Nashville Proposes 600% Increase to STRP Permit Fees
In a bill introduced by Metro Council (BL2019-1627), the city seeks to increase annual permit fees for new and existing owners from $50 to $313 annually. This is a 600% fee increase. (Read the full bill here »)
We strongly encourage you to share your thoughts regarding the bill with city council. You can use the following link to locate contact information for your district’s council member as well as at-large members. (Enter your address in the space provided to determine your district if you are unsure.)
Be sure to reference the bill number in the subject of your email (BL2019-1627).
Things you should know and ask your city council member about regarding this bill:
This is a 600% increase to existing owners. Perhaps consider a more moderate percentage instead of such an aggressive increase.
With over 5,000 properties already permitted, the expected funds for the new increase equate to $1,280,000 annually. This far exceeds the cost to hire 2 codes personnel.
By raising fees for permitted hosts only, you will penalize those that are operating legally and perhaps drive more owners “underground.” Consider raising fines for violators to use for enforcement instead. The state only limits the fine to $50 per day without due process. If the city were to consider due process, penalty fines could be increased and money could be leveraged to further enforce the illegals. Even with just the $50/day fine, if enforcement could happen and fines could be levied, these funds would far outweigh any added fees for permits.
Legal STR owners already add a significant economic value to the city and are putting funds back into the community. We pay business taxes, hotel and motel taxes, sales and use tax, etc. Yet, unlike the hotels, STRs haven’t received grants or tax breaks from the city. A 600% increase in permit fees in conjunction with these other taxes could cause many owners to not be able to continue to rent their homes as a STR.
Perhaps the Council can at last consider entering into a voluntary tax collection agreement with Airbnb, just as Knoxville, Memphis, and Chattanooga have done. This will ensure that Airbnb is collecting and remitting the Hotel Occupancy Tax from every listing on their platform, including the unlawful, unpermitted ones. This would generate significant additional funds for enforcement and further help weed out the bad actors.
The Short Term Rental Unit Act passed by the state of TN last year explicitly states that permit holders should be grandfathered under the laws that existed at the time the original permit was issued. The city of Nashville has already found itself in several lawsuits and was held in contempt of court for disregarding state law. Is there a reason the city continues to ignore the state law that was meant to protect property owners and lawful short-term rental owners?
Updated 5/23: Bill BL2019-1627 passed on first reading on 5/21. Scheduled to be heard by Budget and Finance Committee on June 4, 2019.
Updated 6/5: Bill BL2019-1627 passed on second reading on 6/4.
UPDATED 6/20: 600% fee increase goes into effect on July 1, 2019. All new permits and renewals will be $313 annually.
The city has also just proposed a bill that would ban new non-owner occupied permits in RM zones. Read our latest update for all the details »