Bill would limit local jurisdiction of Airbnb-type rentals

Friday, February 10, 2017, Vol. 41, No. 6
By Sam Stockard

Legislation filed Thursday would stop bans on short-term rentals and vacation homes while setting up basic guidelines for local governments and a state tax-collection system.

Supporters said they have been talking with Memphis and Nashville officials in advance, but it is unclear how the legislation might affect those cities.

A Memphis ordinance requires short-term rental companies or individual hosts to pay a 3.5 percent rental fee tax and a $2 fee per room per night to Memphis. The city requires short-term guests to follow existing laws for noise, trash and parking.

But while Memphis has fewer than 500 listings for short-term rentals, Nashville has more than 3,270.

Netting about $3.6 million a year in hotel-motel taxes from the businesses, Nashville requires hosts to pay $2.50 per night plus 6 percent daily per stay. But the city has run into difficulty enforcing regulations dealing with weeds, trash, noise and abandoned vehicles at short-term rentals and is putting a new software program to work to bring the businesses under control, according to reports.

Sponsored by state Sen. John Stevens, R-Huntingdon, and Rep. Cameron Sexton, R-Crossville, the bill is designed to protect the rights of property owners while giving cities and counties options to set rules dealing with public health and safety.

Short-term rentals brought in $75 million for Tennesseans in 2016, according to Airbnb, and research done by another company, HomeAway, found the business created $500 million in economic activity in Nashville alone.

Stevens calls the measure a “sensible” measure to allow visitors to continue using short-term rental for business trips and vacations, which he says is important for his rural district in West Tennessee, which doesn’t have many large hotels.

“It also protects the thousands of Tennesseans who are operating short-term rental properties as a means of earning extra income while ensuring that cities are able to collect hotel-motel taxes on STRP room nights,” Stevens says.

Sexton points out Tennesseans have been using home vacation rentals for decades.

“One only has to look as far as Fairfield Glade in my district to see that visitors to our state are using STRPs as an affordable alternative to hotels,” he says.

The bill would stop local governments such as the city of Brentwood from banning short-term rentals but would let them set rules to safeguard neighborhoods. Operators would have to obtain a permit if the local government requires one and follow noise, traffic, parking, solid waste and pollution ordinances.

“The fairest thing to do is set a statewide standard, create a basis for everything, so if you’re operating one, there’s a basis for everyone no matter where you are and then you give locals some ability to do a little bit more through ordinances or regulations,” Sexton says.

Companies such as HomeAway, VBRO and Airbnb would be allowed to collect taxes, based on the hotel taxes for each jurisdiction, and send them to the Tennessee Department of Revenue for owners and hosts.

The legislation doesn’t specify the number of guests who would be allowed to stay at a home for short-term rental. One of the biggest complaints about these types of businesses is that people have events such a wedding parties erupt into wild affairs.

One Nashville resident, Sue Tieck, says she wants short-term rental properties with two to three units to be limited to be removed from residential areas because they’re commercial businesses, more or less “miniature hotels” with no oversight.

“A lot of the behaviors we’re seeing in these STRs are things that if they had done in a hotel environment, it would have gotten them arrested and thrown out,” Tieck says.

People who complain about incidents at these businesses are usually stonewalled by property owners, some of whom live out of state, she says. These types of situations create a “hostile environment for everyone,” she notes.

Supporters such as Jamie Hollin, who represents the Nashville Area Short-Term Rental Association, says whether something happens in a commercial or residential district, it’s probably been going on for decades.

“Home sharing is part of the future,” Hollin says. “You’re either going to embrace it, regulate it and enforce it, or it’s gonna happen anyway.”

Sam Stockard is a Nashville-based reporter covering the Legislature for the Memphis Daily News. He can be reached at