State bill could affect city rules on Airbnb

State bill could affect city rules on Airbnb

February 18th, 2018 by Judy Walton in Local Regional News

Phil Cross stands at the entrance of his home Wednesday, Nov. 29, 2017, in Chattanooga, Tenn. Cross thought it might help pay the electric bill when he decided two years ago to be an Airbnb host, but it has become more of a side business.

Photo by Erin O. Smith

Chattanooga officials and Hamilton County's two state senators are watching a bill in the Tennessee General Assembly that would short-circuit the city's rules regulating short-term rentals such as Airbnb.

The city council adopted rules last June for short-term rentals and is preparing to vote Feb. 27 on a few tweaks to them, including enlarging the districts where homeowners may operate them.

The bill sponsored by Sen. John Stevens, R-Huntingdon, would take away Tennessee cities' authority to ban short-term rentals.

It would affect Chattanooga's rules limiting short-term rentals to certain districts if it passes, said Matt Kiessling, vice president of short-term rental policy for the Travel Technology Association.

Some cities outlaw all short-term rentals, and more than two dozen don't allow non-owner-occupied rentals in residential areas, The Tennessean newspaper reported.

Stevens' bill would allow local governments to regulate location, density, quality-of-life issues, enforcement and health and safety. They also would maintain control over short-term rental permitting, insurance requirements and inspections, according to a statement from the Travel Technology Association.

"As a state, we must find the right balance between reasonable local regulation and constitutionally protected private property rights," Stevens said in that statement.

Kiessling said the bill aims to protect homeowners' right to do what they want with their property, including cash in, and it and similar bills elsewhere are states' reactions to attempted "overreach" by municipalities.

"You're seeing states step in and realize there's a massive tourism opportunity here and a massive economic opportunity for homeowners," he said.

A bill that passed the House last year focused on Nashville, which was debating whether to ban short-term rentals. The Nashville Metro Council in January passed an ordinance disallowing investor-owned short-term rentals in residential areas, The Tennessean reported. The move followed charges that such rentals were despoiling the city's neighborhoods, the paper said. Stevens' latest proposal would apply statewide.

Chattanooga Councilman Chip Henderson, who spearheaded Chattanooga's ordinance to enactment, said he testified last year to the Senate Commerce Committee when the bill was under discussion.

"From what I observed, it looked like they had an ax against Nashville, period," Henderson said.

Sen. Bo Watson, R-Hixson, sits on the commerce committee and said Stevens' bill is up for discussion this week.

"My position is, I don't want to out-and-out ban them, but I don't have a problem with locals putting in particular types of restrictions that are health-related and safety-related," Watson said.

"The concern with banning is they're still going to exist, you just won't know they're there. I think we're better off knowing who's in the business," he said.

Sen. Todd Gardenhire, R-Chattanooga, said he prefers local regulation, as well, but there's a faction that backs state-level control.

"It's going to be a real fight," he said.

Kerry Hayes, deputy chief of staff for Mayor Andy Berke, said via email the administration hopes state lawmakers will leave well enough alone.

"Last year, the City of Chattanooga worked closely with neighborhood leaders and property owners to develop a local ordinance regarding short-term home rentals," Hayes wrote. "The policies that we put into place have been working great for Chattanooga's visitors, residents, and the business community — and should be allowed to continue to do so. We'll be monitoring this bill closely, and we hope that the General Assembly will not act in a way that minimizes the ways that Tennessee's cities can work with our citizens to produce the best local solutions."

Henderson said the upcoming council vote concerns small changes to the ordinance, enlarging a couple of the districts and making it easier to administer.

The district encompasses much of the city's core, the North Shore and Lookout Valley. The initial district lines excluded Glenwood and pockets opposite Moccasin Bend and along East Brow Road.

Henderson said Glenwood in District 9 is going to be brought into the district, as well as some new property along Riverside Drive in District 4.

The council also will tweak a requirement that property owners must have a business license to apply for a short-term rental permit. Henderson said that if the council approves, owners won't have to obtain a business license until they are approved for short-term rentals.

It also will allow an agent, such as Airbnb, to collect and submit sales and hotel-motel taxes on behalf of owners. Rental operators not connected with Airbnb or similar agents still will be responsible for collecting and turning in taxes on their own.

"It's really just to make the application and the business end of it a little easier to navigate or apply for or to administer," he said.

Contact staff writer Judy Walton at jwalton@timesfreepress.com or 423-757-6416.