Council debates lodging tax, enforcement challenges for short-term rentals

The Mentor-on-the-Lake City Council continued discussion Tuesday on Ordinance 2024-O-19, a measure that would add a lodging tax chapter to the codified ordinances and regulate short-term rentals.

Clerk read the ordinance on second reading. Law Director Mr. Lyons and council members outlined enforcement challenges for short-term rentals, noting the city’s limited enforcement resources and reliance on self-reporting. Mr. Lyons said the county has invested in a software tracker that can scan listing sites and alert officials to potential short-term rental units; he said that county tool could provide information to municipalities but does not itself regulate operations.

Council members questioned how the city would verify bookings, enforce monthly or quarterly reporting, and inspect private homes without owners’ consent. One council member raised the idea of conditional-use permits and multi-year recordkeeping requirements; the draft ordinance calls for four-year retention of records for short-term rental operators. The 3% rate cited in conversation was described as consistent with a neighboring village’s approach, though members said the final rate and collection mechanics remain to be settled.

Members discussed charging permit and enforcement fees to cover administrative costs. Law Director Mr. Lyons said audits or subpoenas to verify bookings would be time-consuming and expensive; he recommended coordination with the county’s tracker program and building a permit/fee structure to offset enforcement costs.

The council did not adopt the ordinance tonight. The clerk recorded that the issue will proceed to third reading or be referred to the planning and zoning committee for further consideration.