This story was updated June 27 at 7 p.m. with edits and again at 11:35 p.m. with more information.
UPDATE: Chattanooga will have a new special district for short-term home rentals in place on Oct. 1.
The district overlays the city core and more, running from Lookout Valley in the west to Missionary Ridge in the east. It includes a large portion of the North Shore, but cuts out Glenwood in East Chattanooga and pockets including land opposite Moccasin Bend in the west.
The council has struggled for almost a year with how to regulate the residence-based lodging economy, which has grown by leaps and bounds through the use of internet-based booking sites such as Airbnb.
Tuesday night, the council voted 7-1 to enact the proposed district plan, championed by Councilman Chip Henderson. Councilwoman Demetrus Coonrod cast the only "no" vote and Council Chairman Jerry Mitchell was absent.
"This has been a long process this council has been involved in," Henderson said. "I appreciate the input from the community and from the council."
The council batted away two amendments supported by various members of the public. Henderson urged his colleagues to avoid weighing the legislation down with so many amendments it would ultimately undo it.
"It may not be a great piece of legislation, but it's a good piece of legislation," Henderson said.
Councilman Darrin Ledford made a motion to include lots measuring 10 acres or more as part of the district, even if they weren't inside the district boundaries. Ledford represents District 4, which he has said, as a whole, is not in favor of short-term rental operations.
"It would seem that proximity was a big concern for most people, and I think that this 10 acres not only addresses the challenge or concern, it totally eliminates it," Ledford said.
The council voted 5-3 against the amendment, with Coonrod and Council Vice Chairman Ken Smith supporting it.
In a reversal of her request to remove Glenwood from the district in May, Coonrod asked the council to put the neighborhood back in the short-term rental district. The council voted 5-3 against the motion to amend, with Smith and Ledford supporting.
A number of Glenwood residents claimed opposition to the neighborhood's inclusion was driven by two people, and not the community as a whole.
"It has been a very hard decision with the short-term rental issue," Coonrod said during a midday discussion with her colleagues.
The council delayed a planned vote on June 13 after private school officials asked for buffers to be placed between short-term rental properties and educational facilities. No council member put forth an amendment in support of that request.
The new rules do away with long-standing regulations requiring short-term vacation properties to be zoned R-3 or R-4, which also allows office and apartment uses.
Inside the district, property owners will need to purchase short-term vacation rental permits. Owners who do not live on such properties are subject to city council approval if neighbors voice opposition, forcing a public hearing. Owner-occupied permit seekers do not have this hurdle.
ORIGINAL STORY: The Chattanooga City Council votes this evening on whether to establish a special district for short-term vacation rental businesses
The body has wrestled with how best to balance the property rights of people who want to operate short-term rentals and residents who don't want them in their neighborhoods. Officials say Chattanooga already has hundreds of short-term rental operations who are not in compliance with zoning requirements. The proposed special district would replace zoning procedures with a simpler permit process.
The proposed district encompasses much of the city's core, the North Shore and Lookout Valley. It excludes Glenwood in the east and pockets opposite Moccasin Bend and along East Brow Road in the west.
The council has grappled for about a year with regulating the growing residence-based lodging economy, boosted through internet-based booking sites such as Airbnb.
Two weeks ago, the council postponed a planned vote after private school officials asked it to consider adding 1,000-ft. buffers around school facilities to protect children from potential sexual predators.
Earlier, Girls Preparatory School Head Autumn Graves likened a buffer with similar set-offs for liquor stores, adult entertainment businesses and hazardous waste storage facilities.
Graves could not provide any data linking short-term vacation rentals to sexual predators when prompted by Henderson.
Last week, the Chattanooga- Hamilton County Regional Planning Agency held a forum and the council was briefed on sex offender registration and tracking policies by the Tennessee Department of Correction and the Hamilton County Sheriff's Office.
"I feel like it's important that we be educated, that we make legislation based on facts and not necessarily on fear or guesswork," Councilman Chip Henderson, the legislation's sponsor, said when he introduced law enforcement officers during a council planning session.
Elizabeth Gentzler, manager of the state probation and parole unit for sex offenders, explained the state has restrictions in place for convicted sex offenders.
"If they come into this state for vacation, whether they're on probation or not, if they don't register, it's a Class E felony," Gentzler said. That registration is done at the local sheriff's office.
Generally, sex offenders may not linger within 1,000 feet of the property line of public, private or parochial schools, child care facilities, public parks, playgrounds and recreational sites where children are present, according to state rules.
Airbnb described its stance on host and guest safety standards to the Times Free Press in an email.
"We use sophisticated technologies and behavioral analysis techniques to help prevent bad actors from utilizing the platform in the first place," Ben Breit of Airbnb's public affairs division wrote. "For United States residents, we also run host and guest information through several public databases to check if there are matches with certain felony convictions, sex offender registrations, and significant misdemeanors."
The special-district plan, whether or not it includes buffer zones for schools, represents a sea change for Chattanooga's short-term vacation rental regulations.
It proposes to do away with long-standing rules that require short-term vacation properties to be zoned R-3 or R-4, which also allows office and apartment uses.
Inside the district, property owners will simply purchase a short-term vacation permit. Short-stay operators who live on the properties will need a $75 permit and a business license. Off-site owners will pay $125 and their neighbors will receive notice and have a chance to oppose the permit.
Once the law goes into effect, no new short-term vacation rentals will be allowed outside the district.
Henderson has suggested allowing more time for people outside the district boundary to make their zoning requests.
The district idea "gives us pause," Airbnb Midwest Policy Director Laura Spanjian said in a recent letter to the council that supported making the regulations citywide.
"We are concerned it would be difficult to implement, and could prevent Chattanooga from realizing one of the largest benefits of home sharing: the distribution of tourism dollars throughout all of Chattanooga's neighborhoods," Spanjian said.
Last fall, the council abruptly trashed a proposed citywide short-term vacation rental permit program in a 6-2 vote following two months of debate and a number of public hearings. Henderson and Councilman Jerry Mitchell, now council chairman, cast the no votes.
Vocal opponents, primarily from North Brainerd and Bal Harbor, have claimed short-term vacation rentals are "mini-hotels" that disrupt neighborhoods and could expose them to strangers with criminal intentions.
Olivia Karavatakis, a Highland Park Airbnb host, has argued internet booking sites are better for vetting guests for safety.
"I don't want just any Joe Blow coming and staying with me if I don't feel comfortable that they're not being forthcoming with information," she said.
East Chattanooga Councilwoman Demetrus Coonrod, who held a community meeting with Henderson to address concerns over proposed short-term vacation rental rules last month, has urged residents to come to the council's meeting.
"I want people to start feeling a part of conversations and solutions," Coonrod said in an email.
Contact staff writer Paul Leach at 423-757-6481 or pleach@times freepress.com. Follow him on Twitter @pleach_tfp.