Megan Boehnke

Knoxville News Sentinel

City of Knoxville to hold meeting Tuesday at 5:30 p.m. to get public feedback on possible Airbnb ordinance.

City of Nashville is struggling to enforce its 18-month-old Airbnb regulations.

Knoxville city officials uncertain how enforcement would happen.

Owners who lease their homes on Airbnb and other short-term rental services may soon have to pay $150 per year for a city permit, collect sales and occupancy taxes from guests and face restrictions in residential zones.

Knoxville city staff hope to have an ordinance soon that would regulate the rapidly growing industry of short-term rental properties. In the last year, 8,000 guests have stayed in short-term rental properties in Knoxville, up threefold from the year before, according to estimates by city officials.

The city will hold a public meeting Tuesday at 5:30 p.m. at Central United Methodist Church, at 201 3rd Ave., to gather feedback on suggested regulations.

“We don’t have an ordinance written up; this is just our first cut at how to resolve these issues,” said Bill Lyons, Knoxville’s chief policy officer and deputy to Mayor Madeline Rogero. “This is our starting point based on what we found from other cities.”

City staff have been looking at existing ordinances in other places including Nashville, Asheville, N.C., and Boulder, Colo. The goal, Lyons said, is to protect residential neighborhoods and the existing long-term rental market while still allowing homeowners to be entrepreneurial with their property.

Among the suggestions is to require every short-term rental property – there are about 200 in Knoxville now – to register with the city. Though the city has pinpointed $150 as a ”reasonable” fee to cover administrative expenses, the exact cost is still negotiable, Lyons said. The city also would require a business license, which costs a one-time fee of $15.

The main goal of permits is to track the properties, and enforce other codes like restricting rentals to 5,000 square feet, limiting occupants to 12 guests and requiring working smoke alarms.

It would also allow the city to track who is collecting and paying sales and occupancy taxes. The owners would be responsible for collecting the taxes, though services like Airbnb offer that service. The city has not calculated how much revenue it might see from those taxes, Lyons said.

The city is also considering limiting short-term rentals in residential zones to only those that are homeowner-occupied, a suggestion that could see some pushback from residents who own multiple properties. This wouldn’t apply to other zoning areas like the downtown design overlay district, the form-based codes along Cumberland Avenue and the South Waterfront, or future mixed-use zones, which the Metropolitan Planning Commission is currently developing.

“Basically the idea is that the owner would live there and say the owner is going to be gone for the summer or gone over the weekend,” Lyons said. “That’s an entire model some people use. I’m sure we’re going to have discussion on that point, but this is something to be done in the house you own and not by getting a number (of rental) houses.”

This restriction would both protect the long-term rental market and other residents who live in the neighborhood, he said. So far, the city has only received eight complaints about short-term rental properties, and most of them were either noise complaints or parking issues, Lyons said.

“We don’t want to get to a situation where over a weekend there’s a normal house that a family of four might be in, where now you have four people camped in every room with 10 or 12 cars (out front),” Lyons said.

The city is also still exploring how it will enforce any new rules. It would be cost-prohibitive to devote staff to monitoring online rental sites, but the city is exploring technology options, city officials said.

In Nashville, the city is currently grappling with how to enforce its 18-month-old Airbnb regulations, which include limiting how many guests can stay in a rental home. Last month, 28 Metro Council members raised frustrations over the struggle to enforce the rules and asked Mayor Megan Barry to consider using police to do so. Police, meanwhile, have opposed that idea, The Tennessean reported late last month.

Knoxville staff have stressed that enforcement would be key to ensuring any ordinance is effective, but exactly how to do that is still unclear.

In the meantime, city staff are waiting to see the feedback they receive at Tuesday’s meeting. If all goes well, Lyons said they hope to hold a workshop for Knoxville City Council members in the coming weeks. If not, staff will rethink its proposals and hold more meetings. Any ordinance would have to be approved by both the Metropolitan Planning Commission and Knoxville City Council.