Summary of Short Term Rental Laws

new short term rental laws2019 was the busiest on record in Middle Tennessee for the creation and passage of short term rental laws in Nashville.

The Nashville Metro Council led that push with 7 Bills introduced, 4 of which are still pending and will be voted on in 2020. The city of Franklin, with a push from their Downtown Neighborhood Association, also updated their zoning code. As more and more municipalities begin to update their zoning code, it’s important to stay connected with industry leaders who closely follow these changes.

Newly Passed Short Term Rental Laws in Nashville

Earlier this year, the previous Council tackled BL2019-1633, the so-called “RM Ban Bill”. This was a hotly contested Bill introduced by CM Allen and subsequently amended by CMs Henderson, Hagar and Johnson. It was a piggyback Bill to the original legislation passed 2 years earlier in BL2017-608 that effectively banned non-owner occupied STRs in residential zoning in Nashville.

On October 1st, 2019 the new Metro Council was seated and they immediately made their intention to focus on short term rentals in Nashville clear by filing 2 Bills. This was followed by 2 more Bills at the 4th meeting and a more significant Bill proposed at the 6th meeting on December 17, 2019.

Substitute BL2019-6: If a person is found to be operating a short term rental without a permit, there shall be a minimum of 1 year before you can apply for a new STR permit. If a person is found to be operating a short term rental with an expired permit, there shall be a minimum of 6 months before you can reapply for a STR permit. This is a large departure from the previous law where you had the ability to appeal to the Board of Zoning Appeals and they, at their sole discretion, could penalize you for a much shorter period. Many times owners forget to renew their permits and would appear before the BZA to plead their case. This Bill effectively ends that leniency. So, make sure you renew your STR permit on time and NEVER operate your rental without a permit. For those who do, we have consistently seen 3 year bans. The substitute Bill introduced by CM Henderson passed with 26 votes.

Pending Short Term Rental Laws 2020

BL2019-7: this is a clean up Bill that helps clarify which units in two-family zoning districts (most commonly called HPRs or duplexes) are eligible for STR permits. This typically occurs in R6, R8, R10 and R20 zonings. If two-family dwelling units are owned by different persons, and each unit is the primary residence of the corresponding owner, then each owner may be issued a separate owner-occupied STR permit. No more than 2 permits may be issued per lot for these two-family dwelling units, and only 1 permit may be issued per dwelling unit. If both units are owned by 1 person, you are still allowed to obtain 1 owner-occupied STR permit. There are no non-owner occupied permits available. This Bill was introduced by CM O’Connell and we deem it to be fair based of the reinterpretation of BL2017-608. However, CM O’Connell has deferred it to the March, 2020 meeting. According to CM O’Connell’s own newsletter, “I’ll be deferring my bill allowing owner-occupied STRPs in duplexes for a few months to allow me time to meet with the Coalition for Nashville Neighborhoods and to get an important update on data from Host Compliance from Codes.” What’s troubling is the Coalition for Nashville Neighborhoods is an anti-STR lobbying group. John Summers, who leads the group, is a controversial ex-Council member who still holds influence over certain current members.

BL2019-78: proposes to add a minimum distance requirement for any new non-owner occupied STR permit. This requirement is nearly identical to the same restriction on retailers who sell alcohol and tobacco products. The Bill states, “No new STRP permit shall be issued to an applicant whose location is less than 100 feet from a religious institution, a school or its playground, a park, or a licensed day care center or its playground. The Bill goes on to say that STRs may be exempt from the minimum distances if an owner applies for an exemption and metro Council votes in the affirmative with 21 or more votes (out of a possible 40). This Bill was proposed by CM Sledge who appears to be attempting to make it more difficult to obtain new permits in certain South Gulch developments. The Bill was differed to the February 4, 2020 meeting.

