A Sane Path Forward on Short-Term Rentals


September 19, 2016 2:00PM

Last week, I had the privilege of testifying in a state Senate committee on the status of short-term rental laws in our state. As you may know, Beacon has sued the city of Nashville for its short-term rental ordinance, which prevents our clients from using their home as they see fit.

The legislature is considering whether it should pass statewide legislation to clarify and limit the regulatory authority of cities when it comes to how they treat services like Airbnb and VRBO. Beacon supports efforts to adopt statewide rules on short-term rentals, and here are a few reasons why:

1) To protect constitutional rights

Cities have proven that they can’t adequately balance the property rights of their citizens with the outcry of neighbors. Look no further than the video exchange below for proof that the idea of property rights is a foreign concept for many local elected officials.

Indeed, it’s important that we preserve someone’s quiet enjoyment of their property, but in doing so, we cannot trample on the rights of those who want to occasionally rent their home to guests. Cities like Nashville have adopted arbitrary and unconstitutional caps on the number of people who can participate in the home-sharing economy, far overstepping their bounds to regulate this issue. Statewide legislation can still provide cities with the opportunity to regulate short-term rentals, such as zoning, health, and safety restrictions, but also set a ceiling on those regulations so that the property rights of Tennesseans is preserved.

2) To thwart protectionism

It is abundantly clear that Nashville’s regulatory scheme protects the hotel industry at the expense of regular homeowners. By saying that 97% of homeowners cannot do something, it severely limits competition for hotels. It further grants a monopoly to the lucky 3% who can secure a permit, allowing them to do something at the expense of the other 97%. This is unconstitutional, and the state legislature should step in to create a level playing field where the locals have refused to do so.

3) To erase senseless reactions

Despite existing unconstitutional laws, some Nashville councilmembers want to double down and make it even harder to use services like Airbnb and VRBO. They want to lower the cap on available permits from 3% to 1% and limit the number of unrelated persons who can stay in a short-term rental. Nashville admits that it is already struggling to enforce existing short-term rental laws. What makes city officials think they can enforce these new provisions? Will we require blood samples or check birth certificates at the door to ensure guests are related? Furthermore, these rules do nothing to address the purported problem of short-term rentals: noise, nuisance, trash, etc. Statewide legislation can delegate flexibly to cities to deal with these real concerns, while prohibiting them from enacting senseless, burdensome rules that do nothing to address the problems that have been raised.

4) They have the authority

Finally, because local governments are subdivisions of the state, the General Assembly has every authority to override them in this area. Just as the state preempted local regulations on ridesharing when Nashville passed protectionist, unnecessary, kneejerk rules, it can and should do the same here.