new ordinance takes effect, it will be important to monitor forums for posts from hosts sharing their first-hand experiences with the registration process, fees, taxes, and enforcement. Their feedback will offer valuable insights for others considering entering the Lorain County STR market.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.