Short Term Rentals - Why I Am Trying To Improve Regulations And Protect Neighborhoods

What are short-term rentals, anyway? It is an alternate lodging option other than hotel and motel rooms where people can book rooms using online booking tools such as Airbnb, HomeAway, VRBO etc.

Why is it so controversial and complicated? Prior to 2015, there was no law to regulate short-term rentals in Nashville. I attended several meetings about proposed short-term rental regulations in 2014 and shared my concerns on enforcement with the bill’s sponsor CM Burkley Allen. Over a yearlong community engagement, the first short-term rental ordinance, BL2014-951, was passed by a previous Council in February 2015 with good intentions.

However, almost from day one, Metro had no way to fully enforce the regulations that were approved in 2015, and a huge STR industry exploded in Nashville, causing some residential neighborhoods to be overrun with tourists and party houses. That was the unforeseen and unintended consequence.

To address unintended consequences, several ordinances have been approved since 2015. One of the latest bills was BL2017-608. I co-sponsored this bill in order to ensure preservation of the neighborhood while bringing back the original intent of short-term rentals as a home-sharing business model.

BL2017-608 created two types of short-term rental permits; one is Owner-Occupied and the other is Non-Owner Occupied. An owner-occupied permit can be obtained in any zoning district as an accessory use to residential uses, while a non-owner occupied permit is considered as a commercial use and allowed only in certain zoning district with conditions. You can read more about my reasons for supporting and sponsoring this bill in my January 5, 2018 newsletter, https://content.govdelivery.com/accounts/TNNASH/bulletins/1d0cba8.

Unfortunately, we are still facing another unintended consequence. Under the BL2017-608, non-owner-occupied permits are allowed in RM zoning - Residential Multifamily, that includes apartments, condominiums and townhouses. Over the years there have been problems, and complaints have been lodged.  Many of these condos are owned by long-term residents who are now finding an STR on the other side of a common wall being occupied by different transients several times a week.  The added noise, overflow parking and not knowing who is occupying a nearby unit are not what the condo owner bought into.  In addition, some long-time apartment dwellers are finding their leases not being renewed in order for the owner of the apartments to transform the building into STRs.

Substitute BL2019-1633 currently under consideration

To solve problems in RM zoning, BL2019-1633 was introduced with good intentions. It would have prohibited issuing new permits in RM zoning while aligning the language in Metro’s regulations with the language in the Short-Term Rental Unit Act of Tennessee. Not only would this have protected long-term residents, but would have also provided additional housing options for the many new residents moving to Nashville.

However, this abrupt change in STR permits in RM zoning created great concerns from developers, investors and realtors who are in the process of acquiring properties for short-term rental purposes. Based on the feedback, the sponsor of the bill made several concessions, and on July 2 introduced  a Substitute Bill BL2019-1633.

This substitute bill added the following:

Section 3 of the substitute bill specifies special conditions as to how and until when non-owner occupied STR permits in RM zoning can be obtained. It extended the date the permit can be obtained to January 1, 2022. The original bill would have prohibited issuing non-owner occupied STR permits in RM zoning on October 1, 2019.

Section 14 of the substitute bill allows the right to transfer an STR permit only in RM zoning if conditions in section 3 are met.

Section 15 of the substitute bill specifies no permit shall be issued if an STR permit in RM zoning has been revoked.

Concerns with Substitute BL2019-1633

I believe any regulation change will have to be fair and reasonable. In that sense, stopping the issuance of STR permits in RM zoning after October 1, 2019 will create great harm to those who are currently in the process of obtaining a building permit, or going through a zone change. Although I am not promoting non-owner occupied STRs in RM zoning, it will not be fair to abruptly interrupt their plan and cause harm in the middle of their project.

My biggest concern is section 14 providing transfer rights. STR permits are meant to be a one-year renewal permit issued to the property owner, not to the property itself. By allowing transfer rights to RM zoning, the permit is now tied to a specific property, not to the property owner. I can see unintended consequences by allowing permit transfers only in RM zoning. How can we be sure someone won’t challenge Metro to allow the transfer rights for non-owner occupied STR permits in R and RS residential zoning? If that happens, all our past efforts to protect residential zoning from commercial activities will go out of the window.

My proposed changes to Substitute BL2019-1633

I am sponsoring two other substitute bills to BL2019-1633 that will be introduced at the next Council meeting on August 20th.

The first of my substitutes is to bring back the BL2019-1633 to its original intent to eliminate non-owner occupied STRs from RM zoning, but with a reasonable timeline. It will bring the current language in Metro’s STR regulations into compliance with the State’s Short Term Rental Unit Act, as well as adding a provision for current STR permit holders of Horizontal Property Regime (HPR) property, more commonly called duplexes, to continue their permit in order to prevent further lawsuits.

The second of my substitutes is simply bringing the current language in Metro’s STR regulations into compliance with the State’s Short Term Rental Unit Act, as well as adding the provision for current STR permit holders with HPR property to continue their permit. It will not affect the multi-family building owner’s ability to apply for and receive non-owner occupied STR permits.  Nothing major will change under this second substitute.

Experience and Knowledge with STRs

STR issues and regulations are complex. I don’t know how Council will vote on CM Allen’s Substitute Bill BL2019-1633 (as amended), or one of my substitute bills. It may be necessary, in order for us to get it right, for the next Council to take up this issue and take the time to meet with all stakeholders to come up with the best possible solution for everyone. 

Under the strict guidelines of the State bill, the Short Term Rental Unit Act, I believe there are ways we can better enforce our regulations.  Lack of staffing and resources in the Codes Department has hampered that effort.  However, I am committed to continuing to find ways to allow short-term rentals to operate in our city without disrupting the lives of our residents. 

I can only continue my efforts with your support and your vote for me for District 23 Metro Council.  Early voting for the runoff election begins on August 23 and runs through September 7.  Runoff Election Day is September 12.

 

Mina For Council, https://www.minaforcouncil.com

 

 

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