Cleveland makes short-term rentals a permitted use in one-family districts
Cleveland makes short-term rentals a permitted use in one-family districts
2026-09-15 · Ohio · Regulation
Cleveland City Council passed Ordinance No. 561-2026 on June 1, 2026, creating a licensing regime for short-term rentals and — in the same stroke — adding short-term rentals to the list of uses permitted outright in the city's One-Family Districts. The substantive provisions take effect 180 days after passage, on or about November 28, 2026.1
The ordinance enacts new Cleveland Codified Ordinances §§ 686B.01 through 686B.11, amends the transient occupancy tax sections at §§ 193.01 to 193.03, amends § 337.02 (One-Family Districts), and repeals § 337.251, the Limited Lodging in Residence Districts section that had governed the practice since 2016.
What the ordinance requires
The licensing rule is the opening provision, and it is unconditional:
“No owner or operator shall operate, rent, lease, sublease, license or sublicense a dwelling unit as a short-term rental without a short-term rental license from the Commissioner.”
The Legislative Summary attached to the council file prices it: a $150 application fee, a $150 annual renewal, and $500,000 in liability insurance. Civil penalties run to $5,000 for operating without a license, $1,000 per violation for advertising without one, and $1,500 a year for an unregistered booking agent; failure to license is a first-degree misdemeanour under § 686B.991.
Occupancy is capped at “two (2) per bedroom, plus two (2) additional persons” overnight. Operators must notify the neighbours before the first guest arrives — § 686B.06(k) requires written notice of the local contact's name and phone number to “all residential properties adjacent to, directly and diagonally across the street from, and directly and diagonally behind the short-term rental property,” with updates “within seven (7) days of a change in status.”
Two further provisions matter to anyone tracking a unit's status. A short-term rental is exempt from the certificate of rental registration under Chapter 365, but “[a] dwelling unit rented for more than thirty (30) consecutive days is not a short-term rental as defined in this chapter and requires a certificate of rental registration.” And § 686B.05(e) states flatly that “[a] dwelling unit that is operated as a short-term rental is not eligible for tax abatement.”
The zoning change underneath it
The provision with the longest reach is not in Chapter 686B at all. Council added a new subsection to the permitted-use list for the city's One-Family Districts:
“Short-term rentals, as defined in Chapter 686B, subject to the density limitation set forth in that chapter.”
Council was explicit about why it was regulating. The purpose section at § 686B.01 records that “the proliferation of short-term rentals in residential neighborhoods can adversely impact the health, safety, property, density and residential character of a neighborhood,” and a whereas clause warns that “transient visitors taking the place of permanent residents can destroy the unity, communication and accountability between permanent residents.”
What the city permits and what a declaration permits are two different questions. Our Ohio short-term rentals page sets out the second one.
What it changes for a Cleveland board
Nothing in Ordinance 561-2026 mentions deed restrictions, declarations or covenants. That silence is legally correct and practically dangerous. A zoning permission is a permission from the city; it is not a waiver of a private restriction. An owner in a platted Cleveland subdivision or a condominium whose declaration bars transient occupancy is exactly as restricted on November 29, 2026 as they were the day before, and the association remains the only party who can enforce that.
The practical shift runs the other way, and it is foreseeable. Associations that had been relying on the old limited-lodging section — § 337.251, now repealed — as a de facto municipal backstop have just lost it. From late November the city's answer to “can I run an Airbnb here?” in a one-family district is yes, subject to a licence. If a board wants a different answer, it needs to be in the association's own documents, enforced by the association's own process. Our Ohio short-term rentals page covers the declaration language that does that work.
The grandfather clause, and who it does not protect
Existing operators get a narrow exemption from the density cap under § 686B.07(d): a unit “in operation as limited lodging under Section 337.251 for a period of at least one year prior to the effective date of this ordinance” escapes the cap, but only if the operation “was at all times in full compliance with these Codified Ordinances, and there are no recorded complaints against the property when operated as limited lodging.”
Read that against a covenant. Full compliance with the Codified Ordinances is the test. An owner who operated in breach of a recorded declaration for a year, with no city complaint on file, may well satisfy the grandfather clause — and still be in breach of the declaration, which the city has no role in enforcing and no record of.
What to do before late November
Read your own use restriction now, not after the first licence issues. Declarations written before 2010 often speak of “single-family residential purposes” without ever defining the minimum term of occupancy. That phrasing was adequate against a boarding house and is contested ground against a 30-day rental. Boards that want a bright line usually need a stated minimum lease term, not a use clause.
Decide who tracks licences. The city licence is a public record and the neighbour-notice requirement at § 686B.06(k) means the association's own members will often learn of an application before the board does. A board with no process for receiving that information will hear about it from an angry neighbour, late.
Note the thirty-day line. Because a tenancy of more than thirty consecutive days falls out of Chapter 686B and back into the Chapter 365 rental-registration regime, a unit can move between two different city systems without moving between two different categories under most declarations. If your documents distinguish “short-term” from “leasing” at all, check whether the line you drew matches the line the city just drew.
One drafting caution for anyone quoting the ordinance. The Legislative Summary attached to the council file is dated April 24, 2026 and predates the floor amendment. Its opening bullet and its numbered item 7 disagree with each other on the density figure. The enrolled text controls, and the figure in it is 10 percent.
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