COVINGTON, Ky. — The City of Covington will soon begin processing applications for new short-term rental licenses. The city adopted amended regulations which will preserve the charm or historic neighborhoods but allow property owners to make money. 

After months of research, debate, public input and a pair of public hearings, the regulations were approved June 28, 2023 during a special Covington Board of Commissioners meeting. The measure passed 4-1, only Commissioner Nolan Nicaise, voted “no.”

The new regulations, Chapter 127 states:

• Requires a license for every unit before that unit can be advertised or rented.
• Requires licenses to be renewed annually.
• Limits the number of units to two per structure.
• Separates short-term rentals into host-occupied and non-host-occupied units.
• Caps the number of non-host-occupied licenses at 150 for the entire city with specific caps in historic districts.
• Does not cap the number of host-occupied licenses either citywide or in specific historic districts.
• Limits the number of non-host-occupied licenses that a person can obtain to four.
• Sets penalties for operating without a license, including a one-year ban on applying for a license and increased application fees.
• Requires out-of-town operators to employ a local agent to increase responsiveness to concerns.
• Sets a “three-strike rule” for code violations. 
• Creates a Rental License Appeal Board to hear appeals of violations and denial of licenses.

Covington will now begin amending its Neighborhood Development Code through zoning. Short-term rentals will be changed from “conditional use” to “limited use,” which, according to the city, will streamline getting a license. This process is expected to take months because it will require the approval of the Kenton County Planning Commission. The City will continue to process applications with the requirement a conditional use permit be secured through the City’s Economic Development Department, via zoning application.

Applicants will first need to apply for a business license and a rental license. All applications will be processed on a first-come, first-served basis, but there are a few exceptions.

• There were 43 property owners who received licenses before the moratorium. They may continue to operate, but they will eventually need to renew their licenses.
• Applicants who started the process and received a rental license before June 22, 2023 need to reapply within 30 days to keep their “place in line.”

“We urge applicants to be patient,” Covington Neighborhood Services Director Brandon Holmes said. “We intend to process the applications as fast as the law and resources allow, but this isn’t an overnight process.”

 Covington is the latest city to take on short-term rentals. Lexington-Fayette Urban Council will put new regulations on its July agenda.

Louisville has regulated short-term rentals since 2015. Other cities around the state have added regulations over the last few years.