Cleveland STR licensing (Ordinance 561-2026): rules, limits, and when they start

Cleveland City Council has passed Ordinance 561-2026, creating a city licensing framework for short-term rentals (STRs) in residential neighborhoods—along with limits and enforcement tools aimed at reducing parking, noise, density, and other day-to-day disruption neighbors have complained about.

City records show two different “start” dates to know about. Cleveland’s Legistar page lists an effective date of July 1, 2026, but the ordinance text says the new STR chapter sections take effect 90 days after passage—so the STR chapter’s practical start date is August 30, 2026 (90 days after the June 1, 2026 passage/adoption date).

What Cleveland passed in Ordinance 561-2026

Ordinance 561-2026 enacts a new STR chapter in Cleveland’s Codified Ordinances (Sections 686B.01 through 686B.11, 686B.99 and 686B.991) and amends the city’s transient occupancy tax provisions to clarify STR lodging treatment. The stated intent is to set licensing procedures and health/safety standards while limiting adverse impacts on residential neighborhoods.

What counts as a “short-term rental” under the ordinance

For the STR licensing chapter, a short-term rental is the temporary rental for compensation of a dwelling unit where accommodation to any transient guest is for not more than 30 consecutive days.

If a dwelling unit is rented for more than 30 consecutive days, it is not a short-term rental under this chapter and instead requires a certificate of rental registration under Chapter 365.

License requirement: what hosts/operators must do

Under the new chapter, no owner or operator may 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 ordinance spells out license application requirements, including:

Owner and operator contact information
A local contact designated for immediate concerns and complaints
Dimensioned floor plan showing proposed maximum number of transient guests, number of bedrooms, other living spaces, safety features, and emergency evacuation routes
Parking plan
Liability insurance with limits not less than $500,000 (or proof the owner/operator is named insured under a booking agent’s policy)
Proof of tax payments (including real estate and transient occupancy taxes due as of the application date)
Proof of certificate of occupancy under the city code
If the applicant is a tenant: proof of possession under a valid lease that allows subleasing (and evidence that a lease prohibition on subleasing is grounds for denial)

Key licensing/admin timing and costs:

$150 application fee for the initial licensing year
Licenses are one year long, commencing December 1 and expiring November 30
$150 renewal fee
Renewal applications must be filed no sooner than September 1 and no later than November 1
License info required for the application must be updated within 7 days of changes in status, including contact info

The ordinance also requires the local contact to be available in person or by phone at all times while transient guests are on the premises, and if contacted, to be able to be present within one (1) hour and authorized to make decisions regarding the premises and transient guests.

And for compliance visibility, STR licensees must prominently display the STR license inside the main entrance of the unit.

Neighborhood limits: density cap and overnight occupancy

Density limitation: In any residential district, STRs are limited to at least one or no more than 15% of the total residential units on a block or in a multi-unit building—whichever is greater.

If an owner/operator wants to exceed the cap, they must seek a variance from the Board of Zoning Appeals, which can consider factors including potential disruption to quiet enjoyment, documented complaints, and parking impacts, among other factors.

There is also a limited lodging exception for certain existing operators: a dwelling unit in a residential district that has been in operation as limited lodging under the prior city provision for at least one year prior to the effective date is not subject to the density limitation as long as it remains limited lodging under that prior framework.

Overnight occupancy limit: The maximum number of persons permitted overnight in a short-term rental is two (2) per bedroom, plus two (2) additional persons.

Safety and conduct requirements

The ordinance requires STRs to have, among other things:

Working smoke alarms adjacent to sleeping areas
Carbon monoxide detection devices installed and maintained near the center of the dwelling unit and close to living and sleeping areas
One or more A/B/C classified fire extinguishers located at least in the kitchen and maintained per applicable standards
Rules around excessive or unnecessary noise (prohibited when it violates Cleveland’s codified ordinances)
Proper trash and recycling containers and guest notice about collection days and exterior trash rules

Tax clarification: transient occupancy tax applies to STR lodging transactions

Ordinance 561-2026 amends Cleveland’s transient occupancy tax rules so STR lodging is treated as part of the tax program. The amended tax provisions levy an excise tax of 3% on transactions where lodging by a hotel or short-term rental is, or is to be, furnished to transient guests.

For tax purposes, the STR definition similarly ties to stays that are for not more than 30 consecutive days or for not less than 24 hours—and the ordinance states the tax is collectible at the time lodging is furnished, regardless of when the price is paid.

When the new rules start: July 1 vs. 90 days after passage

Legistar lists an effective date of July 1, 2026. But the ordinance text provides that the enacted STR chapter sections (and related transient occupancy tax changes) shall take effect and be in force 90 days after passage.

Because the ordinance’s passage/adoption date was June 1, 2026, the 90-day trigger points to August 30, 2026 as the date residents and hosts should treat as the start of the STR chapter’s enforceable licensing/limits.

If an STR becomes a nuisance: revocation and penalties

Ordinance 561-2026 gives the Commissioner authority to suspend or revoke a license. The text specifies revocation triggers including:

Three or more nuisance activities (as defined in Section 630.01) occurring on or from the licensed property within a 12-month period, even if the property has not been declared a nuisance under the city code
Any one occurrence at or from the property of certain serious categories, including violations involving disorderly conduct/disorderly activity, certain assault offenses against another person, certain weapons/explosives violations, or an offense of violence as defined in Ohio’s Revised Code

For complaints about activity at a property, the ordinance names multiple city intake routes, including the Division of Assessments and Licenses, the Division of Police, the Department of Building and Housing, the Department of Public Health, and the Division of Fire, depending on the type of incident.

The ordinance also creates both criminal and civil consequences for STR violations. For example:

Operating without a license is a misdemeanor of the first degree, with penalties of up to $1,000 and/or up to 6 months imprisonment (or both)
Cleveland also sets civil penalties for failure to obtain a license, including a $5,000 fine

What to do next

Hosts/operators: plan for compliance starting with the STR chapter’s 90-day take-effect date (including getting the STR license, maintaining insurance with limits of at least $500,000, updating application/contact info promptly, and displaying the license inside the main entrance).
Neighbors/residents: the ordinance is designed around measurable guardrails (density and overnight occupancy limits, noise/safety standards) plus license consequences tied to nuisance activity and serious incidents.
Parents, commuters, and anyone booking a Cleveland stay: if the stay is a “short-term rental” under the ordinance definition, expect the new licensing and occupancy limits to apply once the STR chapter is in force.

Sources

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