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Council member Russell Gilbert
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City Councilwoman Carol Berz

The Chattanooga City Council will hold a public hearing Tuesday on proposed rule changes for operating short-term vacation rentals.

The public hearing will be after the council's 6 p.m. voting session.

The council postponed a Sept. 13 vote, with members saying some residents have voiced frustrations over new legislation that would use a certification process for approving the use of residential property for short-stay room rentals. Now, anyone wanting to use their home as a short-term vacation rental must have the property designated as R3 or R4 zoned, which also allow apartments and offices.

In a recent meeting, Chattanooga-Hamilton County Regional Planning Agency Executive Director John Bridger discussed the new procedures with the council. The rules aim to address the realities of a growing "digital economy" driven by internet-based vacation rental booking sites such as Airbnb, he said.

"We don't want to zone folks out," Bridger said. "We want to create a way to have a review that we can be sure they're meeting basic safety, they're paying taxes and there's a way for the neighborhoods to kind of express whether they want that use in the community or not."

Councilman Chip Henderson asked his colleagues to embrace "forward thinking" in light of the city's growing tourist economy, reminding them Tennessee legislators may consider a statewide solution.

"If we just limit short-term vacation rentals to the rezoning, I think the state will certainly take a look at that and say it's onerous, too burdensome and too many are going to be rejected," Henderson said.

Another consequence of rezoning is that once a property is rezoned, it remains with its new designation going forward, he said. Certification is not a permanent condition imposed on the residential property once it transfers to a new owner.

Councilwoman Carol Berz said she didn't like the idea of one-size-fits-all regulations that "all of a sudden are opening this door" for vacation rentals.

"People that are mostly downtown were fine with it as long as there were certain criteria we met," Berz said. "People further out, not so much. It's a different kind of lifestyle."

THE NEW RULES

The proposed certification process embraces the issue from the perspective of controlling nuisances and ensuring safety instead of taking "a heavy-handed regulatory approach," Bridger said.

Certification requires a $125 application fee, a business license, a working fire alarm and adequate parking space. Regulations call for sprinklers in cases where a home has more than 12 occupants or four or more stories.

The rules also limit the number of rentable bedrooms depending on zoning of the property. R1 or R2 properties — designations generally assigned to single-family residences or duplexes, respectively — may have five bedrooms; R3 or R4 properties may have nine bedrooms.

Maximum bedroom occupancy is two people per bedroom measuring up to 140 square feet. If a bedroom is larger, the maximum number of occupants is derived by dividing the square footage by 70. Rooms may be rented on a daily or weekly basis, but no rental period may exceed 30 days.

From a procedural point of view, the certification process has similarities to rezoning, Bridger said.

Once an application is received for a property, the planning agency will be sent notice to adjacent property owners within 300 feet. If no one voices opposition within 30 days, the certification process continues. If the application encounters opposition, the matter goes to the City Council for a public hearing and vote.

The certification process should allow for different neighborhood sensitivities, Bridger said.

Current operators of short-term vacation rentals will have six months to comply with the new rules if the council adopts them.

"People are already doing it illegally," Councilman Russell Gilbert said. "What we are doing is legalizing people who are already doing the right thing."

City Attorney Wade Hinton said the city will adopt a web-based tool that will compare properties advertised on Airbnb and 30 similar sites to the vacation rental registry. Codes enforcement will cite unregistered properties for violations.

Registered properties cited for state or city code violations twice in a 12-month period may lose their certification.

COMMUNITY FEEDBACK

Cynthia Stanley-Cash and Jane Purdue, who serve as leaders with neighborhood associations in East Brainerd and Bal Harbor, respectively, are concerned about rules enforcement, privacy, neighborhood safety and plunging property values. Both, along with other association members, attended the last public hearing on Aug. 30.

"We still have lots of unanswered questions," Stanley-Cash said Friday, asking about serving alcohol at rental units.

The matter ought to come up on a ballot instead of a council vote, she said.

"We have fought to keep our zoning respected," Stanley-Cash said.

Councilman Ken Smith said he hoped the new hearing would focus more on the details of the proposed ordinance. The last hearing seemed to be more about offering testimonials for or against short-term vacation rentals than the legislation itself, he said.

Sally Morrow, a member of Chattanooga's rental host community, on Friday voiced enthusiasm for the new hearing. She spoke at the last hearing and plans to attend the new one.

"This is the best way to mitigate fears," she said, expressing gratitude for the chance for citizens to address each other for the common good.

Morrow said she favors the new rules over the current rezoning process, which she said quickly creates dissatisfaction within a community.

Contact staff writer Paul Leach at 423-757-6481 or pleach@timesfreepress.com. Follow him on Twitter @pleach_tfp.

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