Short Term Rentals (Airbnb) have been a great topic of discussion all around the nation.
Cities by cities, counties by counties have been implementing ordinances to decrease the impact of STRs.
Nashville, TN has been one of the leading cities introducing strict rules around STRs and below you will find
key points of the bill and a timeline leading to adoption of the current bill BL2019-1633.
Key take-aways from the newly passed BL2019-1633:
· All RM zoned properties are good to operate until Jan 1, 2022. You can obtain new permits, transfer permits, etc.
· The original start date of October 31, 2019 no longer exists
· You no longer have to file an intent to lease with Metro by Jan 1, 2020
· You no longer have to obtain a building permit by July 2020
· You no longer have to worry about the “death penalty”
Timeline of events:
Filing of BL2019-1633
On May 20th Council Member Burkley Allen filed BL2019-1633 just hours before the filing deadline and with no public vetting or input. In the original version of the Bill, she eliminated all new RM permits effective October 31st, 2019. The original version had no provision for transfers and included a “death penalty” after 3 substantiated complaints that was not aligned with current rules. This filing came as a shock to all of us in the industry and caused a mild panic. Immediately, a core group of attorneys, owners, builders, developers, appraisers and Realtors formed to analyze the proposed legislation and to give the greater real estate industry a central place to game plan and influence potential outcomes. This group is comprised of the best and brightest in their respective fields.
Engaging STR Community & Allen
Over the next few weeks this group had been engaging with local industry associations, including but not limited to GNR, WCAR, HBAMT, NASTRA, AI. Using feedback from these conversations the team of STR advocates held meetings with Burkley Allen on May 24th, June 4th, and June 17th to properly address versions of the bill.
Intro. of Substitute Bill
On June 27th, with just over 250 members of the community present, a two hour public forum was held with Councilwoman Allen Burkley (link below). It was during this period that Council Member Allen introduced a substitute Bill that among other things included a deferred start date and gave all existing RM NOO STR permit holders the right to transfer permits in perpetuity
Adoption of Substitute Bill
On July 2nd at Nashville Metro Council meeting more than 50 individuals from all walks of life spoke passionately against the Bill. It was during this Council meeting that Council Member Allen’s substitute Bill was adopted with a majority of members supporting. Immediately following the substitute Bill vote, the Council voted to defer the vote on the newly substituted Bill. Start watching the recording at 1:01:23 (link below)
Amending Substitute Bill
On July 16th the Metro Council met again, this time with a large group of yellow shirts in the gallery emblazoned with “Property Rights” on the front. Efforts to delay the vote were again successful as you can see starting at 1:45:08 (link below).
Substitute Bill Amended
August 6th Metro Council meeting was a highly entertaining meeting full of amazing Council Member debate, indecision, anger, confusion and subterfuge. When the dust settled, the substitute Bill was amended to limit the number of transfers to 2, but left the rest of the Bill intact. This was better than we hoped for and, more importantly, we finally saw all of the cards on the table. Of course, the yellow shirts were there watching too. Watch starting at 6:01:59 (link below).
Preparation for a final meeting
With the clarity of the now substituted and amended Bill, the group met and spoke nearly constantly between August 7th and the August 20th Council meeting. Five potential outcomes were identified: 3 outcomes that were good, 1 mediocre and only 1 that was bad (reducing Council Member Allen’s Bill as substituted and amended to 1 or 0 transfer). As predicted, there were several amendments filed for consideration last, as well as, 2 substitute Bills, one of which turned out to be a very welcome surprise. The surprising substitute Bill came from the original authors of BL2017-608 Henderson, Hagar and Johnson. In their substitute bill, they wiped away all of the filing requirements and milestone hurdles of Council Member Allen’s original Bill. Delayed start date of the substitute bill was to take place on Jan 2022. As anticipated, their substitute included no new permits or transfers in RM zoning past the effective date. This was another potential outcome that was better than 1 of the 3 previously identified positive outcomes prior to the release of late filed amendments (a copy was received on Monday August 19th at 11:17am).
Adoption of New Substitute Bill
During the August 20th Council meeting, the body skipped consideration of the amendments and began deliberation on the Henderson/Hagar/Johnson substitute Bill first. This came as a surprise, but we were all very interested to see if Council would proceed to passing this new substitute Bill. The substitute Bill sponsors laid out their typical points and were bolstered by unwitting accomplice Council Member Sledge. With only one Council Member standing up in opposition, they moved to take the vote and the new substitute Bill passed 25 to 5 with 2 abstentions and 7 not voting. Start watching at 1:59:53 (link below).