Short-term rental bill targeting Nashville dead for the year

The Tennessean

A controversial state proposal led by Republicans to block Nashville from putting in place stronger restrictions on short-term rentals died in the Tennessee Senate on Tuesday, but it came with warnings that possible state intervention isn't over.

Lacking support in committee, Sen. John Stevens, R-Huntingdon, the Senate sponsor, put the beaks for the year on legislation backed by Airbnb, HomeAway and other online hospitality companies to prohibit Nashville from issuing any kind of ban on short-term renting.

The bill — spearheaded by a home-sharing industry that has ramped up its lobbying presence in Tennessee and Metro — was drafted to stop an ordinance proposed in Nashville's Metro Council that would phase out from residential neighborhoods short-term rental properties that are not occupied by their owners.

With the session nearing its end, the Tennessee House of Representatives voted 53-35 on Monday night to approve the House version of the so-called Short-Term Rental Unit Act, sponsored by Rep. Cameron Sexton, R-Crossville, following a contentious 90-minute debate. Angering Nashville Democrats, the bill was amended in the House to apply to only Nashville after the legislation had previously focused on the entire state and later the state's four largest cities.

But in the upper chamber, Stevens said the Nashville-focused proposal lacked support. In the Senate's Finance, Ways and Means Committee, Stevens chose to delay the bill until 2018, ending the legislature's effort to intervene in Nashville's efforts to regulate short-term rentals for this year.

"Unfortunately, I do not see the will of this body to move forward on this," said Stevens, who has argued any type of ban would simply lead to a short-term rental black market.

"The bill was always about Nashville," he later said, warning: "I think the General Assembly at least gave some indication that any overreaching by the Metro Council could result in repercussions next year if it steps over the boundary that the state's unwilling to go beyond."

The Metro Council is set to vote on a three-year phase out of non-owner-occupied short-term rental properties in residential neighborhoods on Tuesday. The bill seeks to stop issuing new Metro permits for this type of short-term renting and phase out existing permits through the summer of 2020.

Councilman Larry Hagar, lead sponsor of the Metro bill, said he wants to iron out some amendments with his ordinance but intends to move forward with a council vote next week. He said he's willing to work with Airbnb to find a consensus but said the company hasn't agreed to with him.

"I'm still waiting on the Airbnb people to come to the table and talk to me, which they haven't done yet," Hagar said. "As far as the situation at the legislature, I talked to several of them up there. When you start targeting certain cities, then it becomes constitutionally suspect because you don't technically have a rational basis (for a bill)."

The short-term rental fight has shown that Nashville, a quickly-growing tourist destination, has become a key market for Airbnb, which allows travelers to go online to rent homes for trips. Critics have alleged that non-owner-occupied short-term rentals have turned residential neighborhoods into mini-hotels, helped escalate soaring housing prices, and uprooted families from their communities.

In a statement on the delay of the state legislation, Airbnb spokesman Benjamin Breit said the company is "focused on supporting our host communities here in Nashville and throughout the state as they advocate for the right to responsibly share their homes."

The proposed prohibition on any kind of short-term renting ban in Nashville came as other municipalities, including Brentwood, already have bans on the practice in residential-zoned districts.

Sen. Steven Dickerson, R-Nashville, who made the motion to delay the bill until 2018, said he received hundreds of emails and phone calls about the legislation. He said he appreciated Stevens' decision to "let this germinate for a while." He also advised the Metro Council and others "to really strive for an even-handed, subtle and deft approach to regulation."

He said state preemption remains a possibility on short-term rentals next year.

"I would just caution all local authorities that they need to be very even-handed in their regulation of this very important subject matter," Dickerson said.

Sen. Ferrell Haile, R-Gallatin, whose district includes both Davidson and Sumner counties, said the issue of short-term renting has been a "taxing" one for him. He urged the council to think of the ramifications before they act. He called it "problematic" if Metro were to suddenly not allow short-term rentals that were previously acceptable.

"At the same token, I think they realize some problems that they have created. And they need to deal with that," Haile said. "And I encourage the cities to get on board to figure this out. This bill has not gone way. It's gone to 2018."

In the House, Rep. Tim Wirgau, R-Buchanan, a rural lawmaker, sponsored the amendment that narrowed the bill to Nashville, and said Monday he didn’t want to “ruin an industry” that contributes some $66 million to state revenue, according to his figures.

He said he amended the bill to only focus on Nashville because the other three big cities in Tennesssee — Knoxville, Memphis and Chattanooga — are “doing it right.”

Members of Nashville's legislative House delegation blasted the amended bill, saying short-term rentals often draw complaints from permanent residents who share tales of booze-fueled late-night parties that affect quality of life and property values in areas around the properties.

“This is not a property rights issue, this is a quality of life issue,” said Rep. John Ray Clemmons, D-Nashville, who spoke against the bill at length on Monday.
Nashville's Democratic delegation all voted against the legislation except for Rep. Jason Powell, D-Nashville, who did not vote on the bill. He told The Tennessean that he has a couple of properties operating as short-term rentals and wanted to avoid any conflict.

House Speaker Beth Harwell voted against the legislation as well along with all three of Williamson County's Republican representatives: Glen Casada, Charles Sargent and Sam Whitson.

Defenders of the legislation and issue say property owners should be able to do what they want with their properties, and that the Metro Council has given incentives to large hotels and motels to build and develop property elsewhere in Nashville.

The bill has been one of the most heavily lobbied bills of the session. Several lobbyists hired by Airbnb, the principal company and driver of the lobby effort, were called out from the House floor on Monday, who were sitting in the gallery.

Reach Jake Lowary at 931-237-1583 or follow him on Twitter @JakeLowary. Reach Joey Garrison at 615-259-8236 and on Twitter @joeygarrison.