Council discusses up to 3% lodging tax, special-account allocation and short-term rental rules

Painesville City Council discussed a proposed lodging-tax chapter and next steps for regulating short-term rentals at the April 22 meeting, but took no final vote.

Administration presented a draft chapter (proposed local chapter 194) that would authorize the city to levy a lodging tax up to 3 percent and segregate proceeds into a special account restricted to arts and entertainment uses as determined by council or through the budget process. Staff said the administration's draft language allows council discretion on the exact rate up to 3 percent and on the effective date; the code would require establishments subject to the tax to register with the finance department within 30 days of passage or start of operation.

Councilmembers discussed allocating a portion of the lodging-tax revenue directly to the recreation department, with one councilmember suggesting 50 percent as a starting point for consideration. No council directive set a specific allocation; council asked staff to leave allocation details for future readings and budget work.

On short-term rentals (Airbnb-style units), staff reported an ongoing investigation of one suspected short-term rental for potential code violations and told council the city currently regulates inns and bed-and-breakfasts but lacks a comprehensive short-term-rental framework. Staff presented two options: (1) prepare a comparative chart showing how nearby cities regulate short-term rentals so council and residents can weigh options, and (2) prepare proposed regulatory language for council to consider. Council asked administration to pursue both approaches and recommended that any zoning changes be coordinated with the planning commission.

Council did not vote on tax rates or short-term-rental rules at the meeting; staff will return with proposed definitions, regulatory options, and recommendations to the planning commission before drafting final legislation.