Joey Garrison

USA Today Network - Tennessee

A pivotal vote on the future of short-term renting in Nashville is set for Tuesday when the Metro Council will consider phasing out from residential neighborhoods short-term rental homes that are not occupied by their owners.

It comes after the Metro Planning Commission voted 8-0 late Thursday to recommend approval of council legislation that would halt issuing new permits for non-owner-occupied short-term rentals in residential areas.

Current permit-holders could renew their permits, which are good for one year, until June 28, 2019, meaning permits would be phased out completely by the summer of 2020.

The fiercely debated measure, which has been fought by Airbnb, HomeAway, VRBO and other companies that enable travelers to rent homes online, takes aim at the practice of investors maintaining residential homes where they don't live for the sole purpose of profiting from renting to guests. Neighborhood activists have complained the practice turns homes into party hotels while displacing longtime residents in already-gentrifying neighborhoods.

"We've allowed the non-owner-occupieds to go into residential neighborhoods," said Councilman Larry Hagar, lead sponsor of the proposal. "That's where the problems started to occur."

Investor-owned short-term renting could continue in commercial areas and at multi-family condos or apartment complexes under the legislation. The bill would not affect short-term rental homes that are occupied by the owner.

Airbnb, short-rental hosts fighting 'impulse ban'

A public hearing at the council will proceed the vote, and a lengthy debate and large contingents from both sides are expected. Some are bracing for one of the longest public comment periods before the council in years.

In recent months, Airbnb has increased its lobbying presence at city hall and the Tennessee state legislature to fight a short-term rental phase out. Pending state legislation backed by Republican lawmakers, Rep. Cameron Sexton, R-Crossvillle, and Sen. John Stevens, R-Huntingdon, seeks to block efforts to ban or temporarily halt any type of short-term renting.

At the Metro level, the industry is pushing an amendment to the bill that would take out the phase-out but keep in place regulations and increase permit fees. But the planning commission did not recommend the amendment during its final vote.

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"When local governments and STRP communities partner in pursuit of fair home sharing rules, everybody wins," Laura Spanjian, public policy director for Airbnb, of Houston, said in a statement ahead of Tuesday's vote. "In contrast, impulse bans and moratoriums are unenforceable and simply don't work. We urge the Metro Council to scrap this bad bill and instead pursue fair rules that protect both private property rights and neighborhood quality of life."

The Nashville Area Short-Term Rental Association also blasted the proposal, saying Metro would be shirking a moral obligation and that short-term rental hosts had expected Metro to continue issuing permits.

"This means that hardworking Nashville taxpayers will be left to suffer the financial repercussions that come with this pending loss, devastating those who count on STRPs to make ends meet," the statement reads. "While true that permits only lasted for one year, we never anticipated, nor were we told that the city of Nashville wouldn’t live up to its moral obligation to her citizens by pulling the rug out from under us in less than five years.

"If the Metro Council adopts the ban and phase-out as (this legislation) indeed does, then that’s just bad faith."

Supporters say proposal is to protect neighborhoods

Planning commissioners, including Councilwoman Burkley Allen, the council's representative on the commission, said the issue presented a dilemma but they ultimately sided with neighborhoods.

"I believe that there are a lot of good hosts and there are a lot of people who have made substantive investments in this," Allen said. "I hope we can do this process in a way that doesn't ruin anybody's life. That is certainly not our goal. But we also began this process with the goal of protecting the neighbors."

During the public hearing before the planning commission's vote, supporters of short-term renting and opponents squared off for nearly three hours as part of a marathon meeting that lasted more than eight hours.

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The Nashville Neighborhood Alliance has led the resistance to non-owner-occupied short-term rental homes. On Sunday, the organization Nashville Organized for Action or Change, known as NOAH, pledged its support for the phase-out bill.

Omid Yamini of East Nashville called short-term rentals "un-monitored self-service mini-hotels in residential neighborhoods that are disruptive to our neighborhoods.

"Stand with the residents and stand with the people that live in all those other houses that have no idea that this is really what's going on," he said.

Short-term rental hosts call for better enforcement over phase-out

Hagar said there's a big difference between renters living in a neighborhood long term and renters just passing by for the weekend. He said residents don't know who is living next door when a home is occupied by renters there for short stays.

"We don't know what their background is. We don't know what their criminal record is," he said. "But at long-term rentals, most of us do if we're responsible landlords."

But Megan McCrea of the Nashville Area Short-term Rental Association, who rents out a duplex in East Nashville, said she visits her property multiple times a week, knows the neighbors and hasn't had problems at her property.

McCrea called for better enforcement of existing regulations instead of a halt. She pointed to statistics showing that short-term rentals represent a small share of Metro's overall codes complaints. She also said short-term rentals represent just 0.6 percent of all homes in Nashville, a figure she says undercuts claims of displacement.

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"We know there are those who are operating without permits. Even if that number were double, it's 1.2 percent," McCrea said. "I would hardly call that mass displacement."

Metro has issued 3,641 permits for short-term rental properties since the creation of a permit system in 2014. As of January, around two out of every three short-term rental properties were not occupied by the owner.

The council earlier this year voted to re-write regulations over short-term rental properties after a judge raised issues with language in the city's ordinance, but the new bill did not change the city's policy concerning non-owner-occupied short-term renting.

Reach Joey Garrison 615-259-8236 and on Twitter @joeygarrison.