Republican senators revive effort to overturn strict Airbnb rules in Nashville

Tennessee Republican senators have revived legislation that would overturn prohibitions that local municipalities have over short-term rentals, a move that would nullify new rules passed in Nashville and existing laws in more than two dozen cities.

The effort, backed by the online-based hospitality company Airbnb, was reignited Thursday in an amendment proposed by Sen. John Stevens, R-Huntingdon, to a bill called the "Short Term Rental Unit Act."

The industry-supported bill advanced in the House last year but stalled in the Senate.

The new amendment would preempt local cities and counties from instituting any type of ban over short-term rentals, overturning an ordinance approved by the Nashville city council in January that would phase out short-term rental properties that aren't occupied by their owners from residential neighborhoods.

“As a state, we must find the right balance between reasonable local regulation and constitutionally protected private property rights,” Stevens said in a statement.

Calling the measure "compromise legislation," Stevens argued proposal "empowers local governments" to create short-term rules related to location, density, quality of life issues, enforcement and health and safety. He said the only limit placed on municipalities would be outright banning any property for use as a rental.

By applying statewide, the latest proposal would be significantly broader than the version advanced in the House last year. That measure only singled out Nashville.

Short-term renting has become a popular alternative for lodging, particularly in places such as Nashville. But the increase in short-term rentals has led to controversy. 

Twenty-seven cities in Tennessee have rules that don't allow non-owner-occupied short-term rentals in residential areas, including Knoxville, Brentwood, Germantown and Smyrna. Officials say they are just following zoning laws that restrict businesses in residential areas.

Some cities have gone further by outlawing all short-term rentals, including owner-occupied types. This includes Davidson County's five satellite cities, Belle Meade, Berry Hill, Forest Hills, Goodlettsville and Oak Hill.

State Sen. Jack Johnson, R-Franklin, told reporters the bill would come before the Senate Commerce and Labor Committee, which he chairs, on Tuesday. Johnson's district includes Brentwood, which would be affected by the amendment.

"This is a carryover conversation from last year relative to short-term rentals, and again a conversation about should we have a statewide policy relative to regulation and utilization of short-term rentals," Johnson said.

He said the committee will be distributing the amendment to mayors and cities across the state.

Nashville Mayor Megan Barry, who signed Nashville's phase-out bill into law last month, did not take a position Thursday on the state preemption legislation.

Barry spokesman Sean Braisted in a written statement said as the legislative session continues, the administration will "identify and monitor any legislation that could positively or negatively impact Nashville" and raise concerns or suggestions with lawmakers.

Knoxville’s City Council approved rules late last year that restrict non-owner-occupied rentals in residential neighborhoods. The controversial decision found middle ground between those who wanted short-term rentals and those who did not, said Jesse Mayshark, a spokesman for Mayor Madeline Rogero. 

“We think this is an issue that is best decided at the local level because there are a lot of interests involved,” Mayshark said.

Inspired primarily by the controversy over short-term rentals in Nashville, the original measure — sponsored by Stevens and Rep. Cameron Sexton, R-Crossvillle — was drafted last year in consultation with Airbnb, HomeAway and other companies that allow property owners to rent out houses online. 

It stalled in the Senate, where Nashville-area Republican Sens. Steve Dickerson and Ferrell Haile helped stop its momentum. But both senators warned Nashville's council that the bill was still alive and could be revived if it passed strict regulations. 

Short-term rental critics have complained that the rise of short-term rentals in Nashville has upended neighborhoods and turned party houses into commercial hotels. Music City is by the far the largest market in Tennessee for short-term rentals rented through Airbnb, HomeAway or VRBO.

After a contentious yearlong debate in Nashville over how to regulate the practice, Nashville's Metro Council voted 25-5 in January to phase out short-term rentals that aren't occupied by their owners from residential-zoned neighborhoods.

The city's ordinance applies primarily to traditional single-family homes and duplexes. The rollback on permits for this type of short-term renting is set to occur over the next three years and be completed by June 28, 2020. 

Johnson said the amendment would preempt cities from banning short-term rentals, but would allow for extensive regulations in terms of limiting how many can be in an area, how close they can be to one another and enforcing penalties such issues as noise violations.

"But that's a very intricate conversation relative to how those types of properties should be regulated," he said. 

Johnson noted that a separate ordinance recently considered by Nashville's council — one that would tighten restrictions over short-term renting, but not institute any level of ban — would be allowed under the amendment.

Johnson was referring to a proposal that Airbnb and council sponsors called a "compromise" measure that would have restricted the number of non-owner-occupied short-term rentals allowed in suburban neighborhoods and created a new clustering provision by limiting the number that could operate in close proximity.

The Nashville ordinance more friendly to short-term rentals was indefinitely deferred by lead sponsor, At-large Councilman Jim Shulman, after the phase-out ordinance passed.

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