Commentary and opinion: this proposal states that it’s in reaction to the “the negative secondary effect associated with the sale and consumption of beer near churches, schools, daycares, and parks.” However, upon reviewing all of the complaints in Host Compliance, I cannot find a single complaint filed by a church, school, daycare or park. Further, there are no sales of alcohol permitted in short term rentals. Granted, people are free to consume alcohol in STRs, but now the city is attempting to legislate tourist behavior while they visit Nashville. This is a very slippery slope. I would hope that CM Sledge reconsiders this Bill prior to February. If this Bill makes it to the public hearing, I suspect there to be a large opposition present.

BL2019-79: addresses only owner-occupied short term rentals and would require owners to reside onsite at all times the property is being used as an STR. The owner is also not be permitted to be temporarily absent from the dwelling unit for longer than 15 consecutive hours within any 24 hour period while the property is being used as an owner-occupied STR. Additionally, other than for two-family residences under common ownership, owners will not be allowed to advertise the availability of all bedrooms within the property. In other words, owner-occupied rentals can no longer be whole home rentals. This Bill was proposed by CM O’Connell who has long been active in supporting additional STR legislation. The Bill, was also deferred to the March 3, 2020 meeting.

Commentary and opinion: I cannot see any way on God’s green earth to enforce this proposed legislation. It would take hundreds of enforcement officers making visits to all owner-occupied short term rentals every 15 hours to ensure the owner of the property was present. While we understand and support the intent of the Bill (to guarantee owner-occupied STRs are truly owner-occupied), we disagree this the path to successful enforcement. This appears as yet another stab in the dark at ways to regulate short term rentals while ignoring the enforcement proposals real estate professionals collectively made to Council during the BL2019-1633 process earlier this year.

BL2019-111: this Bill affects both owner-occupied and non-owner occupied properties by proposing more than 40 new zoning districts which prohibit all short term rentals. This Bill proposes to take all current zonings (except for R, RS and DTC) and create a new suffix of “NS” which means No Short term rentals. The Bill was proposed by CMs Parker, Toombs and Sledge and was deferred to the February 4, 2020 meeting.

Commentary and opinion: this Bill is scary. If passed as written, this Bill would give CMs a laser scalpel tool to be able to deny the short term rental use from nearly every zoning at their whim. I see this as a major infringement upon property owner rights and a massive departure from the rules as originally written in BL2017-608. The result is likely that no new short term rentals will be built if a parcel requires a rezoning. It will also artificially inflate the value of currently operating STRs in zoning that does not have the new “NS” suffix (Note: this will not affect existing properties or currently operating STRs and Council cannot rezone a property without the owner’s written consent). Additionally, this is the 2nd STR Bill proposed by freshmen CM Parker who is a self-acclaimed Democratic Socialist. Having researched this party and Sean Parker, I find them and him to be quite dangerous to those who believe in our free market economy. Having read the posts on their Facebook page, they and he appear to be a half step short of Communism by openly advocating for a systematic transformation of the economy from capitalism to socialism. I don’t think we want Putin making the rules for the city of Nashville. Giving someone like Mr. Parker a laser scalpel tool will be very dangerous and will likely damage Nashville’s economy. I suspect there will be a sizable opposition group present at the February 4 meeting should this Bill hit the floor as proposed.

How To Get Involved in the STR Legislation Process

It’s crucial that you make your voice heard. All too often the vocal minority is the loudest voice. CMs (Council members) typically cast their votes based on who has their ear.

Email all Metro Council members (using the email address CouncilMembers@nashville.gov). Ask them to vote NO on these bills.

Email, call, and set up meetings with your individual council member. Get personal: share how these bills will impact you and ask them to vote NO.

Unsure of who is your district’s council member: Look up your council member (click on their name for full contact info)

Join NASTRA, the Nashville area short term rental association.

Finally, attend the public hearing. This is crucial. All Bills have a public comment period during the 2nd reading.

Safe Bets on Nashville Short Term Rentals

Nashville short term rentalsThere are several STR developments under construction that will not be subject to many of the newly proposed laws. If you are risk adverse, you may want to consider one of the following:

Lyric at Cleveland Park
Muse Downtown Nashville
The Nations, furnished townhomes
Hendrix Nashville

Grant Hammond

Broker, ABR, SFR ePRO

Call/Text:
(615) 945-7123

Contact Grant Hammond
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