State intervention on short-term rentals now proposed for just 4 largest cities
As Nashville moves closer toward a possible phase out of non-owner-occupied short-term rental homes from residential neighborhoods, a Republican state senator is now pursuing legislation to prohibit the state’s four largest cities — and only them — from enacting such bans.
State Sen. John Stevens, R-Huntingdon, is the lead sponsor of legislation backed by Airbnb and other online hospitality companies that would block all Tennessee cities from banning any type of short-term renting. But he said he plans to rewrite the original bill to single out just Nashville, Memphis, Knoxville and Chattanooga.
He's drafted an amendment, supported by Airbnb, that would place a two-year moratorium on any prohibitions or limits to short-term rentals in the state's four most populous cities — either bans on owner-occupied or non-owner-occupied short-term rentals — unless the local law existed before April 1.
Stevens announced his move less than a day after Nashville's Metro Council — which is aware of potential state intervention — on Tuesday delayed voting on their phase-out proposal until May 16, when the ongoing state legislative session is expected to have already ended. The local ordinance would halt issuing new non-owner-occupied permits in Nashville's residential neighborhoods and phase out existing non-owner-occupied permits over three years.
“The big four, in particular, are taking action that would impact, in my opinion, the delicate balance we’re trying to reach on this issue between local control, state control and property rights,” Stevens said. "It's a really delicate issue that I believe deserves some state action."
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As originally written, the bill struggled to advance in the legislature, in part because it would have affected existing short-term restrictions in cities across Tennessee such as Hendersonville and Brentwood. The latter, a Republican stronghold, bans all short-term renting. Rules — including bans — in suburban and rural communities would be protected under a bill that singles out just Tennessee's largest cities.
The proposed moratorium also would not apply to Nashville's satellite cities, which include Goodlettsville, Berry Hill and the affluent communities of Belle Meade, Forest Hills and Oak Hill.
The bill is vague on which new regulations could be enacted. The legislation says it would not prohibit local governing bodies from enacting short-term regulations "if they do not prohibit, limit or effectively prohibit" short-term renting.
The bill, sponsored by Rep. Cameron Sexton, R- Crossville in the House, is set to go before the Senate Finance, Ways, and Means Committee on Monday.
In addition to Nashville, Memphis has short-term rental rules set to go in effect this summer. Knoxville is considering new regulations proposed by Mayor Madeline Rogero that wouldn't allow short-term rentals that are not occupied by the owner to operate in residential neighborhoods.
Predictably, Stevens' proposal was met with criticism by those looking to regulate short-term renting.
"Airbnb is trying to circumvent 80 years of state law for their own financial benefit," said John Summers, a former Nashville councilman and a member of the Nashville Neighborhood Alliance, which is fighting non-owner-occupied short-term rentals in Nashville's residential neighborhoods. "This is a company that has a history of not complying with local zoning, not complying with tax requirements, and when they don't get their way they will go to states and try to preempt."
Jesse Mayshark, director of communications for Rogero, called the amendment "a direct assault on local zoning authority, which is a fundamental function of local government."
"We have spent months in Knoxville listening to public input on short-term rentals and studying the experiences of cities around the country," he said. "We have drafted a local ordinance that will make short-term rentals legal in all areas of the city while protecting the quality of life in our neighborhoods and our local housing supply. Airbnb just this week reached an agreement with their home city of San Francisco that respects that city's laws and regulations. We hope our legislators will show Tennessee cities the same respect and allow our City Council members to weigh this complex issue."
Nashville has struggled to enforce regulations Metro passed in 2014 that required short-term rental hosts to apply for permits, pay taxes and limit guests, among other restrictions.
In a statement on the new amendment, Airbnb spokesman Ben Breit said the company has and will continue to "work hard to be a good partner with Nashville." He said Airbnb wants to provide "long-term tools and solutions" to help Nashville craft and good policy, including robust enforcement mechanisms.
"Our host community supports taking bans off the table, instead favoring collaboration with cities towards a practical, enforceable regulatory regime for STRPs," Airbnb spokesman Ben Breit said by email. "Bans are unrealistic solutions, both here in Tennessee and throughout the country."
Stevens said his hope with his bill is to “tap the brakes” and figure out a common solution statewide that could be adapted over time. He likened the rise of short-term renting, prompted by new technology, to challenges posed to the music industry in the late 1990s by the likes of Napster.
“Philosophically, I feel that a ban will not be effective, where you're just creating a black market," he said. "This (short-term renting) is so popular that bans aren't going to work. People are going to do it anyway.
"Why don't you just bring it out to the open, regulate it, and let the mark flourish?"
Tyler Whetstone contributed to this report.
Reach Joey Garrison at 615-259-8236 and on Twitter @joeygarrison.