Beacon Center litigator Braden Boucek and his clients, Rachel and P.J. Anderson, shared a victory toast of bubbly on Oct. 21 after Judge Kelvin Jones declared Nashville’s short-term rental ordinance unconstitutional. “We are ecstatic about today’s ruling. …it sends a loud and clear message to cities across the state when it comes to restricting homeowners’ rights in the new economy,” Beacon exalted in a statement.
That toast was way premature. Beacon, a Libertarian think-tank, sued Metro on the Andersons' behalf in 2015, challenging the city’s short-term rental property ordinance because it caps the number of permits for non-owner occupied properties at 3 percent of homes in each census tract. By the time the Andersons learned they needed a permit to convert their house into a non-owner-occupied Airbnb, all the permits available in their area were taken.
Beacon’s suit blithely ignored decades of zoning precedent protecting homes in neighborhoods zoned residential from the threat of having commercial enterprises open up next door. Beacon argued that the Andersons (and everybody else in Nashville) should be able to do whatever they jolly well please with their house because they own it.
Judge Jones didn’t buy that argument, ruling that the ordinance’s three-percent cap was a reasonable method to accomplish the legitimate goal of balancing the interests of people who own and operate short-term rentals with those of neighbors “who want to protect the residential character of their neighborhoods.”
However, Jones’ ruling wasn’t favorable to Metro, either. He homed in on one of the thorniest issues presented by investor-owned STRPs where no one actually lives: the fact that most cities, including Nashville, prohibit commercial establishments in residential neighborhoods.
When Councilwoman Burkley Allen researched short-term rentals to draft Metro’s STRP ordinance in 2014, lobbyists for the national short-term rental industry helped her arrive at a quick and easy way to dodge that prohibition: Define the use of short-term rentals for transient stays as “residential.”
This Orwellian definition of unsupervised mini-hotels in residential neighborhoods as “residential use”— belied by the fact that STRPs pay business and hotel taxes and are regulated under the “Business Licenses and Regulations” section of Metro’s general regulations — may be the source of the “vagueness” Judge Jones found troublesome.
Because the only significant difference between investor-owned STRPs and all other commercial lodging businesses in Nashville — other than the absence of a manager or host onsite to monitor guests — is that they can operate in residential neighborhoods.
That’s right. Metro’s ordinance regulates and taxes STRPs as businesses, but claims their use is residential. And the ordinance was written this way for the express purpose of doing an end run around longstanding restrictions on commercial enterprises in residential neighborhoods.
Now that Judge Jones has called Metro on this, Allen is scrambling to save the STRP ordinance while changing it as little as possible. Once again, she has hit on a quick and easy solution: Move short-term rental regulations out of Metro’s business regulations (because that indicates they are businesses) and embed them in the city’s zoning regulations.
Allen’s proposal, co-sponsored by Councilman Bob Mendes, will be presented on first reading Tuesday night. Such a fundamental change to Metro’s residential zoning code should trigger a very loud public conversation about short-term rentals, hosted by Metro Council reps.
Nashville has almost two years of experience with short-term rentals in neighborhoods. In neighborhoods with a high concentration of STRPs, these years have been neither peaceful nor pleasant.
A council initiative to change the city’s residential zoning laws forever to permit STRPs shouldn’t slide stealthily into law, like the first ordinance did, with no real public discussion.
In addition to public hearings at the Planning Commission and the council, the revised STRP ordinance should trigger public meetings in neighborhoods throughout Nashville, especially those now inundated with Airbnbs, about how STRs are affecting the lives of residents of the neighborhoods where they operate.
To date, the conversation has been monopolized by operators who score big profits from STRs, industry lobbyists and Metro’s Convention and Tourism Bureau, which benefits from taxes on STR stays. Voters in every council district should contact their council rep to demand their opportunity to offer public testimony about the impact on their neighborhoods of two years of non-existent Codes enforcement, hundreds of unpermitted properties that are impossible to shut down, loud party houses, streets that are now mini-hotel districts, a reduced supply of homes for sale or rent in desirable areas, deflated property values for homes and condos right next to STRPs, and the security issues inherent when a constant stream of transients check into houses on your street.
These hearings should happen BEFORE Metro Council votes on the revised ordinance — and before the consulting firm Mayor Megan Barry has hired to hand out a few Band-Aids to the neighbors and neighborhoods plagued by problem Airbnbs delivers its report.
