Short-Term Rental Ordinance Approved by Knoxville Council

KNOXVILLE, TN – The controversial short-term rental business will come under city oversight when an ordinance becomes effective Jan. 2. The Knoxville City Council approved the controversial short-term rental governing ordinance Tuesday after a yearlong debate of a wide spectrum of possibilities. Previously there was no regulation of the growing industry commonly known as an AirBnB.

“The baseline was that all are illegal right now,” said Jesse Fox Mayshark, spokesman for Knoxville Mayor Madeline Rogero. City ordinance currently does not allow rentals of less than 30 days unless it is a hotel or bed and breakfast. And the latter is extremely restrictive. At this point, if someone complained about a short-term rental (STR), the code inspector would have to write the owner up for operating an illegal motel. “And there are hundreds operating in the city,” Mayshark said.

The new ordinance only allows STRs in owner-occupied residences. Individuals who currently rent non-owner occupied homes have 30 days beginning Jan. 2 to apply for a permit to use the residence for one year. That would give them one year to honor any contracts that they might have and to decide what to do with the property.

The discussion about what to do began nearly a year ago. Many wanted to allow the STRs to continue operating as they had been. Other’s wanted them banned from operating anywhere in the city under any circumstances. Rogero spent much of the last year negotiating with the various factions ensuring Tuesday’s vote.

The vote was 6-2. Vice Mayor Duane Grieve, who wanted to ban all STRs, and Councilman Nick Della Volpe opposed. Councilman George Wallace was not present. The ordinance specifically addresses short-term rentals (STRs) in owner-occupied homes in residential areas and any nonresidential districts so as the renter is properly permitted.

“I think there are a lot of people, who may not love every little bit of it which is hard to do with any law, will like the predictability it provides because people now know what they can do legally. That’s been clarified,” Mayshark said after the vote.

Ten neighborhood groups, particularly groups from North and West Knoxville, have lobbied against the proposed ordinance for months.

Knoxville is the last major city to pass a STR ordinance. Rogero had pushed for the ordinance before the Tennessee General Assembly begins in January. Municipalities believe that they should have control of STR regulation, but the General Assembly has attempted to gain control of the regulation.