Tennessee lawmakers send short-term rental bill to governor

The guest bedroom has been prepared for the next Airbnb guest Thursday, May 25, 2017, at Olivia Karavatakis' Highland Park home in Chattanooga.
The guest bedroom has been prepared for the next Airbnb guest Thursday, May 25, 2017, at Olivia Karavatakis' Highland Park home in Chattanooga.

NASHVILLE - Tennessee lawmakers on Tuesday gave final approval to a controversial measure limiting cities' ability to ban short-term house rentals.

The final legislation was the product of a conference committee that ironed out differences between House and Senate approaches to the volatile issue.

Senators approved the conference committee report on an 18-14 vote. The House OK'd it earlier Tuesday on a 67-23 vote.

It now goes to Gov. Bill Haslam, whose office says he will allow the bill to become law. It was heavily lobbied for several years by Airbnb, Homeaway and other online companies. Lined up against them were cities and hotels.

Sen. Bo Watson, R-Hixson, had previously forced changes to the Senate bill, including one that eliminated a vested property right for owners of property that originally would have allowed owners to sell homes to other people or companies who could keep operating the homes for short-term rental.

The bill maintains that prohibition. But it now includes a "grandfather" provision affecting towns and cities where there are no regulations at all. It says when a municipality does enact rules, owners of short-term rental property, including those who don't actually live in the homes, can continue to rent if they can provide documentation of having paid at least six months of sales taxes on rentals during a 12-month period prior to enactment of rules.

Chattanooga is among the cities that have already placed restrictions, but Kerry Hayes, deputy chief of staff to Mayor Andy Berke, said in an email that "while the General Assembly's recent legislation on this topic raises more questions than it answers, we believe that it leaves intact the core of our [Short Term Vacation Rental] ordinance, which we will continue to enforce."

He said "Chattanooga takes pride in being one of the most forward-thinking cities in Tennessee, and in that spirit of creative, proactive problem-solving, the city council established its own local regulations around short term vacation rentals" last year.

Rep. Patsy Hazlewood, R-Signal Mountain, has been monitoring the legislation closely.

"As far as I am currently aware, Signal Mountain doesn't have any ordinances at this point. So the only thing [the bill] would do it would be an opportunity for 'grandfathering' if [a homeowner] can prove they've paid sales tax."

But she noted Watson's provision prevents that ability to rent from being transferred to a new owner. The new owner would have to get a license or permit to operate, she noted.

Nashville and Knoxville have had troubled dealings with non-owner-occupied short-term rentals, and homeowners in particular have been up in arms. Nashville officials and homeowners have complained about hordes of bachelor and bachelorette parties accompanied by noisy, drunken and sometimes-lewd bacchanals erupting in otherwise quiet residential neighborhoods.

As they struggle to adjourn their annual session this week, possibly on Wednesday or Thursday, Tennessee lawmakers kicked into high gear on a number of contentious issues. In other legislative action Tuesday:

» The Senate and House Tuesday evening approved seven of Gov. Bill Haslam's proposed appointments to the University of Tennessee's new board of trustees.

Among the seven confirmed by the House and Senate is Chattanoogan Kim H. White, president and CEO of River City Co., a nonprofit organization that promotes downtown development.

Earlier this month, the governor saw four of his original 10 nominees to the newly fashioned UT system board shunned by fellow Republicans in the Senate. A fifth withdrew his nomination, leaving White and four other nominated trustees still in play. On Tuesday, Haslam added two additional appointments.

All seven were confirmed by the House and Senate, leaving the 11-member board with seven appointed trustees along with the state agriculture commissioner, who is a voting member.

» A bill banning most underage marriages in Tennessee except for 17-year-olds with approval of parents or guardians is back in gear, first clearing the House.

Senators passed the bill, backing away from their version, which would have allowed 16-year-olds as well to marry. But a new Senate provision kicks the measure back to the House for final approval.

The House acted on a bill sponsored by Rep. Mike Carter, R-Ooltewah. The original bill, which first sought to ban all marriages under 18, was sponsored by Rep. Darren Jernigan, D-Nashville.

In brief floor remarks, Carter, an attorney, credited Jernigan for bringing the original legislation, saying he was "primarily responsible for the passage of this bill."

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.

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