Chattanooga City Council members believe state legislators will make the final call on short-term rental rules when they reconvene for the 110th General Assembly in a few weeks.

"The bottom line is the whole issue may be moot because the Tennessee Legislature could be poised — because of litigation in Nashville and Memphis — to say [local government has] no say-so in it," Councilwoman Carol Berz said in a recent candidate forum.

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Carol Berz
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Ken Smith
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Chip Henderson
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Jerry Mitchell

Councilman Ken Smith also said he fully expected state lawmakers to step in, likening the situation to when the General Assembly passed legislation concerning Uber and other ride-sharing programs.

Last fall, the council grappled for months on how to regulate the growing number of short-stay room rentals across the city, made easier by popular internet booking sites like Airbnb.

People packed the council's public hearings on proposed short-term rental rules. Those against short-stay rentals said they worried about safety and quality of life, while rental operators — many of whom admitted they were operating outside the law — cited their right to make extra money. All asserted their property rights.

The council ultimately voted 6-2 against using a certification process to replace zoning rules that require vacation rental properties to be designated as R3 or R4 zones. Property zoned R3 or R4 could potentially allow for offices or apartments. The proposed short-stay certifications were non-transferable and only applied to the business operator at a specific piece of property.

In October, a judge ruled Nashville's short-term rental regulations were unconstitutional because they were too vague. That same month, Memphis passed a short-term rental ordinance which tourism and hospitality officials have criticized for being too light on safety regulations.

Berz and Smith, who represent Brainerd and Hixson, respectively, said single-family residence neighborhoods in their districts were not in favor of allowing short-stay operators in their communities.

However, they both said they did not view the solution as being one size fits all.

"There are areas of our city that would definitely — and do, today — welcome it," Smith said. "These businesses are in operation already. They're all over our city. In many districts, many people don't even know about it."

Councilman Jerry Mitchell, whose district includes the North Shore, said canvassing revealed support and opposition divided along urban and suburban lines.

In September, Sen. Bo Watson, R-Hixson, served on a committee specially created to study short-term stay rentals, after the General Assembly failed to pass regulations in March.

The committee conducted a hearing involving Chattanooga City Councilman Chip Henderson, a pair of Airbnb hosts, and representatives from the Tennessee Hospitality and Tourism Association, the Tennessee Municipal League and free market advocacy group Beacon Center.

Senate Commerce Committee Chairman Jack Johnson, R-Franklin, said the special committee made no decisions at the hearing.

At the time, Watson said the hearing was just a fact-finding conversation. Neither he or Johnson confirmed whether the committee would make recommendations to the new assembly.

On Monday, Watson said his colleagues feel "philosophically conflicted" about getting involved with local land use issues, but he expects legislation probably will be introduced to continue the conversation at the state level.

However, the General Assembly may feel the need to get involved if local regulations "shut off the whole enterprise of allowing short-term rentals to exist in some kind of capacity," Watson said.

Henderson warned fellow council members of a possible statewide solution last fall. He and Mitchell cast the two votes to stop the council from squashing the short-term rental certification proposal.

"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, citing the need for "forward thinking."

If the state does not take action, the council's vote only kills the matter locally for six months — meaning it could come back to the council as soon as late April.

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