Nashville Introduces Further Ban on Non-Owner Occupied Short Term Rentals

Bill Proposes to Eliminate New RM-Zoned Non-Owner Occupied Permits

In addition to the proposed 600% increase of the permit fees, bill BL2019-1633 was recently introduced in Nashville. While intended to be a "clean up" bill for Davidson County to align to the state bill that passed last year, it includes an elimination of RM zoning (multi-family) from the zones that allow for non-owner occupied permits. In short, the bill aims to ban non-owner occupied STRPs in RM zones. Existing permit holders would be grandfathered under state law.

Here is a link to the bill introduced and sponsored by Burkley Allen »

As we have shared in the past, the city has been clear that BL2017-608 was a "starter" bill and we have known their intent to ban more zones, RM specifically. In fact, Councilman Brett Withers explicitly stated this back in January, 2o18. (View the video of his statement here») However, while this was somewhat expected, the timing and means (slipping the ban in as part of a cleanup bill) come as a surprise. 

Below is a timeline of the bill's progression:

  • Introduction for consideration (first reading) - Scheduled for May 21
    Updated 5/22: Passed first reading.
  • If approved, it will be deferred to planning commission (first public hearing) - Date unknown
    UPDATED 5/22: Passed first hearing on 5/21. Scheduled to be heard by Planning Commission on July 2, 2019.
  • UPDATED 6/20: Scheduled to be heard by Planning Commission on June 27, 2019 and by Metro Council on July 2, 2019.
  • UPDATED 6/27: Passed Planning Commission on June 27, 2019 and will go back to Metro Council for a public hearing and vote on July 2, 2019.
  • UPDATED 8/7: Amended bill passed at second reading on August 6th. There will still be a third reading on August 20th. As it is a zoning bill, amendments can technically be made until and on third reading, therefore this is not the final decision/vote. Third reading is scheduled for August 20, 2019.
  • UPDATED 8/20: Bill BL2019-1633 (the RM bill) has passed on third reading at Metro Council. Prior to passage, an amendment sponsored by Council Members Henderson, Hagar, and Johnson was adopted. Read more here »
  • IMPORTANT NOTE: If planning approves it, pending ordinance will kick in. This means no new NOO permits in RM zones will be issued after that time.
  • If Planning Commission approves the bill, it will go back to council for final vote.
  • Metro Council would have another public hearing and vote.
  • If they vote against, the bill dies.
  • If they vote for, there will be another, final vote on the bill.

UPDATED JUNE 26TH:

This Thursday, the bill (BL2019-1633) to remove RM zoning (residential multi-family) from the zones eligible to receive a non-owner occupied STR permit will be heard on second reading at the Planning Commission.

Tennessee state law would protect current permit owners by grandfathering their permit. However, as with all short term rental permits, the permit would expire and lose grandfather status should the property ever transfer ownership (this includes selling the LLC if the property is in an LLC).

Despite the bill's new effective date of May, 2020, our legal counsel believes that this bill would be legally subject to the pending ordinance doctrine which allows the government to deny an application for any property use when there is pending legislation. In past instances, the Codes Department has acted on this and denied STR permits on the basis of pending ordinance doctrine. For example, when the original ban bill (BL2017-608) was pending, the department did not issue new permits in accordance to the pending bill for nearly a year before the bill was voted into law.

The Codes Department has posted on their website that they will issue permits until the effective date. However, we have received reports from members who have visited Codes and received mixed information. Some are being told they will continue to issue non-owner occupied permits in RM zones until the effective date, while others are being told they will not if this bill passes Planning Commission on Thursday.

Unfortunately, we are aware of prior instances where owners were told they could receive a permit in advance only to be denied at application time. In fact, earlier this year there was a re-interpretation of amendment 9 in the current bill (-608) and the department not only stopped issuing future STR owner-occupied permits to owners of HPR homes that did not own both homes on the lot but they also revoked nearly 150 permits that had already been issued, saying they said were "issued in error."

Based on this information, we do not have the confidence to say definitively whether or not permits will continue to be issued until the effective date of the bill.

We encourage STR supporters to make their voice heard:

  • Email Burkley Allen asking her to reconsider this bill or at the very least ask to defer it to allow ample time to understand the impact and find a resolution. (burkley.allen@nashville.gov)

  • Email the Planning Commission and ask them to vote NO on BL2019-1633. (Planning.Commissioners@nashville.gov)

  • Show up for the Planning Commission meeting which is a public hearing on Thursday, June 27 at 4:00pm. The meeting will be held at the Howard Office Building (Sonny West Conference Center), 700 Second Avenue South, Nashville, TN 37210


You can track the bill here »

We will continue to update this page as we know more.


 

Join NASTRA to stay updated and help support the STRP community

 

Donate to help us continue the fight for fair short-term rental laws

All donations are tax-deductible.

 
Alece Ronzino